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Voluntary markets for afforestation , reforestation and avoided deforestation

Voluntary markets for afforestation , reforestation and avoided deforestation. Learning outcomes. In this presentation you will learn about voluntary markets for afforestation , reforestation and avoided deforestation. . Topic 5, Section F, slide 2 of 17. Topic 5, Section I, slide 2 of 18.

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Voluntary markets for afforestation , reforestation and avoided deforestation

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  1. Voluntary markets for afforestation,reforestation and avoided deforestation

  2. Learning outcomes In this presentation you will learn about voluntary markets for afforestation, reforestation and avoided deforestation. Topic 5, Section F, slide 2 of 17 Topic 5, Section I, slide 2 of 18

  3. Outline • Introduction • What is a voluntary market? • Examples of compliance markets • Example of voluntary markets • Example of voluntary carbon projects Topic 5, Section I, slide 3 of 18

  4. Introduction • Afforestation and reforestation (A/R) Clean Development Mechanism (CDM) was designed to comply with legally binding Kyoto Protocol to mitigate climate change • The rules and modalities follow the Marrakech Accord • To date only six A/R CDM projects are approved out of more than 1700 registered CDM projects • REDD is entering its readiness phase • Learning the lesson from A/R CDM process and its complexity, voluntary A/R and REDD markets are emerging Topic 5, Section I, slide 4 of 18

  5. What is a voluntary market? • Markets that do not need to comply with rules that are legally binding, such as the CDM under the Kyoto Protocol • To demonstrate their integrity, the markets voluntarily follow accounting and verification systems applied in the compliance markets • The must produce Verified Emission Reduction (VER) rather than Certified Emission Reduction (CER) in A/R CDM Topic 5, Section I, slide 5 of 18

  6. Voluntary markets for A/R CDM • Portfolio Carbon Fund (PCF) • all sectors • with loan component • Community Development Carbon Fund (CDCF) • for small-scale projects • sector: energy, urban, waste, agroforestry • prioritises the Least Developed Countries • contract price US$26 to US$28 per tonne of carbon • Bio Carbon Fund (BCF) • Land-use, Land-use Change, and Forestry (LULUCF) sector • to improve people’s livelihoods • to avoid erosion and desertification • contract price US$12 to US$16 per tonne of carbon Topic 5, Section I, slide 6 of 18

  7. RED financing: buyer’s/donor’s view Buyer/donor’s view • Price/impact per $ • Quality of product • Biodiversity conservation • Social equity • Permanence • Sovereign risk • Fungibility in markets • Credit for early action • Political feasibility Possible buyers/donors • Development agencies/Banks (US$40 B/y) • Bilateral donors (US$80 B/y) • Kyoto market (low B/y) • Voluntary markets (lower B/y) • NGOs ($100s M/y) Topic 5, Section I, slide 7 of 18

  8. RED financing: seller’s view Seller’s view • Capacity building • Upfront payments for transitional costs • Guarantee of continuing funding for maintenance • Bundle with other Payments for Environmental Services (PES) • Social equity • Political feasibility Differing circumstances • Active deforestation • Potential future deforestation • Early action to reduce deforestation • Forest degradation Topic 5, Section I, slide 8 of 18

  9. Examples of compliance markets(as of30 July 209) ETS=Emission Trading SchemeNSW=New South WalesCCX= Chicago Climate Exchange Topic 5, Section I, slide 9 of 18

  10. Examples of voluntary carbon markets Updated very frequently Biodiversity Markets $ 373,980,629 Water Markets $ 373,655,115 Carbon Markets $ 92,344,370 Cost (US$) Land Other   642,600   n/a US Conservation Banking 238 Endangered Species Credits 307.5 acres 308.81 wetland credits US Wetland Banking 27,792,900 Source: Ecosystem Marketplace Topic 5, Section I, slide 10 of 18

  11. Example of voluntary carbon projects (1/2) Topic 5, Section I, slide 11 of 18

  12. Example of voluntary carbon projects (2/2) Topic 5, Section I, slide 12 of 18

  13. Carbon certification • Voluntary Carbon Standard (VCS) • initiated by the Climate Group, the International Emissions Trading Association and the World Economic Forum • established in late 2005 • Climate, Community and Biodiversity (CCB) Standards • initiated by Conservation International • first edition standard was launched in 2005 • advised by CIFOR, Tropical Agricultural Research and Education, and World Agroforestry Centre • The Gold Standard • initiated by World Wildlife Fund, SSN and Helio International • the Gold Standard for CDM projects was launched in 2003 Topic 5, Section I, slide 13 of 18

  14. Voluntary Carbon Standard (VCS) • Standardise and provide transparency and credibility to the voluntary offset market • Enhance business, consumer and government confidence in voluntary offsets • Create a trusted and tradable voluntary offset credit; the Voluntary Carbon Unit (VCU) • Stimulate additional investments in emissions reductions and low carbon solutions • Experiment and stimulate innovation in emission reduction technologies and offer lessons that can be build into future regulation • Provide a clear chain of ownership over voluntary offsets that prevents them being used twice; this is achieved through multiple VCS registries and a central project database that is open to the public http://www.v-c-s.org/ Topic 5, Section I, slide 14 of 18

  15. Climate, Community and Biodiversity (CCBA) Standards • Identify projects that simultaneously address climate change, support local communities and conserve biodiversity • Identify projects that promote excellence and innovation in project design • Mitigate risk for investors and increase funding opportunities for project developers • CCB Standards certification can help projects garner international credibility and locate additional support and resources http://www.climate-standards.org/ Topic 5, Section I, slide 15 of 18

  16. The Gold Standard • Help investment in additional sustainable energy projects • Ensure significant and lasting contributions to sustainable development • Provide assurance that investments have environmental integrity • Increase public support for renewable energy and energy efficiency http://www.cdmgoldstandard.org/ Topic 5, Section I, slide 16 of 18

  17. Discussions • Should carbon credits in a compliance market be only about carbon? • Should they require co-benefits like sustainable development and biodiversity conservation? • In either or both cases, how should the requirement be structured? • If not, why not? Topic 5, Section I, slide 17 of 18

  18. Thank you for your attention

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