Seeing REDD, by Chris Tobias

Could there be a more complicated way to save forests?

Trying to stop the destruction of the world’s remaining forests is a complicated affair. One proposed method to help in the battle is the Clean Development Mechanism (CDM) for developing countries called REDD, or Reducing Emissions from Deforestation and Forest Degradation.

The general idea behind it is to give developing nations an incentive to maintain their forests by assigning them a value and finding alternatives to industries like logging or slash and burn farming.

On the ground, it works like this: a set area of land with tree canopy cover is assigned a value for the ecological service of carbon absorption. Polluting companies can purchase a credit for this value as a means of offsetting their carbon emissions elsewhere in the world. Whoever owns the land benefits from the financial transaction.

According to REDD expert Dr. David Neidel, some 13 million hectares of tropical forests are cleared annually, 50% of which is in the countries of Indonesia and Brazil. Deforestation and degradation is the cause of an estimated 12-20% of the world’s total carbon emissions (varies by the year and how much land area is cleared). Burning just 1 hectare of forest releases hundreds of tonnes of CO2 and damages the soil’s ability to absorb and sequester carbon.

“We’re currently destroying our planet’s main carbon sinks while simultaneously increasing our emissions,” Neidel says. If we are to stop this cycle, Neidal believes that REDD plays a critical role.

REDD is a constructed market that was developed following the Kyoto Protocol. While REDD credits are not currently traded like carbon offsets in regulated markets like the European Union Emissions Trading Scheme, there is some discussion that following Copenhagen climate negotiations this year, there will be inclusion.

This will mean a larger market for the credits. Right now, REDD credits can be traded however in voluntary markets, such as the Chicago Climate Exchange, but at relatively low prices.

Of course the climate negotiations will not be easy, REDD or no REDD. The mechanism is wrought with issues. As an intangible commodity, how can people be certain they’ve bought a real reduction in emissions? How does one know that the reduction credit has not been sold to anyone else, or that the REDD project wasn’t going to go ahead anyway without some form of financial investment? How can “leakage” (e.g. displaced people from one plot of land moving elsewhere to slash and burn a different patch) of emissions be ruled out? Will the forest still be standing in 30 or 50 years time, or will it be destroyed by some natural or man-made phenomenon?

Some aspects of REDD are very clear however. As a mechanism, it needs safeguards to protect against perverse incentives, such as corporations buying up large swathes of land to counteract poor manufacturing practices, but never making changes to how they operate. The focus needs to stay on actually reducing emissions.

REDD also needs to ensure carbon-rich ecosystems such as peat lands are adequately protected, and not degraded in a way that results in the release of their stored carbon dioxide. And of course, it is necessary to ensure the rights of indigenous peoples, and to ensure they benefit from whatever financial incentives are issued. A recent Mother Jones article documented one especially troubling case in Brazil with less than desirable outcomes for native peoples at the hands of a General Motors project.

There are many complex factors on the table that need guidelines, including how REDD projects are designed, the standards by which REDD credits are issued, and how the process is certified by third party auditors.

Because a well designed REDD project takes time and money to plan, execute, and certify, there is a delayed payoff for whoever is investing in it. This is a major barrier to uptake in some instances, and adds to the economic complexity of projects in developing nations.

An unfortunate competitor to REDD projects in nations like Indonesia is palm oil plantations. While entirely destructive and of no ecological benefit, the reality is that for palm oil developments, money often starts rolling in faster (due to proceeds from logging land). Because of the perceived earlier payoff, parties with short term profit goals are encouraged to do the wrong thing regardless of the long term implications.

With this complexity and adversity, some might consider REDD to be an overcomplicated and nonviable option.

Copenhagen and international agreements aside, Dr. Neidel sees major developments in local and regional climate markets as a big influence on development of REDD projects. Also, pending U.S. climate change and energy legislation might be very influential in paving the way for demand for REDD credits in spite of their complexity.

All things considered, Dr. Neidel sees that REDD is “possibly the last option to save large scale tropical forests and all their benefits.” He notes though that “While the focus should be on reducing emissions, the importance of maintaining carbon sinks cannot be ignored.”

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