12 August 2010
A forestry specialist says the regulations around reducing emissions from deforestation and forest degradation (REDD) must be more certain if the market is to move forward.
Speaking on a webinar hosted by Carbon Finance on Friday, Jan Fehse, head of forestry services at project developer EcoSecurities, said the lack of a regulatory framework for REDD is holding the market back. Without a formalised REDD regime, he said, there is limited 'pre-compliance' interest from emitters hoping to use REDD credits to meet future regulatory obligations. Meanwhile the "fickle" voluntary market remains small and at the whims of the "trends and flavours of the day".Fehse said both US legislation and UN processes have important implications for REDD's future.
"What we need is a proper bill now. One that has support from both camps," he said of the struggle to introduce federal climate change legislation in the US. "If that happens I think we will see a lot of movement in the market."
A positive response to an outline for a REDD regime at the UN climate negotiations in Cancún this December would further progress the forestry market, he said but added there are question marks over how a future regulatory regime would be shaped.
"Right now, we don't have certainty about what this maket will look like because we don't know where exactly it's going to come from and in which form. So we need a little bit more certainty about that," Fehse said.
Also participating in the webinar, Andrew Hedges, a London-based partner in the climate change practice at law firm Norton Rose, said while an international REDD regime has yet to be agreed upon, a number of public sector initiatives are "putting the details on the building blocks" and paving the way for greater private sector investment.
He said developments such as UN-REDD, the World Bank's Forest Investment Programme and Forest Carbon Partnership Fund, and the France-Norway REDD partnership, are creating opportunities for private sector involvement, enabling "real action to start happening".
"For the private sector it will be about gettting closer to host countries and the developments of strategies in those countries," he said.
"It will be about being nimble and spotting where the intearnational multilateral funding will be going. And it may well involve ensuring or attempting to design projects which also sit neatly as demonstration projects under a wider international process."
Jeff Calvert, Vancouver-based chief financial officer of project developer Ecosystem Restoration Associates, suggested there is more REDD investment activity in North America than most people believe.
"Our feel is that in REDD, a lot of people are doing it but nobody's talking about it," he said. "And that's primarily because large emitters, we think, are investing in projects and keeping it quiet as a hedge against future regulation, but doing it at very low prices.
"And because the tonnes haven't been verified or validated yet in most cases – because the [baseline and monitoring] methodologies aren't there – those tonnes aren't getting tracked or reported anywhere."
Source: www.environmental-finance.com
