Avoided Deforestation Partners wants to make living trees more profitable than dead ones

"One ton of carbon dioxide is presently trading on European markets at about £10. A hectare of rainforest stores about 500 tons and therefore has a potential value of £5,000; but, as the New York Times recently pointed out, millions of hectares of rainforest are being cut down to create agricultural land worth £100 a hectare. Why are we allowing people to be deprived of their natural habitats, biodiversity to be diminished and climatic catastrophe to be hastened, and all at a loss of £4,900 a hectare? There are no easy answers, but I am sure that part of the blame, and more importantly of the solution, is down to us accountants." - Sir Michael Peat.

I found this quote in a book I'm currently reading (The Sustainable MBA: The Manager's guide to green Business by Giselle Weybrecht), and it's from an article published by Sir Peat in 2007. The price of one ton of CO2 have gone up since then (about £11.3 if you look at the Spot price last month in the European market) and it looks like this concept that living trees should be more profitable to their owners than dead trees is getting more and more support.

As we reported here before, policymakers globally and in the U.S. are having difficulties to establish a program, such as REDD, that would actually make it happen. The vacuum left is beginning to be filled in with voluntary initiatives. We wrote here last October on Carbon Canopy, and now I've just learned about a coalition called 'Avoided Deforestation Partners' which has similar plans.

According to their website, Avoided Deforestation Partners is an international network of thinkers, strategists and practitioners, founded by leaders in forest carbon policy and project implementation, science, finance, and conservation in 2007, to support international efforts to halt tropical deforestation. It includes environmental groups and companies that represent a range of business interests, from heavy emitters that include American Electric Power, Duke Energy, Pacific Gas and Electric, and El Paso Corp., to other companies such as Starbucks, Marriott and Disney.

As described by Marc Gunther on ClimateBiz.com, Avoided Deforestation Partners is the brainchild of Jeff Horowitz, a 58-year-old architect and newcomer to the environmental movement who has quietly become an influential player as climate change legislation inches its way through a divided Congress. Gunther had a very interesting talk with Horowitz about the coalition's plan to create a "a mechanism through which either regulated companies or unregulated companies, or governments, can make payments to help prevent deforestation in the global south."

The interview is available at http://www.greenbiz.com/podcast/2010/02/12/growing-money-trees

It will be interesting to see if initiatives such as this one or Carbon Canopy will succeed in a place where policymakers seem to fail. And it's even more interesting to see if these initiatives can help promote broader programs such as REDD. We'll keep you posted!

Yours,
Raz @ Eco-Libris

According to the Forest Carbon Markets 2009 report uncertainty is high but the market is growing

The State of the Forest Carbon Markets 2009 report was released with the conclusion that "At the end of 2009, the market for forest carbon stands in an uncertain position on the verge of potentially enormous growth".

As ClimateBiz reports, "State of the Forest Carbon Markets 2009: Taking Root & Branching Out," is based on research involving more than 100 market participants whose work encompasses 230 projects that have generated credits in 40 countries for over 20 years.

The report is explaining how the current uncertainty on the REDD and the U.S. regulation fronts generate both risks and opportunities for investors interested in forest-based carbon credits:

Already countries have committed politically in international negotiations to reducing emissions from deforestation and degradation (REDD) and several have also committed financing. At the same time, the Clean Energy Jobs and American Power Act awaiting it’s fate in the United States’ Senate explicitly calls for domestic forestry offsets and includes financing for REDD.

It is not possible to say what shape US climate regulation will take – or what sort of global mechanisms for funding REDD will emerge from current international negotiations. Amidst this scene of opportunity and risk, investors are still eyeing forest carbon, though many are waiting on more definite regulatory signals before taking a financial leap. Even without market certainty, infrastructure and measurement tools continue to mature rapidly. Such tools, along with years of lessons learned accumulated, will inevitably serve as the foundation for forest carbon finance in years to come.

Regardless of this uncertainty, the forest carbon market grew from $7.6 million in 2006 to $37.1 in 2008 (after a $40.5 million record in 2008). The report said the forest carbon market was worth $21 million in the first half of 2009.

This is a very interesting and important report and you can find it at http://moderncms.ecosystemmarketplace.com/repository/moderncms_documents/SFCM.pdf

Yours,
Raz @ Eco-Libris

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Is it a REDD Christmas? not really, not yet.

Santa's red suit got me wondering if there's any kid out there who asked Santa to do something about the REDD mechanism and put life into it. I'm not sure about it, but it sure looks like REDD needs some help, even after Copenhagen, when for a minute it looked like the only shining star around.

The agreement that came out of the negotiations in Copenhagen (Copenhagen Accord) includes a reference to REDD, as follows:

"We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries."

The translation of this language is that basically there's a lot of good will and understanding of the need to initiate a mechanism with financial incentives that will protect the forests, but no promises are made and no time frame is provided.

There was also a draft that went into more details about the REDD mechanism, but as mongabay.com reported, it was weakened from earlier versions. REDD-Monitor adds that this draft "includes no mention of targets for stopping deforestation. There are no commitments for long-term finance. Safeguards are weak to the point of non-existent. Leakage is not meaningfully addressed. The principle of free, prior and informed consent by indigenous people is nowhere to be seen."

And there's also some money on the table as a result of the negotiations. The US, UK, France, Japan, Australia and Norway pledged $3.5bn in Copenhagen to start REDD in the over the next three years. Still, as Carbon Positive reports, there is some doubt as to whether these promises still stand in the absence of a comprehensive climate agreement.

Are these results satisfying? well, it depends who you're speaking with. It's depressing," Kevin Conrad, executive director of the Coalition of Rainforest Nations, a group of 40 forested nations, told the Associated Press. "REDD gets punted along for another year." John O. Niles of the Tropical Forest Group also didn't like the results and told mongabay.com that "The REDD text published is a major backdown from what almost everyone thought was an advanced text on many regards."

Others, like Jeff Horowitz, founding partner of Avoided Deforestation Partners, a group pushing for U.S. leadership on REDD, were more optimistic. He told mongabay.com that "We cannot let this procedural setback diminish our resolve to create policy frameworks that addresses this immediate and scalable solution to climate change. I am certain this delay in Copenhagen will serve to fire up the US environmental community, and our private sector partners, to be more motivated than ever to see the U.S. Senate pass climate legislation that includes robust international forest protection provisions in the first quarter of 2010."

The bottom line is that even though it looked for a couple of days that the REDD issue can be finalized separately and does not have to be dependent on a general agreement, it looks like it won't work this way. I think it's a bit naive to believe that REDD has a life of its own and can be launched successfully no matter what framework is agreed upon, if at all. Strong and effective REDD mechanism is possible only as a part of a strong and effective global accord.

This is I believe one of the main lessons from Copenhagen and I hope it will drive all of us who are worried about the forests to keep pressing the politicians to agree on a meaningful global accord with a meaningful REDD mechanism in it.

More articles about REDD:

Everything you always wanted to know about forestry carbon credits - A special interview with Paulo Lopes of Carbon Clear

Is REDD going bad? Is it going to enable conversion of natural forests into industrial plantations?

The potential and risks of forest-based carbon offsets:

Part 1 - the Carbon Canopy

Part 2 - Noel Kempff and the Greenpeace report

Part 3 - How it can actually work?

Happy Holiday!
Raz @ Eco-Libris

Eco-Libris: Promoting sustainable reading!

Everything you always wanted to know about forestry carbon credits - A special interview with Paulo Lopes of Carbon Clear

Today the U.N. Climate Change Summit (COP15) gets underway and no matter how optimistic you are about these talks, I think it's an exciting day and I hope the last day will be even more exciting!

One of the issues that will be brought up during these talks is the REDD mechanism, which is supposed to provide monetary incentives to prevent deforestation. We covered this issue several times in the last couple of month (see our 3-part series on the potential and risks of forest-based carbon credits).

Today, just in time for the Copenhagen talks, we have an interview with Paulo Lopes, a Carbon Management Consultant at Carbon Clear, who holds Msc in Environmental Technology at Imperial College London and did his thesis on forestry carbon standards. Paulo is one of the most knowledgeable persons I know on forestry based carbon credits and we thank him for the opportunity to get a better understanding of one of the most interesting issues to be discussed in Copenhagen in the next 12 days.

Hello Paulo. You did your Master's Thesis about Forestry carbon standards (“Review of Forestry Carbon Standards – Development of a tool for organizations to identify the most appropriate carbon credit") - what brought you to write about this issue?
My masters degree had a large focus on climate change policy and the carbon market. To gain a deeper understanding I decided to work with Carbon Clear as a Forest Carbon Offset Analyst and learn from their knowledge and experience.

One would think that all carbon credits are the same, but they are like any other product whereby quality influences price. While researching forestry projects to invest in, I came across a range of carbon credits coming from a multitude of different forestry standards.

This can be confusing, even for people working in the sector. As there were only a limited number of independent reviews about the standards available, I decided to do a research and comparative study of all the forestry standards that are up and running in the world. This helps to understand what makes them different from each other and most importantly which standards are validating high quality carbon credits.

What is the biggest problem we have right now with forestry carbon credits and how it can be solved?
At the moment, the biggest problem is that only tree planting projects are accepted under the Kyoto Protocol. On top of that, the rules to validate these projects are so complex that only less than 0.5% of the carbon projects are forestry ones.

In addition, deforestation accounts for almost 20% of global GHG emissions, and there is no mechanism (such as REDD – Reduce Emissions from Deforestation and Degradation) to reduce it under the Kyoto Protocol. It means that no carbon finance has been invested in projects to stop deforestation.

The voluntary carbon market, which regulates outside the Kyoto Protocol, began to fill the gap for forestry carbon credits and several standards flourished to provide the rules to validate forestry projects. But we are still at a very early stage, most of the standards were only started to validate forestry projects in 2009.

The post-Kyoto agreement is the key to boosting carbon finance in forestry projects. Governments, NGOs and businesses need to work hard to include it in their negotiations. While we are waiting for governments to put their policies into practice, we as consumers and businesses need to provide carbon finance to these projects.

What's your response to the criticism on carbon offsetting and especially on forest-based offsetting schemes, such as Justin Francis of Responsible Travel who stopped using it and says "Carbon offsetting is an ingenious way to avoid genuinely reducing your carbon emissions" (Ethical travel company drops carbon offsetting, Nov 7)?
It’s remarkable that a business promoting Western Australia as its destination of the month is now encouraging its clients not to offset their emissions in an effort to protect the environment. My view is that consumers and businesses must cut their emissions but the technology is just not in place to get this to zero. As nearly all human activity results in carbon emissions, offsets provide a valuable and effective tool in reducing our unavoidable emissions.

Therefore, the question is not whether we should reduce OR offset. What we must do is to reduce AND offset. We do not have the luxury to be fussy about how we reduce the emissions. We must use every solution that is in our hands. More than 350 million tonnes of CO2e have been reduced from offsetting projects in the developing world. These reductions would not have been possible without the money coming from carbon credits.

The offsetting market has evolved significantly in the last few years and is now much more sophisticated. Once an offset project is set up, independent certifiers will visit the project and check if the project meets the criteria and if it is reducing emissions. Every year a certifier will come back to the project and verify the emissions reductions. All the process is documented and available online to anyone.

Forestry projects add complexity to the process. While planting a tree absorbs carbon emissions thus reducing GHG, if the tree dies, the tree will release most of the carbon it has absorbed during its lifetime. One of the requirements to validate a carbon credit is that it should be permanent. All the standards developed solutions to solve this problem.
There are many mechanisms to prevent this, I will only exemplify two solutions:

Another tree must be planted in order to reabsorb the carbon released.
Use a buffer zone. It means that a forestry project can only sell part of the carbon it has reduced. Let’s say, a project uses a 50% buffer zone. It means that it can only sell 50% of the carbon credits. If something happens to some of the trees, it will be able to use the carbon credits from the buffer zone.

When it comes to carbon credits, should we make a difference between conservation (REDD) and reforestation/ afforestation projects or they're just the two sides of the same coin?
REDD and reforestation/afforestation projects are developed differently. A REDD project will prevent a forest to disappear. It means that a project developer will need to find solutions to prevent that illegal logging, diseases, fires or any other risks will occur. If it does occur, the certifier will not validate the carbon credits and the project developer won’t be able to sell the carbon credits.

A reforestation/afforestation project needs another type of expertise. Trees need to be planted and a full management system must make sure that the project will run for decades. In addition, it should absorb as much carbon emissions as possible in order to produce more carbon credits. If a tree dies, the carbon released must be discounted accordingly.

Carbon credits will always have one point in common: they have reduced one tonne of carbon emissions. Then, you can find out where it is coming from, whether it be REDD or reforestation/afforestation.

Do you believe providing monetary incentives to discourage deforestation is possible on global level? can we really overcome issues such as additionality or leakage?
We have no choice at this stage. We have to work to make this possible.

We have seen that most of the policies in place do not stop deforestation. The evidence is that in the last 30 years an area equivalent to the size of Texas has been felled down in the Brazilian Amazon. This does not account for all the deforestation in Central Africa and Indonesia. Only a few countries such as Costa Rica managed to protect their tropical forests thanks to government intervention and the financial returns from the tourism industry and the resources from the forest itself.

The only way to really avoid leakage is to monitor all the forests in a country. It is actually relatively inexpensive to monitor all the forests thanks to the use of imaging satellites and aerial photography in addition to ground monitoring. Brazil is working hard to develop such a system, however poorer countries may find this difficult to implement and manage without outside help.

Will the REDD mechanism be included in the next global protocol? and if so, do you believe it can be done without badly compromising it during the process?
It is very likely that REDD will be included in the next protocol. Negotiations between countries/ industries/ NGOs always end up in compromises. From a climate change perspective, compromise is not enough. We should follow what the scientific community is telling us which is that we need to reduce the levels of carbon in the atmosphere dramatically.

The key point for the success of any cap and trade scheme is that the cap should be set in accordance to the science and not to politics. The caps are too high at the moment which makes the price of carbon too low. An increase on the price of carbon will help the world to evolve to a low carbon economy much faster. If the price of carbon is high enough you will start to see thousands of organisations protecting forests and standing in opposition against illegal logging because it makes economic sense for them to do so.

You analyzed in your research several seven voluntary standards - why do we have so many standards? is there a chance they can be merged into one or two main standards?
It is unfortunate that we have so many standards, but this is a new market and until recently nobody knew how to calculate the carbon and address all the issues surrounding forestry projects. Several organizations started to take initiative independently and provide the tools to make it happen.

The positive aspect is that the standards are competing against each other which brings innovation and lowers costs. However, this is not sustainable and nobody in the market wants to deal with so many standards, therefore it is very likely that only a few of them will survive. It’s up to the market and governments to decide which will remain.

You used 12 criteria to compare these standards - What do you think is the most important criteria among them and what criteria was found to be the biggest differentiator between the best standards and the inferior ones?
The most important criteria for any standard are:

Additionality: provide evidence that a project would not have been possible without carbon finance.

Permanence: ensure that if a tree is destroyed (fire, disease, illegal logging…), there are mechanisms to replace the carbon released.

Leakage: provide evidence that by stopping deforestation in a project, the logging activity has not been displaced to another forest.

Registry: each carbon credit must have a serial number; this means that a carbon credit is traceable back to its origin and is unique.

Transparency: when buying a carbon credit, the buyer should be able to have access to all the documentation of that carbon project (project documentation, validation report, monitoring report, stakeholder consultations, pictures…)

All the standards take into account these criteria, but only a few of them address these points properly. If I want to buy a forestry carbon credit for my personal offsets, I would buy from Voluntary Carbon Standard & CCBS or CarbonFix.

Finally, what's your advice to a business or an individual who want to minimize their environmental impact and their carbon emissions and just get more confused with all of this data - what they should do? where to start?
The first step is to take advice from experts such as reputable carbon management companies. There is a lot of misunderstanding around carbon credits/ offsets/ carbon management and a simple phone call can help to clarify these issues.

To find a good carbon management company, you should look for the ICROA logo on their website. A carbon management company can only become a member of ICROA, if it follows the code of best practice. Among many aspects, it means that a member can only provide high quality carbon credits (VCS, Gold Standard and CDM/JI) and uses the best practice methodologies to reduce carbon emissions.

Regarding minimizing the environmental impact, there is a simple rule to follow:

Measure. Reduce. Offset.

Measure: the first step is to measure your impact, determine the carbon footprint. We need to understand the problem before we can reduce emissions. Most of your emissions may come from your travel, your energy consumption or your waste for example.

Reduce: after identifying where the carbon emissions come from, we need to reduce them as much as possible by setting up a plan and objectives, looking for solutions and put them into practice.

Offset: after putting in place an emission reduction plan, you need to offset the remaining ones. We will always have an impact, no matter how green we are and we need to take action to offset that impact. On top of that, you are providing finance to people in developing countries to grow sustainably.

Thank you Paulo!

Yours,
Raz @ Eco-Libris

Eco-Libris: check our special holidays offer!

*photos credit: Paulo Lopes and SHI accordingly

Is REDD going bad? Is it going to enable conversion of natural forests into industrial plantations?

Last month we had a 3-part series on the potential and risks of forest-based carbon credits following the growing discussion about the Deforestation and Degradation in developing countries (REDD) mechanism. Now it looks like the risks part should to be updated.

Bloomberg reported about a proposal that was made during the climate talks in Bangkok last month didn’t include wording to protect natural forests from being used to cultivate managed woodlands. In other words, carbon credits will be given also to those who wish to convert large-scale natural forests into industrial plantations.

According to Mongabay.com, the provision, which included safeguards against the conversion of natural forests to forest plantations, was removed the negotiating text during the final session at climate talks in Bangkok. The European Union, backed by Democratic Republic of the Congo and other Congo Basin countries, blocked reinstatement of the conversion safeguard, despite strong requests to do so from Brazil, India, Mexico, Switzerland, Norway, and more than a dozen other countries.

Environmentalists say that without the provision, forestry companies could receive REDD payments for logging tropical forests and replacing them with single-species plantations, which are biologically impoverished and store less carbon relative to natural forests.

Some observers described this move as a tactic one and were quite sure this provision, which included "the words “against the conversion of natural forests to forest plantations,” will be added eventually to whatever proposal will hopefully will be approved in Copenhagen next month.

In the meantime, the talks which ended Barcelona didn't provide any encouraging signs about it as REDD-Monitor reports today. It quotes Roman Czebiniak, political advisor on climate change and forests for Greenpeace International, who told SolveClimate that “Right now, we have a pretty worthless safeguard and no rules to implement it, at a time when we need strong safeguards and strong rules are needed.”

Zebiniak remains optimistic that safeguards and monitoring could still be inserted into a REDD agreement, even after Copenhagen, and we also keep our fingers crossed that this mechanism, which as we reported last month has a promising potential, won't becme worthless because of political agendas and lack of will to make sure it will benefit the environment and not just couple of big forestry companies.

Yours,
Raz @ Eco-Libris

Eco-Libris: Promoting sustainable reading!

The potential and risks of Forest-based carbon offsets: part 3 - REDD: how it can actually work?

On the first part on our series on forest-based carbon credits we talked of the potential of this concept as we saw on the example of Canopy Carbon. On the second part we discussed the risks of this mechanism following the report of Greenpeace on Noel Kempff Climate Action Project (NKCAP) in Bolivia. Today on our final article in this series we try to rap it all and find out if this option can actually work.

WWF wrote couple of days ago on their website that "failure by the world’s financial leaders to support responsible forest finance will allow rampant deforestation to continue and contribute to the disastrous effects of climate change." This logic is very clear and I definitely agree with it and think that REDD (Reducing Emissions from Deforestation and Forest Degradation) can be one of the implementations that follow this logic.

But no matter how tempting are the prospects of REDD both for the environment and the participants, there are some issues that remain a problem. A big problem. Just as a reminder, here are the main issues we need to deal with, as summarized by REDD-Monitor:

• monitoring the state of forests and the volumes of carbon either being emitted or stored;
• in preventing ‘avoided deforestation’ efforts in one location simply shifting the problem elsewhere; and
• finding ways that funding can be got to the people living in the forests – who should ultimately make the decisions about whether their forests stand or fall.

So what do we do? how we do it right? the answer I believe is a set of guiding rules that every REDD project will need to follow to be considered part of this mechanism. Now, it doesn't have to be necessary in a form of regulation - it can be a voluntary guidelines, just like the FSC or the Equator Principles. The only thing is that there should be only one benchmark - if every project will use its own set of guidelines, then it's worthless. Uniformity is a must here.

For example, Carbon Canopy will be using "the highest standards in the voluntary market will be used– the Voluntary Carbon Standard and Climate Action Reserve." Now, these two standards are great, but according to 'Review of Forestry Carbon Standards', a research of Paulo Lopes, a Carbon Management Consultant at Carbon Clear, when it comes to REDD, there are some couple of other standards that can be a good fit such as the Climate, Community & Biodiversity Standard (CCBS), Plan Vivo, or American Carbon Registry (ACR).

So what happens if another project choose to use one of these standards? it will have a similar reliability but we won't be able to effectively follow, evaluate and compare these projects. And therefore we need all projects to follow the same set of standards and rules, and it should address all the main issues, such as how to calculate the carbon savings, additionality, leakage, benefits for local communities and permanence.

And this can and should be part of the Copenhagen Conference in December. The REDD effort can succeed if it will be a global effort and hence Europe, U.S., China and other countries should unite in Copenhagen and promote one solution for all. This is the time to do it and no better place to start with than Copenhagen.

Other parts of this series:

Part 1 - the Carbon Canopy

Part 2 - Noel Kempff and the Greenpeace report

Yours,
Raz @ Eco-Libris

Eco-Libris: Promoting sustainable reading!