A new report by the Interim Forest Finance Project has called on the international community to inject US$12 billion to stimulate demand for the flagging global REDD+ initiative under the United Nations.
The report, launched by Global Canopy Programme (GCP), the Amazon Environmental Research Institute (IPAM), Fauna & Flora International (FFI) and UNEP Finance Initiative on Friday, calls on governments, donor agencies and financial institutions to significantly increase the finance available to stimulate demand for emission reductions and meet the supply generated by REDD+ projects which are already helping reduce deforestation.
The REDD+ is a mechanism that offers financial incentives to developing countries to reduce carbon emissions through protecting and restoring forests. These activities include conservation initiatives, sustainable forests management and enhancement of forest carbon stocks.
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About 15 to 20 per cent of global carbon emissions are attributed to deforestation and this is rampant in some countries in Southeast Asia, which house some of the world’s largest tropical rainforests.
The funds are necessary to offer incentives and stimulate demand from tropical forest countries and the private sector to take up at least 25 per cent of emissions reductions through REDD+, according to the report.
“Reducing emissions from deforestation and degradation between 2015 and 2020 should be a strategic priority for governments, given that emissions from this sector, according to the recent IPCC report, are the second largest
Nick Oakes, Finance Programme Manager of Global Canopy Programme
The report cites that if no action is taken to stimulate market development between 2015-2020, REDD+ could suffer the same fate as the UN’s Clean Development Mechanism (CDM), where demand for carbon credits have fallen over the years.
The CDM was established as the carbon offsetting mechanism under the Kyoto Protocol, which puts emissions cap to governments and organisations. Through CDM, organisations and private companies can sell or buy carbon credits as a way to meet their emissions targets.
“If demand for REDD+ emission reductions suffers the same fate, the ultimate consequence will be that the climate change mitigation potential of forests will not be harnessed, and forests may not play a permanent, central role within the global effort to address climate change,” the report said.
Nick Oakes, Finance Programme Manager of Global Canopy Programme said in a statement, “Reducing emissions from deforestation and degradation between 2015 and 2020 should be a strategic priority for governments, given that emissions from this sector, according to the recent IPCC report, are the second largest.”
If the REDD+ programme has to significantly contribute in bringing down the annual deforestation levels to 50 per cent by 2020, it would need to produce a demand that would take up as much as 9,900 million tonnes of carbon dioxide (MtCO2) generated from all forests and land-use activities.
At present, the total potential demand for REDD+ emission reductions from 2015 to 2020 stands at only around 253 MtCO2, the report said. This amount is less than 3 per cent of the target, which means tropical forest countries will have to exert great efforts to fulfill the remaining 97 per cent.
As of January 2014, among the few sources of ptential demand for the five-year period are the California Emissions Trading Scheme, FCPF Carbon Fund, BioCarbon Fund, KfW REDD+ Early Movers Programme and from companies looking to voluntarily offset their emissions as part of their sustainability commitments.
Oakes added that there is urgent need to scale up demand for REDD+ emissions reduction before 2020 to plug the gap between supply and demand, but growth is expected to materialise only after the UN convention on climate change signs a deal that will implement a global compliance market. This agreement, if any, could take effect only in the year 2020.
The authors warned that ignoring the present gap will leave little incentive for tropical forest countries to divert resources towards REDD+ in the period before 2020, or for the private sector to invest in REDD+ projects.