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Reducing Emissions from Deforestation in Developing CountriesCOP-11 Agenda Item #6: 

Reducing Emissions from Deforestation in Developing Countries COP-11 Agenda Item #6 the katoomba group São Paulo, Brazil October 4, 2006 www.RainforestCoalition.org

Papua New Guinea : 

Papua New Guinea

Climate Objective: 

Climate Objective Carbon-Neutral while fulfilling our social and economic priorities. Land Use: Net rates of deforestation must be slowed, halted and reversed – Costa Rica, China Transportation: Replace carbon intense fossil fuels with clean-burning technology and renewable bio-fuels – Brazil, Holland. Energy: Sufficient hydro potential and natural gas to fuel our economic growth aspirations. Environmentally and Socially Sustainable Economic Growth

Problem: 

Problem UNFCCC and KP: No Meaningful Solutions Deforestation: No incentive to Reduce Emissions from deforestation Transportation: No real incentive for National transition to clean and renewable fuels in transportation Energy: CDM offers too much red-tape and low carbon prices to facilitate energy shifts at small scale.

Emission Sources: 

Emission Sources

Obstacles: 

Obstacles

Deforestation Drivers: 

Deforestation Drivers Agriculture: Soya, Coffee, Cocoa, Sugar, etc. Logging: Low value exports, unsustainable practices. Development: Roads, power-lines, social services, etc. Population: Urbanization + growth drives above. Perverse Incentives!

Rainforest Coalition: 

Rainforest Coalition Bolivia Central African Rep. Chile Congo Costa Rica DR Congo Dominican Republic Fiji Gabon Guatemala Nicaragua Panama Papua New Guinea Solomon Islands Vanuatu

Rainforest Coalition: 

Rainforest Coalition Interregional Policy Development & Consensus CfRN

COP-11 Agenda #6: Summary: 

COP-11 Agenda #6: Summary Deforestation: Real Threat to Climate Stability Emissions: Resulting Emissions are Significant Policy & Incentives: Seek flexible basket of ‘voluntary’ instruments to accommodate national situations. Market forces drive most deforestation and Emissions Markets may hold key to solution. Process: Parties refer to SBSTA with goal to reach recommendations by 2007

Climate Change: Multilateral Cooperation: 

Climate Change: Multilateral Cooperation Common but Differentiated Responsibilities Industrial to Developing: Maintain philosophy of mandatory reductions that finance voluntary instruments by developing nations. Support Sustainable Development. Amongst Developing: Immense difference between developing countries. Need flexible ‘basket’ of voluntary emissions reduction instruments – in present form, CDM alone is not enough. North to South Flexible Basket of Positive Incentives

COP-11 Agenda #6: Positive Incentives: 

COP-11 Agenda #6: Positive Incentives Flexible Basket of Voluntary Incentive (Diversity of National Circumstance) Official Development Assistance Approach (ODA) Voluntary National Approach (Voluntary ‘Annex C’?) Flexible Scale Approach – National Circumstance Aggregate under UNFCCC: Bilateral and/or Multilateral Funds and Emissions Trading Agreements Optional Protocol within UNFCCC Voluntary Multi-Staged Not Mutually Exclusive

The Brazil Proposal:General Observations: 

The Brazil Proposal: General Observations Support Objective Voluntary National Base Scenario Credit / Debit System Questions Demand Pricing Logic ODA – cash flow stability

COP-11 Agenda #6: Price vs. Objectives: 

COP-11 Agenda #6: Price vs. Objectives CER Positioned as ‘cheap’ mechanism Carries ‘performance’ risk – buyer must replace credit Lower ‘atmospheric value’ – supplemental credit AAU/ERU National Fixed targets Minimal transactional risk Higher ‘atmospheric value’ REDD (Annex C?) Voluntary Reductions National Scale Performance Risk minimized High ‘atmospheric value’ Higher ‘Social value’ Organic or Fair Trade Price Atmospheric & Social Objectives

COP-11 Agenda #6: Value → Social Benefit: 

COP-11 Agenda #6: Value → Social Benefit Significant source of carbon emissions currently outside frameworks. Increases the flexibility of developing countries through a ‘national’ approach. Significant new revenue streams to addresses poverty in rural areas with clear metrics to access effectiveness. Underpins MDG objectives related to environment, poverty, gender equality, health, etc. Major biodiversity conservation benefits Supports efforts against desertification and soil erosion Leads to watershed protection and potable water supply

COP-11 Agenda #6: Additional: Deeper Cuts: 

COP-11 Agenda #6: Additional: Deeper Cuts  AAU --- JI --- CDM   AAU --- JI --- CDM  KP1 (- 6%) KP2 (- 10%?) + REDD - 5%? REDD + Additional New Total: -15%? NEW CREDITS = DEEPER CUTS

Key Messages: 

Drivers: Leading drivers are identifiable. Must overcome perverse incentives and opportunity costs of alternative land uses -- both locally and internationally. In most cases, higher carbon ‘incentives’ will drive greater emissions reductions from deforestation. Solution Possible: Technology, methods and markets available now to accurately measure changes in carbon stocks and trade relevant credits at a National scale. Challenge is implementation (standards, policy, etc.) Key Messages

Key Messages: 

Policy & Incentives: Diversity of ‘national circumstances’ justifies a flexible set of positive incentives -- ODA may be important to get started quickly, but markets are likely the best sustainable finance solution. Future: Deforestation must feature prominently in future climate stability actions. Continue cross-regional consensus -- Bolivia, Central African Republic, Congo, Costa Rica, Dominican Republic, DR Congo, Gabon, Ghana, Guatemala, Honduras, Indonesia, Kenya, Lesotho, Nicaragua, Panama, Peru, Papua New Guinea. International funding needed immediately for analysis, capacity building, & pilot market activities. Key Messages