The most surprising thing I heard yesterday on Day 2 of the COP15 meetings in Copenhagen came at nearly 10 o'clock at night after a long 12-hour day of meetings and negotiations.
A Kenyan representative speaking on the role of communities in reducing emissions from deforestation and degradation, or REDD, said this: "REDD is purely a developing country issue."
REDD is the term given to the concept of conserving the world's remaining forests and ensuring sustainable livelihoods for forest-dependent peoples, while avoiding the greenhouse gas emissions that would have been generated from deforestation. Incorporating REDD into a future international climate agreement is a main theme of COP-15.
A major issue is financing -- some argue that forest conservation should be financed through government-to-government public funds, while others argue that far more capital can be mobilized from "market-linked" REDD, in which conservation activities generate tradable carbon credits. Under either approach, claims on the finance required to effectively protect the world's forests range from $10 billion a year, most often quoted by the United States and developed nations, to several hundred billion dollars, according to developing nations.
The comment from Kenya worried and amazed me for at least three reasons.
One: REDD is probably the main reason I am attending COP15 on behalf of my company New Forests, a forestry and ecosystem services investment management firm. New Forests is based in Australia, and I head an office in the U.S., -- both developed countries. The company works to develop leading-edge investment theses around ecosystem services, such as carbon, and sees REDD as a potential "win-win" that can generate commercial returns and provide an economic alternative to the activities driving deforestation.
Two: Market-linked REDD is a centerpiece of the climate bills being debated in the U.S. Congress. Australia also has a strong market-oriented negotiating view on REDD. This comes back to the rationale of carbon markets -- efficient distribution of capital for the greatest amount of emission reductions at the least cost. For businesses that will be regulated under the U.S. and other developed country climate schemes, REDD can be a low-cost offset option that helps contain costs in early years. The atmosphere does not know the difference: Emissions reduced from avoiding deforestation have the same climatic benefit as emissions reduced from moving to renewable energy, for example, but the latter is a more expensive solution that will take time to implement.
Three: It is hard to see how the developed world will achieve the aggressive emission reductions being discussed only through changes at home. For example, current versions of the U.S. Senate climate bill allow for 500 million tons of international offsets per annum, rising to 1.25 billion tons if there is insufficient supply from domestic sources. The entire global project-based offset market traded approximately 500 million tons in 2008, so the participation of the U.S. could double demand practically overnight.
These are all developed world issues, perceiving REDD through the eyes of offsets, carbon markets and mitigation. But the communities in the developing world where REDD will take place have a vastly different view that focuses on capacity building, technology transfer, benefit sharing and free prior and informed consent.
These phrases, which could be considered UN-speak buzzwords, are critically important to ensuring environmental and social integrity of REDD. But they are not typical private sector issues. This points to a potentially wide gap between the investment and abatement hopes of REDD and the livelihood and poverty alleviation hopes. These views surfaced strongly on Day 2.
There is common ground, however -- REDD was passionately discussed by country delegations in the Subsidiary Body on Scientific and Technological Advice, a technical group that is near agreement on text for technical issues related to REDD accounting and other methodological issues.
But the politics will have to wait until the Ad Hoc Working Group on Long-Term Cooperative Action begins its debates on REDD. Expected this week but yet to be scheduled, the Ad Hoc group will have to work through the political compromises around market-linked REDD, incorporating the rights of communities and indigenous groups and a long list of other thorny issues.
This is where the real business of REDD will be decided, hopefully aligning developed and developing country issues in a way that meets the needs of both.
Marisa Meizlish is the director of New Forests Advisory Inc, the advisory arm of a global forestry and eco product investment management firm. She directs New Forests' San Francisco-based operations, which focus on new business development, advisory, environmental policy analysis and corporate communications.
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