Climate Change and Forests: Emerging Policy and Market Opportunities

Foreword

Iam delighted and honored to have been invited to write a foreword for this excellent and timely work. It is particularly timely because in December 2007, in a historic decision, the parties to the 1992 UN Framework Convention on Climate Change (UNFCCC), meeting in Bali, Indonesia, decided to include the issue of avoided deforestation—or “reducing emissions from deforestation and forest degradation ” (REDD), as it is known in UNFCCC argot—in the Bali Action Plan. This plan is the so-called road map for negotiations that aim to develop by 2009 a legal instrument to replace the 1997 Kyoto Protocol when it expires in 2012. The Kyoto Protocol to the UNFCCC requires its developed country parties to make reductions in their emissions of greenhouse gases by an average of some 5.2 percent from 1990 levels throughout its five-year commitment period, 2008–2012. The Bali road map is of particular importance in that the UNFCCC parties agree to consider “measurable, reportable and verifiable nationally appropriate mitigation actions” for all parties, including developing country parties, although developed country parties also agree to consider “commitments, . . . including quantified emission limitation and reduction objectives.” For present purposes, even more significant is the provision of the action plan that commits the parties to consider “policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries.” Foreword david freestone ix This decision represents a major breakthrough in the UNFCCC negotiations . In addressing the issues of climate change, it is worth recalling that the text of the 1992 convention puts the important role of sinks, such as forests, in absorbing carbon on a par with the need for the reduction of greenhouse gas (GHG) emissions. For example, article 4(1)(d) requires the parties to “address stabilization of climate by sources and use of sinks,” and article 3(2) requires that parties “should take precautionary measures . . . [and] lack of scientific certainty should not be used as a reason for postponing such measures . . . which [should] . . . cover all relevant sources, sinks and reservoirs [of GHGs].” Nevertheless , the issue of sinks was highly controversial in the negotiation of the Kyoto Protocol and thereafter in the protracted process leading to the development of the “guidelines, policies and rules” for the implementation of the protocol contained in the now-famous Marrakech Accords—agreed at the seventh session of the Conference of the Parties (COP) to the UNFCCC in Marrakech in November 2001. The Marrakech Accords set out the basic regulatory framework for the protocol and its so-called flexibility mechanisms, including the Clean Development Mechanism (CDM). Under the CDM, industrialized countries can invest in projects in developing countries that reduce emissions of GHGs and then use the “certified” emission reductions produced by those projects toward their own reduction targets. Despite the fact that agriculture, forests, and other land uses (AFOLU) account for some 20 percent of the total amount of carbon that exists on the planet, it was decided at Marrakech that only reforestation and afforestation projects would be eligible for consideration under the CDM—and indeed to date only one such project has been approved by the CDM Executive Board. In the same vein, the European Emissions Trading Scheme (ETS), which began operations among the EU countries in 2005, does not count sinks at all. There are a number of reasons for this—some political but others methodological . However, as we move into the beginning of the Kyoto commitment period and attention is focused on the post-2012 regime, it is important that sinks, and particularly forest sinks, are firmly back on the agenda. In 2005, at the eleventh session of the COP, Papua New Guinea and Costa Rica—with support from a number of important forested countries—put forward a formal proposal that considers the crediting of benefits from avoiding further deforestation. This is a vitally important issue. The 2006 Stern Review on the Economics of Climate Change, commissioned from a team led by economist Sir Nicholas Stern by the then U.K. chancellor of the exchequer, Gordon Brown, identified avoided deforestation as the cheapest option for mitigating increases in emissions of greenhouse gases.1 It is not a free option, nor is it even particularly cheap. Sophisticated monx foreword 1. See www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_ climate_change/sternreview_summary.cfm. [18.117.182.179] Project MUSE...