Fostering REDD+ Investment Through Effective Legal Frameworks: Lessons From the Development of Early Forest Carbon Projects

Forest carbon projects have been developed under the Clean Development Mechanism (CDM), the voluntary market and other domestic schemes. These projects provide insight into the practical challenges for REDD+ implementation with respect to defining rights to carbon, ensuring the permanence of REDD+ areas, and creating “investment-grade” carbon commodities which are capable of attracting private sector finance. Given that private sector finance will be necessary to scale-up REDD+ implementation, insight regarding the legal frameworks required to support private sector investment is valuable. This paper does not seek to advocate for either a market-based or projectlevel approach to REDD+ implementation, but draws on practical experience with early forest carbon projects to explore how legal frameworks for REDD+ can encourage private sector Investment.

As an international initiative, “Reducing Emissions from Deforestation and Forest Degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries” (REDD+) has emerged out of the United Nations Framework Convention on Climate Change (UNFCCC)/Kyoto Protocol negotiations. At the 16th Conference of the Parties (COP16) in Cancun, Parties agreed to establish a mechanism for REDD+; at COP17 in Durban, further advancement was made with recognition for the role of private sector participation in financing REDD+ implementation. The exact details of that mechanism are still being debated and the actual approach to REDD+ (for example, whether developing countries will implement it solely at the national level or incorporate regions and project-based activities into their accounting frameworks) remains to be determined. The mechanism’s capacity to generate tradable carbon credits (REDD+ credits) for sale in global carbon markets is likely to be an important focus of the ongoing international climate change negotiations, while individual governments that are developing domestic emissions trading schemes still need to confirm the extent to which REDD+ credits will be accepted as a means of meeting compliance obligations.

Alongside these developments, the voluntary market (for carbon offsets) has facilitated the development of numerous forest carbon projects and acted as a major driver of forest carbon investment to date. Forest carbon projects have also been developed under the Clean Development Mechanism (CDM) and domestic schemes such as the New South Wales Greenhouse Gas Reduction Scheme (NSW GGAS). Forest carbon projects around the world have faced common challenges within what are nonetheless unique, country-specific legal and political systems. These early forest carbon projects can therefore provide insight into the practical challenges for REDD+ implementation with respect to defining rights to carbon, ensuring the permanence of REDD+ areas, and creating “investment-grade” carbon commodities which are capable of attracting private sector finance. Given that private sector finance will be necessary to scaleup REDD+ implementation, insight regarding the legal frameworks required to support private sector investment is valuable. This paper is therefore written from a project-level, private sector perspective drawing on practical experience working on early forest carbon projects and transactions (in the voluntary market, under the CDM and also under domestic trading schemes). It focuses on the lessons learned from early project experience in the forest carbon market, exploring the legal issues that project developers and policy-makers must face in designing regulatory frameworks for future REDD+ implementation that seek to facilitate private investment.

Copyright:	© Lexxion Verlagsgesellschaft mbH
Quelle:	Issue 01/2013 (April 2013)
Seiten:	11
Preis inkl. MwSt.:	€ 41,65
Autor:	Dr Sophie Chapman Mr Martijn Wilder

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Leichtweiß-Institut
Physikalische und biologische
Aufbereitungs- und Behandlungs-
technologien, TU Braunschweig

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