Climate change and forests

climate change forests and } Emerging Policy and Market Opportunities Charlotte Streck, Robert O’Sullivan, Toby Janson-Smith, and Richard G Tarasofsky Editors climate change and forests climate change and forests Emerging Policy and Market Opportunities Charlotte Streck, Robert O’Sullivan, Toby Janson-Smith, and Richard Tarasofsky editors chatham house London brookings institution press Washington, D.C Copyright © 2008 royal institute of international affairs Chatham House (the Royal Institute of International Affairs) is an independent body which promotes the rigorous study of international questions and does not express opinions of its own The opinions expressed in this publication are the responsibility of the authors Chatham House, 10 St James’s Square, London SW1Y 4LE www.chathamhouse.org.uk; charity registration no 208223 Climate Change and Forests: Emerging Policy and Market Opportunities may be ordered from: brookings institution press c/o HFS, P.O Box 50370, Baltimore, MD 21211-4370 Tel.: 800/537-5487; 410/516-6976; Fax: 410/516-6998 www.brookings.edu All rights reserved No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the Brookings Institution Press Library of Congress Cataloging-in-Publication data Climate change and forests : emerging policy and market opportunities / Charlotte Streck [et al.], editors p cm Summary: “Frames forestry activities within climate-change policy context Analyzes the operation and efficacy of market-based mechanisms for forest conservation and climate change Explores voluntary schemes for carbon crediting, provides an overview of carbon accounting best practices, and presents tools for future sequestration and offset programs Concludes with options for slowing deforestation”— Provided by publisher Includes bibliographical references and index ISBN 978-0-8157-8192-9 (cloth : alk paper) Climatic changes Forest microclimatology Carbon sequestration I Streck, Charlotte II Title SD390.7.C55C57 2008 333.75'15—dc22 2008012169 987654321 The paper used in this publication meets minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials: ANSI Z39.48-1992 Typeset in Adobe Garamond Composition by R Lynn Rivenbark Macon, Georgia Printed by R R Donnelley Harrisonburg, Virginia Contents Foreword ix David Freestone part one introduction Climate Change and Forestry: An Introduction Charlotte Streck, Robert O’Sullivan, Toby Janson-Smith, and Richard Tarasofsky The Idea of Market-Based Mechanisms for Forest Conservation and Climate Change 11 Rosimeiry Portela, Kelly J Wendland, and Laura Ledwith Pennypacker part two the international arena History and Context of LULUCF in the Climate Regime 33 Eveline Trines Risks and Criticisms of Forestry-Based Climate Change Mitigation and Carbon Trading 43 Johannes Ebeling v vi contents Forest Carbon and Other Ecosystem Services: Synergies between the Rio Conventions 59 Jan Fehse Forestry Projects under the Clean Development Mechanism and Joint Implementation: Rules and Regulations 71 Sebastian M Scholz and Martina Jung Case Study: The Humbo Community-Based Natural Regeneration Project, Ethiopia Paul Dettmann, Tony Rinaudo, and Assefa Tofu How Renewable Is Bioenergy? 86 89 Bernhard Schlamadinger, Sandra Greiner, Scott Settelmyer, and David Neil Bird part three practical experiences Design Issues in Clean Development Mechanism Forestry Projects 107 Bruno Locatelli, Lucio Pedroni, and Zenia Salinas Case Study: The San Nicolás Project in Colombia Carmenza Robledo and Patricia Tobón 122 The Permanence Challenge: An Economic Analysis of Temporary Credits 125 Franck Lecocq and Stéphane Couture 10 Project-Based Mechanisms: Methodological Approaches for Measuring and Monitoring Carbon Credits 135 Timothy Pearson, Sarah Walker, and Sandra Brown 11 Characterizing Sequestration Rights Legally in Chile 148 Dominique Hervé and Edmundo Claro 12 Legal Issues and Contractual Solutions for LULUCF Projects under the Clean Development Mechanism Monique Miller, Martijn Wilder, and Eric Knight 163 contents vii part four outlook: avoided deforestation and the post-kyoto agenda 13 Reducing Emissions from Deforestation in Developing Countries: An Introduction 179 Robert O’Sullivan 14 An Accounting Mechanism for Reducing Emissions from Deforestation and Degradation of Forests in Developing Countries 191 Danilo Mollicone, Sandro Federici, Frédéric Achard, Giacomo Grassi, Hugh D Eva, Edward Nir, Ernst-Detlef Schulze, and Hans-Jürgen Stibig Case Study: Creative Financing and Multisector Partners in Madagascar Jeannicq Randrianarisoa, Ben Vitale, and Sonal Pandya 206 15 A Latin American Perspective on Land Use, Land-Use Change, and Forestry Negotiations under the United Nations Framework Convention on Climate Change 209 Manuel Estrada Porrua and Andrea García-Guerrero Case Study: The Noel Kempff Climate Action Project, Bolivia Jörg Seifert-Granzin 223 16 Compensated Reductions: Rewarding Developing Countries for Protecting Forest Carbon 227 Stephan Schwartzman and Paulo Moutinho 17 Creating Incentives for Avoiding Further Deforestation: The Nested Approach Charlotte Streck, Lucio Pedroni, Manuel Estrada Porrua, and Michael Dutschke 237 viii contents part five national systems and voluntary carbon offsets 18 Legislative Approaches to Forest Sinks in Australia and New Zealand: Working Models for Other Jurisdictions? 253 Karen Gould, Monique Miller, and Martijn Wilder Case Study: The West Coast Development Trust, a New Zealand Example Sean Weaver 272 19 Using Forests and Farms to Combat Climate Change: How Emerging Policies in the United States Promote Land Conservation and Restoration 275 Cathleen Kelly, Sarah Woodhouse Murdock, Jennifer McKnight, and Rebecca Skeele Case Study: The Van Eck Forest Management Project in California Michelle Passero, Rachael Katz, and Laurie Wayburn 20 Carving a Niche for Forests in the Voluntary Carbon Markets 289 292 Katherine Hamilton, Ricardo Bayon, and Amanda Hawn Case Study: Reflections on Community-Based Carbon Forestry in Mexico Richard Tipper 308 21 Developing Forestry Carbon Projects for the Voluntary Carbon Market: A Practical Analysis 311 Marisa Meizlish and David Brand Case Study: Carbon Sequestration in the Sierra Gorda of Mexico David Patrick Ross 325 Contributors 329 Index 333 Foreword david freestone I am delighted and honored to have been invited to write a foreword for this excellent and timely work It is particularly timely because in December 2007, in a historic decision, the parties to the 1992 UN Framework Convention on Climate Change (UNFCCC), meeting in Bali, Indonesia, decided to include the issue of avoided deforestation—or “reducing emissions from deforestation and forest degradation” (REDD), as it is known in UNFCCC argot—in the Bali Action Plan This plan is the so-called road map for negotiations that aim to develop by 2009 a legal instrument to replace the 1997 Kyoto Protocol when it expires in 2012 The Kyoto Protocol to the UNFCCC requires its developed country parties to make reductions in their emissions of greenhouse gases by an average of some 5.2 percent from 1990 levels throughout its five-year commitment period, 2008–2012 The Bali road map is of particular importance in that the UNFCCC parties agree to consider “measurable, reportable and verifiable nationally appropriate mitigation actions” for all parties, including developing country parties, although developed country parties also agree to consider “commitments, including quantified emission limitation and reduction objectives.” For present purposes, even more significant is the provision of the action plan that commits the parties to consider “policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries.” ix 332 Patricia Tobón Swiss Foundation for Development and International Cooperation, Switzerland Assefa Tofu World Vision, Ethiopia Eveline Trines Treenes Consult, The Netherlands Ben Vitale Conservation International, United States Sarah Walker Winrock International, United States contributors Laurie Wayburn Pacific Forest Trust, United States Sean Weaver Victoria University and Carbon Partnership, New Zealand Kelly J Wendland Conservation International and University of Wisconsin–Madison, United States Martijn Wilder Baker & McKenzie, Australia Index AAUs See Assigned Amount Units ABN Amro, 303 Above-ground biomass, 91, 139 Accountable preserved carbon (APC), 198 Accounting: and Australian emissions trading scheme, 256; and California Forest Protocols, 285–86; and carbon verification standards, 297–305; and Climate Trust, 284; for deforestation, 182–84; for degradation, 184–85; and double counting, 100–01; elements of, 137–44; error reduction in, 144–46; and forestry project design, 320; for LULUCF projects, 75–76; national-level, 241–43; and NSW Scheme, 264–65; and preserved carbon quantities, 197–98; project-based, 72, 135–47, 182–84; for REDD projects, 191–208; and RGGI, 282 Accuracy and measurement of carbon stocks, 136–37, 144–46 Achard, Frédéric, 191–208 Activity displacement, 50, 143 Additionality: and Australian emissions trading scheme, 256; and baseline determination, 141; and California Forest Protocols, 285; and CDM projects, 76–78, 109–11, 116; and Chilean AR projects, 156–57; and Climate Trust, 283–84; and compensated reductions, 232; and forestry project design, 318, 319–20; and LULUCF projects, 38; and Mexican carbon sequestration, 326; and RGGI, 282 Advocacy, 87 AES-Tiete project (Brazil), 67 Afforestation and reforestation (AR) projects: additional benefits of, 87–88; and carbon credit caps, 46; carbon credit generation with, 312–14; and carbon markets, 20; under CDM, 43–44, 56, 65–67, 72, 79–80, 88; in Chile, 148, 155–58; and conservation, 79–80; development obstacles for, 156–57; and legal title to carbon property rights, 165; 333 334 and LULUCF, 35; and RGGI, 281–82; and VERs, 313 See also Design of CDM projects Africa, 12, 315 See also specific countries Agriculture: in Australia, 253; emissions from, 34, 238; and Kyoto Protocol, 97–101; Latin American expansion of, 216–17; and liquid biofuels, 94–96 Agroforestry and carbon markets, 20 Ahmad, Imtiaz, 303 Albedo effects, 96–97 Alliance of Small Island States (AOSIS), 36, 211 Alternative income programs, 224, 246, 273 Amazon deforestation, 228–29 American Electric Power Company, 223, 296 Analamazaotra Special Reserve (Madagascar), 206–08 Andasibe Reserve (Madagascar), 206–08 Ankeneny-Zahamena-Mantadia Biodiversity Conservation Corridor and Restoration Project (Madagascar), 206–08 Annex I Parties: and CDM, 74; and incentives, 52; and JI rules, 73; and Kyoto Protocol, 71; and leakage, 51; and LULUCF projects, 35, 40, 163; and REDD incentives, 244; and temporary credits, 76 AOSIS See Alliance of Small Island States APC (Accountable preserved carbon), 198 Applied Energy Services Corporation, 292, 296 AR See Afforestation and reforestation (AR) projects AR Working Group, 80 Area triggers, 244 Argentina, 168, 211 Asner, G P., 228 Assigned Amount Units (AAUs), 73, 172, 173, 229 Australia: cap-and-trade system in, 22; and Garnaut Review, 255, 256, 258; index legislation in, 167, 253–66; and LULUCF projects, 36, 212; and REDD projects, 314; and voluntary carbon markets, 317 See also New South Wales Greenhouse Gas Abatement Scheme (NSW Scheme) Barclays Capital, 303 Baselines: and CDM projects, 116; and compensated reductions, 232; establishment of, 76–78, 141–42; international framework for, 9; and LULUCF projects, 38; and REDD incentives, 243, 246 Bayon, Ricardo, 292–307 Belize, 219 Below-ground biomass, 91, 139 BioCarbon Fund (World Bank), 208, 297 BioClimate Research and Development (BRandD), 301 Biodiesel, 94–96 Biodiversity: and AR projects, 88; and deforestation, 180, 237; and forest degradation, 185; and land conservation, 278; in Latin America, 213; in Madagascar, 207; and Van Eck Forest Management Program, 291; and voluntary carbon markets, 297 Bioenergy, 89–103; emissions from, 93–94; GHG benefits of, 89–97; and Kyoto Protocol, 97–101; and liquid biofuels, 94–96; plantations for, 97, 99–100; production vs carbon sequestration, 91–93; renewability of, 90–91 Bird, David Neil, 89–103 BlueRegistry, 304 Bolivia: agricultural expansion in, 216; forest resources in, 213; and LULUCF negotiations, 211, 212; Noel Kempff Climate Action Project in, 223–26; and REDD financing, 296 Bosque Sustentable, 295, 325–27 BP America, 223, 296, 301, 320 Brand, David, 311–24 index BRandD (BioClimate Research and Development), 301 Brazil: AES-Tiete project in, 67; agricultural expansion in, 216; and biofuels, 95, 96; deforestation in, 23, 180; forest resources in, 213; and LULUCF projects, 36, 211, 212; REDD accounting mechanism in, 198–201, 204; road construction in, 217 Brown, Sandra, 135–47 Business-as-usual baseline, 77 California: climate regulatory regime in, 22; Energy Commission, 285; Forest Practice Rules, 290; Forest Protocols, 285–86; Global Warming Solutions Act of 2006, 286 California Climate Action Registry (CCAR), 284–86, 289, 302, 314, 318 Canada, 36, 39, 212 CAPA (Clean Air Planning Act, U.S.), 280 Capacity-building, 87, 118, 310 Cap-and-trade approach, 9, 256, 279 Carbon Banc, 267 Carbon farming, 53, 269 Carbon markets: and CDM project design, 114–15; commercialization of, 243; and forestry, 7–8; and LULUCF projects, 131–33; project-based mechanisms for, 135–47; and REDD projects, 185–86; regulation of, 20–21, 22; risks and criticisms of, 43–58; transaction volume in, 239 See also Voluntary carbon markets Carbon offset markets See Voluntary carbon markets Carbon plantations See Carbon farming Carbon pooling: in Australia, 261, 265–66; in New Zealand, 269–70; and permanence risk management, 132, 175; and voluntary carbon markets, 318, 322 Carbon preserving factors (CPFs), 197–98 Carbon property rights: in Australia, 255, 262; legal title to, 164–71 Carbon retailers, 320–21 335 Carbon Rights Legislation Amendment Act 1998 (NSW), 262 Carbon sequestration and bioenergy production, 91–93 Carbon stocks: and deforestation emissions, 24; estimation of, 139–40, 316; monitoring of, 138–41; REDD measurement of, 196–97; trends in, 218–19 Carbon verification standards, 297–305; California Climate Action Registry Protocols, 302; Climate, Community, and Biodiversity Standards, 301; Gold Standard, 302; Green-E Greenhouse Gas Product Standard, 304; Greenhouse Friendly Initiative, 304; ISO 14064, 302–03; Plan Vivo, 301; Social Carbon, 303; VER+ Standard, 304; Voluntary Carbon Offset Standard, 303; Voluntary Carbon Standard, 187, 247, 300–01; WBCSD/WRI GHG Protocol, 300 Carbon-neutral products, 293 Caribbean region, 216 Carper, Tom, 280 Case studies: community-based carbon forestry, 308–10; creative financing, 206–08; Humbo Community-Based Natural Regeneration Project, 86–88; Noel Kempff Climate Action Project, 223–26; San Nicolás project, 122–24; Sierra Gorda Biosphere Reserve, 325–27; Van Eck Forest Management Project, 289–91; West Coast Development Trust, 272–74 CATIE See Centro Agronómico Tropical de Investigación y Ensanza CCAR See California Climate Action Registry CCB See Climate, Community, and Biodiversity Standards CCBA See Climate Community and Biodiversity Alliance CCX See Chicago Climate Exchange CDM See Clean Development Mechanism 336 Center for Clean Air Policy, 186 Centre for International Forestry Research (CIFOR, Indonesia), 301 Centro Agronómico Tropical de Investigación y Ensanza (CATIE), 211, 301 CERs See Certified Emission Reductions Certification Protocol (CP), 284–85 Certified Emission Reductions (CERs): and Annex I Parties, 74; and AR projects, 47–48; and biofuels, 101; and CDM projects, 110; in Chile, 148, 151, 154–55; and LULUCF credits, 163–64; negotiations on, 212; pricing of, 126–27; as replacement for lCER, 173; and voluntary carbon markets, 295 See also Long-term Certified Emission Reductions (lCers); Temporary Certified Emission Reductions (tCers) Certified Tradable Offsets, 68 Charismatic carbon, 296–97 Chicago Climate Exchange (CCX), 21, 224, 293, 300, 312, 318 Chile: CDM AR projects in, 156–57; CERs in, 154–55; environmental regulation in, 153; institutional and regulatory background in, 149–53; landownership in, 150–53; legal requirements for CDM AR projects in, 155–56; and LULUCF negotiations, 211, 212; sequestration rights in, 148–62 China, 211 Chocó-Manabí Conservation Corridor (Ecuador), 66 Chomitz, K., 131–32 CIBABA (Organization of Indigenous Communities in Bajo Paraguá), 223 CIFOR (Centre for International Forestry Research, Indonesia), 301 Citigroup, 303 Civil unrest and deforestation, 217 Clark, Helen, 267 Claro, Edmundo, 148–62 Clean Air Planning Act (CAPA, U.S.), 280 index Clean Development Mechanism (CDM): and additionality, 76–78, 109–11, 116; and Annex I Parties, 74; and AR projects, 43–44, 56, 65–67, 72, 79–80, 88; baseline determination for, 77–78; and bioenergy, 89, 98–101; and carbon markets, 7, 20–21, 293, 294; in Chile, 148, 155–57; and climate negotiations, 6; costs of, 295, 325; cultural barriers to, 117; diversion of efforts, 44–46; and double counting, 100–01; eligibility of land for, 74–75; emission removal measurement under, 135; estimating project emissions, 144; forest conservation and, 12, 43; and leakage, 78; and LULUCF projects, 35, 71–88, 163–76; Methodology Panel (MP) of, 98, 100, 101; modalities and procedures of, 107 See also Design of CDM projects Climate Change Response Act (New Zealand), 269 Climate Community and Biodiversity Alliance (CCBA), 21, 55, 69, 112, 301 Climate, Community, and Biodiversity (CCB) Standards, 207, 301 Climate Group, 300 Climate Stewardship and Innovation Act of 2007 (CSIA, U.S.), 279 Climate Trust (U.S.), 283–84, 286 Coalition for Rainforest Nations, 181 Colombia, 211, 212, 213, 216 Commercial forestry investment, 314–15 Commodity prices, 95–96 Community gardens, 207 Community-based carbon forestry, 308–10 Community-managed land, 208, 214 Compensated reduction approach, 227–36; design of, 231–33; goals for developing countries, 230–31; and REDD in Amazon, 229–30 CONAF See Corporación Nacional Forestal (Chile) CONAMA (Chile), 153, 155, 156 Congo, 198–201 index Conservation See Forest conservation Conservation International, 66, 206, 208, 295, 301 Conservatism and measurement of carbon stocks, 136 Contract law: for LULUCF projects under CDM, 163–76; and permanence risk management, 174–75; and sequestration rights, 159 Conveyancing Act 1916 (NSW), 262 Corporación Autónoma Regional de los Rios Negro y Nare (CORNARE, Colombia), 68, 122–24 Corporación Nacional Forestal (CONAF, Chile), 149, 150, 155, 156 Corporation for the Sustainable Management of the Forests (MASBOSQUES), 124 Costa Rica: biodiversity in, 213; and climate negotiations, 6; and ecosystem services conservation, 67–68; and LULUCF negotiations, 211, 212; and property rights, 216; and REDD incentives, 238 Cost-benefit analysis of monitoring, 140–41 CO2 Australia Limited, 266 CO2 Group Limited (Australia), 266 CO2OL-USA, 301 Country Energy (NSW), 267 Couture, Stéphane, 125–34 CP (Certification Protocol), 284–85 CPFs (Carbon preserving factors), 197–98 Credit Suisse, 303 CSIA (Climate Stewardship and Innovation Act of 2007, U.S.), 279 Cultural barriers to CDM AR projects, 117 Deadwood, 91, 139, 140, 146 Deforestation: carbon markets and, 20; under CDM, 238; in developing countries, 179–80; GHG emissions from, 5, 23, 218–19; policy issues, 182–87; under UNFCCC and Kyoto Protocol, 180–82 See also Afforestation and reforestation (AR) projects 337 Deforestation Control Program (Brazil), 231 Degradation monitoring and accounting, 184–85 Delivery risk, 171 Design of CDM projects, 107–24; and additionality, 109–11; and barriers to developers, 115–18; carbon estimations for, 108–9; and carbon markets, 114–15; and legal issues, 114–15; technical issues in, 108–14 Designated National Authority (DNA), 54, 114, 155 Designated operational entities (DOEs), 137, 170 Dettmann, Paul, 86–88 Deutsche Bank, 303 Development funding, 208 Direct barter transactions, 274 DNA See Designated National Authority DOEs See Designated operational entities Dominican Republic, 211 Double baseline approach, 244–45 Double counting, 100–01 Dual market approach, 186 Dutschke, Michael, 237–49 Ebeling, Johannes, 43–58 ECCM (Edinburgh Center for Carbon Management), 301 ECIS (European Carbon Investor Services), 303 Ecologica, 303 EcoSecurities, 65 Ecosystem Marketplace, 293, 297 Ecosystem services: conservation of, 67–69; regulatory context of, 60–64; restoration of, 65–67; and Rio Conventions, 59–70 Ecuador: agricultural expansion in, 216; biodiversity in, 213; deforestation in, 219; ecosystem services restoration in, 66; and LULUCF negotiations, 211, 212; mining operations in, 217 Edinburgh Center for Carbon Management (ECCM), 301 338 EFL See Environmental Framework Law EIAS See Environmental Impact Assessment System EID See Environmental impact declaration EIS (Environmental impact study), 153 El Salvador, 219 Electric Utility Cap-and-Trade Act of 2007 (U.S.), 279 Electricity Supply Act 1995 (NSW), 259 Emission Allowance Account (U.S.), 278–79 Emission Reduction Units (ERUs), 73, 172, 173 Emission Reductions Purchase Agreements (ERPAs), 166 Emissions trading (ET): in Australia, 254, 255–58; in Chile, 154; and Kyoto Protocol, 35; in New Zealand, 268, 269–70 See also Carbon markets; European Union Energy Australia, 266 Energy Department 1605(b) program (U.S.), 280, 286 Energy Policy Act (U.S.), 95, 280 Enforcement: and market-based mechanisms, 25; and REDD incentives, 240–41; and RGGI, 283 Environmental Defense, 36 Environmental Framework Law (EFL, Chile), 153, 156 Environmental Impact Assessment System (EIAS), 153, 155, 156 Environmental impact declaration (EID), 153, 156 Environmental impact study (EIS), 153 Environmental Integrity Group, 210, 212 Environmental Qualification Resolution (Chile), 155 Equity and market-based mechanisms, 25 ERPAs (Emission Reductions Purchase Agreements), 166 ERUs See Emission Reduction Units ET See Emissions trading Ethanol, 94–96 index European Carbon Investor Services (ECIS), 303 European Union: and biofuels, 95; commercial forestry in, 315; Emissions Trading Scheme (ETS), 20, 39, 81, 188, 239, 294–95; and LULUCF projects, 36 Eva, Hugh D., 191–208 Faeth, Paul, 296 FAN See Fundación Amigos de la Naturaleza FAO See Food and Agriculture Organization Farming See Agriculture Federal Institute for Material Testing and Research (Switzerland), 122–23 Federici, Sandro, 191–208 Fehse, Jan, 59–70 Feinstein, Dianne, 279 Financing: in Latin America, 214–15, 220; in Madagascar, 206–08; and nested incentives approach, 238–40 FONAFIFO (Costa Rica), 67 Fondo Bioclimatico, 309 Food and Agriculture Organization (FAO, UN), 130, 211, 213 Force majeure clause, 174 Forest conservation: and AR projects, 79–80; and bioenergy, 91–93; diversion of efforts, 44–46; environmental and social effects of, 53–55; funding for, 214; future of, 321–22; and Kyoto Protocol, 97–101; and leakage, 49–51; marketbased mechanisms for, 11–29; and permanence, 46–49; policy mechanisms for, 12–15; project design for, 315–20; social and environmental safeguards, 79; and VERs, 313–14; and voluntary carbon markets, 311–24 Forest conversion, 194–96, 204, 215–16 See also Deforestation Forest degradation See Reduce emissions from deforestation and degradation (REDD) index Forest exploitation, 192 Forest Law of 1931 (Chile), 149 Forestry Institute (INFOR, Chile), 149 Forestry Management Plan (Chile), 155, 156 Forests Act 1949 (New Zealand), 269 Forests NSW, 265–66 FORMA project, 108–19 Forward sale agreements, 175 Fossil fuel energy, 91 Free rider problem, 13 Friends of the Earth, 36 Fuelwood plantations, 207 Fundación Amigos de la Naturaleza (FAN, Bolivia), 223, 296 Fundación Maquipucuna (Ecuador), 66 Futuro Forestal, 301 GAPC (Global accounted preserved carbon), 197–98 García-Guerrero, Andrea, 209–22 Garnaut Review, 255, 256, 258 GCA (Global conversion accounting), 197 GCB (Global conversion baseline), 197 GEF See Global Environmental Facility funding General Reporting Protocol (GRP), 284 Geographical information system (GIS), 113 Germany, 95 Ghana, 168 GIS (Geographical information system), 113 Global accounted preserved carbon (GAPC), 197–98 Global conversion accounting (GCA), 197 Global conversion baseline (GCB), 197 Global Environmental Facility (GEF) funding, 214, 239, 295 Global Forest Resources Assessment 2005 (FAO), 213 Global Mechanism–EcoSecurities Partnership, 65 Global Warming Solutions Act of 2006 (California), 286 Gold Standard, 302 339 Good Practice Guidance for Land Use, LandUse Change and Forestry (IPCC), 138, 145 Gould, Karen, 253–71 Governance gap, 240–41 Grassi, Giacomo, 191–208 Green-E Greenhouse Gas Product Standard, 304 Greenhouse Friendly initiative (Australia), 255, 257, 304, 317, 318 Greenhouse Gas Benchmark (NSW), 260 Greenhouse gases (GHG): and CDM project design, 113; deforestation emissions of, 180, 218–19; and forest conservation, 11; potential reductions for, 34; in U.S., 275 Greenpeace, 36 Greiner, Sandra, 89–103 GRILA (Latin American Initiatives Group), 210, 211 Group of Eight (G8), Group of Latin American Countries (GRULAC), 210 Group of 77 (G77), 210 GRP (General Reporting Protocol), 284 Grupo Ecológico Sierra Gorda (Mexico), 325–26 Guatemala: deforestation in, 219; and LULUCF negotiations, 211, 212; and voluntary carbon markets, 292, 296 Hamilton, Katherine, 292–307 Harvesting See Timber harvesting Hawn, Amanda, 292–307 Hervé, Dominique, 148–62 HFCs (Hydrofluorocarbons), 46 Honduras, 211, 212 HSBC Bank, 320 Humbo Community-Based Natural Regeneration Project (Ethiopia), 86–88 Hydrofluorocarbons (HFCs), 46 Hydrological services, 67 IAE (Independent accredited entity), 137 ICRAF (World Agroforestry Centre), 301 340 IETA (International Emissions Trading Association), 300 IIED (International Institute for Environment and Development), 296 Illicit crops and deforestation, 217 Incentives: in Chile, 150; for developing countries, 227–36; nested approach for, 237–49; perverse, 52–53; and REDD, 193 See also Offsets Independent accredited entity (IAE), 137 India, 211 Indigenous communities: and carbon property rights, 170–71; and deforestation, 180; in-kind contributions by, 215; and landownership in Chile, 151 Indirect emissions, 99 Indonesia: and biofuels, 95, 96; carbon property rights in, 168; commercial forestry in, 314; deforestation in, 180 INE (Instituto Nacional de Ecología, Mexico), 308 INFOR (Forestry Institute, Chile), 149 In-kind contributions, 215 Instituto Forestal (INFOR, Chile), 149 Instituto Nacional de Ecología (INE, Mexico), 308 Insurance for carbon credits, 132 Intact forests, 193–94, 202, 203 Intel, 301 Inter-annex leakage, 51 Intergovernmental Panel on Climate Change (IPCC), 37, 138, 194, 244, 248 Internal offsetting, 68 International Emissions Trading Association (IETA), 300 International Institute for Environment and Development (IIED), 296 International leakage, 51, 233 International Organization for Standardization (ISO), 302–03 International Tropical Timber Organization, 123 IPCC See Intergovernmental Panel on Climate Change index ISO 14064, 302–03 IUCN (World Conservation Union), 211 Janson-Smith, Toby, 3–10 Japan, 36, 39, 123, 212 Jatropha cultivation, 100 Joint Implementation (JI) mechanism: and Annex I Parties, 73; baseline determination for, 78; and bioenergy, 98; and carbon markets, 7, 293, 294; and climate negotiations, 6; and LULUCF projects, 35, 71–88, 163; and REDD incentives, 242 Joint Implementation Supervisory Committee (JISC), 73 Joint Liaison Group for the Rio Conventions, 26 Jung, Martina, 71–88 Katz, Rachael, 289–91 Kelly, Cathleen, 275–91 Knight, Eric, 163–76 Kyoto Protocol: adoption of, 33; and bioenergy, 89, 97–101; and deforestation, 180–82; emission removal measurement under, 135; land-use related emissions and, 3–4; and LULUCF projects, 36–37; and REDD incentives, 238, 242; and regulatory carbon markets, 20; on role of forests, Labor Party (Australia), 254 Land use, land-use change, and forestry (LULUCF) projects: additionality requirements for, 77; and carbon markets, 131–33, 294–95; under CDM and JI rules, 35, 71–88, 163–76; and credit title issues, 164–71; current situation for, 39; evolution of current agreement, 36–38; future of, 40–41; history and context of, 33–42; Latin American role in negotiations for, 209–22; legal issues for, 163–76; origin and nature of agreement, 34–36; and index regulatory carbon markets, 20; significance of, 34 Land-based offsets, 276–78 Landell-Mills, N., 65 Landownership: and carbon property rights, 164–71; in Chile, 150–53; and community-managed land, 208; and market-based mechanisms, 25; in Mexico, 326; and tenure regulations, 216 Landscape-scale projects, 208 Latin America: commercial forestry in, 315; deforestation in, 12, 215–18; forest sector in, 213–18; and LULUCF negotiations, 209–22; negotiating groups in, 210–11; protected areas in, 213–15 See also specific countries Latin American Initiatives Group (GRILA), 210, 211 lCERs See Long-term Certified Emission Reductions Leakage: and AR projects, 49–51; and biomass production, 93–94; and carbon markets, 44; and CDM projects, 78; and compensated reductions, 231–33; domestic vs international, 182–83; and forest conversion, 196; and LULUCF projects, 38; monitoring of, 142–44; and REDD projects, 182–83, 193, 224–25, 243, 246, 247 Lease rights, 153 Lecocq, Franck, 125–34 Legal framework: for AR projects, 88; for CDM projects, 114–15, 116, 117; in Chile, 149–53; for ecosystem services, 60–64; under host country law, 165–70; for LULUCF projects under CDM, 163–76; and market-based mechanisms, 25; and permanence risk liability, 171–75; and title to sequestered carbon, 164–71; in U.S., 278–80 Letter of Approval (LOA), 114 Lieberman, Joe, 278 Lieberman-Warner America’s Climate Security Act of 2007 (U.S.), 278–79 341 Litter, biomass, 91, 139 Locatelli, Bruno, 107–24 Long-term Certified Emission Reductions (lCers): and CDM projects, 110; economic analysis of, 125–34; legal title to, 169; and LULUCF CDM projects, 38, 75–76, 81–82, 164; permanence risks in, 172–73; pooling of, 132–33; pricing of, 127–29; replacement obligations for, 173, 174–75; and sixtyyear maximum duration, 129 LULUCF See Land use, land-use change, and forestry (LULUCF) projects Madagascar, 206–08 Malaysia, 95, 96, 314 Mallee eucalypts, 266 Mangerivola Special Reserve (Madagascar), 206–08 Mantadia National Park (Madagascar), 206–08 Market flooding, 44–46, 186, 231 Market leakage, 50–51 Market-based mechanisms, 11–29; current opportunities for, 15, 20–22; failure of, 13; and leakage, 144; potential opportunities for, 22–24; system requirements for, 24–25 See also Carbon markets Marrakech Accords, 67 MASBOSQUES (Corporation for the Sustainable Management of the Forests), 124 McKnight, Jennifer, 275–91 Measurement See Accounting Meizlish, Marisa, 311–24 Methodology Panel (CDM Executive Board), 98, 100, 101 Mexico: carbon sequestration in, 325–27; community-based carbon forestry in, 308–10; deforestation in, 219; forest resources in, 213; and LULUCF negotiations, 210, 211, 212 MikroTek, 156 342 Millennium Ecosystem Assessment, 179 Miller, Monique, 163–76, 253–71 Mining, 152, 159, 217 Ministry for Housing and Urban Development (Chile), 150 Ministry of Agricultural and Rural Development (Ethiopia), 86 Ministry of Agriculture (Chile), 149, 150 Ministry of Economics (Chile), 149 Ministry of Health (Chile), 154 Ministry of National Assets (Chile), 150, 152 Model Rule (RGGI), 281–82 Molitor, Michael, 294 Mollicone, Danilo, 191–208 Monitoring: and California Forest Protocols, 285–86; and CDM project design, 116; and Climate Trust, 284; of deforestation, 182–84; of degradation, 184–85; elements of, 137–44; error reduction in, 144–46; of leakage, 142–44; and market-based mechanisms, 25; at national level, 182–84, 187, 225, 241–45; of project and strata areas, 138–39; project-based mechanisms for, 135–47; return on investment in, 140–41; and RGGI, 282–83 Morgan Stanley, 303 Mosley, Max, 309 Moutinho, Paulo, 227–36 Murdock, Sarah Woodhouse, 275–91 National accountable preserved carbon (NAPC), 198, 200, 204 National conversion accounting (NCA), 197 National conversion baseline (NCB), 197 National emissions trading scheme (NETS, Australia), 255–58 National Forestry Corporation (Chile), 149, 150, 155, 156 Nationale des ForÍts, 211 Native Forest Law (Chile), 149–50, 160 Nature Conservancy, 36, 223, 295, 301 NCA (National conversion accounting), 197 index NCB (National conversion baseline), 197 Nested incentives approach, 237–49; and exclusively national-level accounting, 241–43; and financing gap, 238–40; and governance gap, 240–41; and REDD mechanism proposal, 243–47 New Carbon Finance, 293, 297 New South Wales Greenhouse Gas Abatement Scheme (NSW Scheme): abatement certificate provider for, 261–62; and carbon pooling, 261; and carbon property rights, 262; eligibility criteria, 260–61; forest sinks under, 255, 256, 258–67; and permanence risk, 173–74; and voluntary carbon markets, 317, 318 New Zealand: carbon property rights legislation in, 167; legislative approaches in, 267–70; and LULUCF projects, 36, 212; and West Coast Development Trust, 272–74 NFC project (Uganda), 69 Nicaragua, 211, 212, 219 Nir, Edward, 191–208 Nitrous oxide (N2O), 46 Noel Kempff Climate Action Project (NKCAP), 223–26, 296 Non-intact forests, 194, 202, 203 Nonpermanence See Permanence risk Nontree biomass, 139 Northeast Regional Greenhouse Gas Initiative (RGGI), 281–83, 286 Norway, 20, 212 NSW See New South Wales Greenhouse Gas Abatement Scheme NZ Units (NZUs), 270 Official development aid (ODA), 214 Offsets: Certified Tradable Offsets, 68; in climate legislation, 276–78; market role of, 287; retail markets for, 292–93; in RGGI, 281 Oil palms, 95, 96, 314 Oregon, 283–84 index Organization for Economic Cooperation and Development (OECD), 210 Organization of Indigenous Communities in Bajo Paraguá (CIBABA), 223 Organizational capacity, 118 O’Sullivan, Robert, 3–10, 179–90 Over-the-counter (OTC) voluntary carbon markets, 292–93 Pacific Forest Trust (U.S), 289–91 Pacific Gas and Electric, 302 PacifiCorp, 223, 296 Panama, 211, 219 Pandya, Sonal, 206–08 Papua New Guinea: assigning carbon stocks in, 196–97; and climate negotiations, 6, 212; REDD projects in, 198–201, 238 Paraguay, 211, 212, 216 Partnerships, 206–08 Passero, Michelle, 289–91 PDD See Project Design Document Pearson, Timothy, 135–47 Pedroni, Lucio, 107–24, 237–49 Pelangi Indonesia, 301 Pennypacker, Laura Ledwith, 11–29 Permanence risk: and Australian emissions trading scheme, 256; and California Forest Protocols, 285; and carbon markets, 44, 46–49; and CDM project design, 117; and climate negotiations, 6; and Climate Trust, 284; and compensated reductions, 233–34; economic analysis of, 125–34; estimation of, 130–31; and forestry project design, 318, 319, 321–22; legal issues of, 171–75; and LULUCF projects, 37–38, 75–76; management of, 174–75; in New Zealand, 270; and NSW Scheme, 263; and REDD credits, 186–87; and RGGI, 282 Permanent Forest Sink Initiative (PFSI, New Zealand), 167, 268–69, 318 Peru, 211, 212, 213, 217 Pew Center on Climate Change, 276 343 Philanthropy, 208, 214 Philippines, 168 PIN See Project Idea Note Plan Vivo, 301, 309 Porras, I., 65 Porrua, Manuel Estrada, 209–22, 237–49 Portela, Rosimeiry, 11–29 Positive leakage, 78 Poverty alleviation and AR projects, 59, 88, 213, 215 Precision and measurement of carbon stocks, 136–37, 144–46 Prime Ministerial Task Group on Emissions Trading (Australia), 254, 256 Private capital investments, 9, 239, 242 Project Design Document (PDD), 107–09, 112–14 Project Idea Note (PIN), 108, 113 Project management, 88 Project-based accounting, 72, 135–47, 182–84 Property rights See Landownership Protocol for Project Accounting (WBCSD/WRI), 300 Public funding, Public lands, 152 Quality assurance and quality control (QA-QC) plan, 145 Quantified Emission Limitations or Reduction Commitments (QELRCs), 34–37 Randrianarisoa, Jeannicq, 206–08 Rapeseed, 95 Reduce emissions from deforestation and degradation (REDD): accounting mechanism for, 191–208; and carbon markets, 22–24, 187; and forest conversion, 194–96; and international framework, 8–9; Kyoto Protocol incentives for, 181; measurement system for, 193–201; monitoring and accounting of, 182–85; and nested 344 incentives approach, 243–47; and VERs, 313 Reduced conversion rate (RCR), 197, 198, 200 Regional Forum (Colombia), 123 Regional Greenhouse Gas Initiative See Northeast Regional Greenhouse Gas Initiative (RGGI) Regulatory framework See Legal framework Removal Units (RMUs), 73, 76, 173 Renewable resources See Bioenergy Replacement obligations for tCERs and lCERs, 172–73, 174–75 Return on investment in monitoring, 140–41 RGGI See Northeast Regional Greenhouse Gas Initiative Rio Conventions, 59–70, 203 See also UN Convention on Biological Diversity; UN Convention to Combat Desertification Risk management and NSW Scheme, 264 RMUs See Removal Units Road construction and deforestation, 217 Robledo, Carmenza, 122–24 Ross, David Patrick, 325–27 Ruiz Corzo, Martha, 295, 327 Russia, 39 Salinas, Zenia, 107–24 Sampling and measurement of carbon stocks, 136, 145–46 San Nicolás project (Colombia), 68, 122–24 SBSTA (Subsidiary Body for Scientific and Technical Advice, UNFCCC), 181 Schlamadinger, Bernhard, 89–103 Scholz, Sebastian M., 71–88 Schröder, Martin, 304 Schulze, Ernst-Detlef, 191–208 Schwartzman, Stephan, 227–36 Schwarzenegger, Arnold, 286, 314 Seifert-Granzin, Jörg, 223–26 Sequestration rights, 148–62, 164–71 See also Landownership Settelmyer, Scott, 89–103 index SGS Ltd U.K., 223 Sierra Gorda Biosphere Reserve (Mexico), 295, 325–27 Sinks: and Australian projects, 253–66; and climate negotiations, 71–72; and New Zealand projects, 267–70; role of, 33–34; in U.S., 276 Skeele, Rebecca, 275–91 Slash-and-burn practices, 216, 224 Small-scale AR projects, 79–80 Social Carbon, 303 Social effects, 53–55, 111–12 Soil: as biomass, 91, 139; quality, 88, 180 Solid biomass fuels, 89 Sourcebook for Land Use, Land-Use Change and Forestry Projects (World Bank), 138, 145 South Africa, 315 Soybeans, 95, 96 Spillover effects, 78 “State and Trends of the Carbon Market 2007” (World Bank), 293 Stern, Nicholas, 3–4 Stern Review, 185, 239, 240 Stibig, Hans-Jürgen, 191–208 Stock pollutants, 49 Streck, Charlotte, 3–10, 237–49 Sub-national monitoring and accounting, 182–84, 246–47 Subsidiary Body for Scientific and Technical Advice (SBSTA, UNFCCC), 181 Sustainable forests, 54, 207, 297, 321 Switzerland, 123 Tarasofsky, Richard, 3–10 Technical capacity, 118 Temporary Certified Emission Reductions (tCers): and AR projects, 47–48; economic analysis of, 125–34; legal title to, 169; and LULUCF CDM projects, 38, 75–76, 81–82, 110, 164; permanence risks in, 38, 172–73; pooling of, 132–33; price of, 126–27; replacement obligations for, 172, index 174–75; and sixty-year maximum duration, 129 Timber harvesting: conservation vs., 93; displacement of, 246; in New Zealand, 269, 273; reductions of, 314; and Van Eck Forest Management Program, 291; and voluntary carbon markets, 314–15 Tipper, Richard, 308–10 Tobón, Patricia, 122–24 Tofu, Assefa, 86–88 Tradable Emission Permits Law (Chile), 154 Tree biomass, 139 Trines, Eveline, 33–42 TÜV SÜD, 304 UN Convention on Biological Diversity, 8, 14, 59–70, 170 UN Convention to Combat Desertification, 8, 14, 59–70 UN Development Program (UNDP), 295 UN Environment Program (UNEP), 211 UN Foundation, 325, 327 UN Framework Convention on Climate Change (UNFCCC): Activity Implemented Jointly program of, 223; and carbon markets, 20; and deforestation, 180–82; and eligibility of land for CDM projects, 74–75; and legal title to carbon property rights, 165; and LULUCF projects, 34–35, 81, 209–22; and permanence risk, 172; and REDD projects, 22–24, 192, 193, 238, 240, 314; reporting requirements under, 201–03; on role of forests, 5; and Subsidiary Body for Scientific and Technical Advice, 181 See also Kyoto Protocol UN Millennium Declaration, 59 Union of Concerned Scientists, 36 United States: and biofuels, 95; commercial forestry in, 315; federal climate legislation in, 278–80; Kyoto Protocol and, 39; land conservation and restoration in, 275–91; and LULUCF 345 projects, 36, 212; regional and state climate programs in, 281–86; Regional Greenhouse Gas Initiative, 20; and San Nicolás project, 123; voluntary reporting of GHG emissions in, 280 Upstream emissions, 98–100 Uruguay, 211, 212 U.S Agency for International Development, 208 Usufruct rights, 152–53 Van Eck Forest Management Project (U.S.), 289–91 Vehicle use leakage, 143 Venezuela, 213, 217 VER+ Standard, 304 Verified Emission Reductions (VERs), 302, 312, 313, 316 Vitale, Ben, 206–8 Vohimana Forest (Madagascar), 206–8 Voluntary carbon markets, 292–307; buyers in, 320–21; and carbon verification standards, 297–305; and charismatic carbon, 296–97; consolidation of, 321; current status of, 293–94; developing forestry projects for, 311–24; flexibility of, 294–96; transaction volume of, 239 Voluntary Carbon Offset Standard, 303 Voluntary Carbon Standard (VCS), 187, 247, 300–01 Voluntary emission reductions (VERs), 224 Walker, Sarah, 135–47 Warner, John, 278 Water quality, 88, 237, 278 Wayburn, Laurie, 289–91 WBCSD (World Business Council for Sustainable Development), 300 Wendland, Kelly J., 11–29 West Coast Development Trust (New Zealand), 272–74 West Coast Forests Campaign (New Zealand), 272 Weyerhaeuser, 301 346 Wilder, Martijn, 163–76, 253–71 Wildfires, 130–31 Wind damage, 131 Winrock International, 224 Woodrising Consulting, Inc., 295, 327 World Agroforestry Centre (ICRAF), 301 World Bank: BioCarbon Fund, 86, 124, 208, 297; on carbon stock measurement, 138; on forest governance, 240–41; and REDD projects, 314; on voluntary carbon markets, 293–94 index World Business Council for Sustainable Development (WBCSD), 300 World Conservation Union (IUCN), 211 World Economic Forum, 300 World Resources Institute (WRI), 300 World Vision Ethiopia and Australia, 86 World Wildlife Fund, 36, 302 Zahamena National Park (Madagascar), 206–08 .. .climate change and forests climate change and forests Emerging Policy and Market Opportunities Charlotte Streck, Robert O’Sullivan, Toby Janson-Smith, and Richard Tarasofsky... Creative Financing and Multisector Partners in Madagascar Jeannicq Randrianarisoa, Ben Vitale, and Sonal Pandya 206 15 A Latin American Perspective on Land Use, Land-Use Change, and Forestry Negotiations... Cataloging-in-Publication data Climate change and forests : emerging policy and market opportunities / Charlotte Streck [et al.], editors p cm Summary: “Frames forestry activities within climate- change policy