How Do They Compare?
SCOPE
What the proposals include This diagram shows the proposed scope of the various governmental and non-governmental proposals. Proposals have either chosen to include emissions from deforestation (RED), deforestation and degradation (REDD), or deforestation, degradation and enhancement (REDD+). Proposals have been grouped into non-governmental, developed and developing country proposals.
* Supported by Latin American countries including Chile, Peru and Panama on behalf of Costa Rica, El Salvador, Honduras, Nicaragua and Panama. Larger boxes denote submissions made on behalf of a number of countries.
SCOPE: Conclusions
There is an overwhelming consensus that a future mechanism for REDD should include both deforestation and forest degradation. An increasing number of proposals also explicitly emphasise that carbon enhancement activities should be considered alongside activities that reduce emissions. Although deforestation and degradation are the immediate priorities, there is widespread recognition that a future REDD mechanism could have a staggered approach, that phases in degradation and/or enhancement activities at later stages. The rationale behind this approach is mainly practical for reasons including: the political feasibility of negotiations under the UNFCCC with a simpler scope; and the need for developing countries to build capacity in carbon accounting practices. Likewise, some proposals indicate that REDD should be incorporated in a broader AFOLU approach that includes other land use and land use change including agriculture, but again via a staggered approach for practical reasons. There is agreement that only developing countries can participate in REDD, and participation should be on a voluntary basis only.
REFERENCE LEVEL
The scale of reference levels
The diagram opposite shows whether proposals specify a reference level at the sub-national, national or global scale. Some proposals use multiple reference levels and are shown here on the line between two options.
* Supported by Latin American countries including Chile, Peru and Panama on behalf of Costa Rica, El Salvador, Honduras, Nicaragua and Panama. Larger boxes denote submissions made on behalf of a number of countries.
The reference period chosen by proposals
The following diagram shows the choice of reference period specified by the proposals. Proposals specify either a historical, historical adjusted or projected reference level. The proposals by CATIE and Indonesia use two reference periods and are shown twice in this diagram.
Evolution of thinking from 2005 – 2008
National The following diagram shows the evolution of the reference level methodology specified in nongovernmental proposals. Some key milestones in the development of ideas have been highlighted. Proposals that use two scales, i.e. both a sub-national and national reference level, are located on the line dividing two groups. The coloured arrows denote the evolution of different lines of thinking.
REFERENCE LEVEL: Conclusions
Scale
There is a strong consensus that reference levels should be at the national scale, with only a few proposals supporting sub-national or global reference levels.
Sub-national reference levels are used for several reasons:
• To allow developing countries who do not have the capacity to create national carbon accounting mechanisms to participate at some level in REDD;
• To provide an incentive for both project level and national level activities, as proposed in the “nested approach”;
• As a transitional mechanism in which a country may start with a sub-national reference level, and move to a national reference level in the long term.
Global reference levels have been proposed to address concerns over international leakage and to allow for a distribution of benefits to historically low deforesting countries.
Reference Period
The majority of non-governmental proposals and some governmental proposals (Brazil, India, Indonesia) use reference levels based on historical emissions. Historical reference levels are chosen for the following reasons:
• To demonstrate “actual” reductions relative to past emissions from deforestation;
• As the simplest methodology for calculating emissions reductions.
There is a strong consensus among governmental proposals to use either historical reference levels with a development adjustment factor (DAF) (AOSIS, Canada, CfRN, Colombia, COMIFAC, EU, Japan, Malaysia, Mexico, Norway, Panama) or a projected reference level (Australia, Indonesia). The difference between historical adjusted and projected reference levels is mainly methodological as both are aiming to anticipate future changes in deforestation patterns.
Joanneum propose an upper and lower limit on reference-levels in conjunction with either discounting or banking of REDD credits to address inter-annual variability and business as usual activities.
IDDRI is a unique case; instead of using a projected or historical baseline it proposes to establish efforts by analysing the current causes of deforestation given national socioeconomic circumstances.
CATIE is an interesting proposal as it specifies a projected, forwardlooking baseline for sub-national activities (in line with current CDM A/R methodologies), but uses a historical baseline for national-level activities (in line with the majority of proposals).
Indonesia also uses dual baselines; these are not, however, related to the scale at which the activities are measured and both operate at the national level. National historical rates are proposed for unplanned emissions and a national projected rate for planned activities.
DISTRIBUTION
Proposals with explicit distribution mechanisms
The diagram opposite shows the proposals that explicitly define a distribution mechanism to create positive incentives for the conservation of standing carbon stocks.
There are inherent distributional implications within REDD for countries with high forest cover and low rates of deforestation (HFLD) (see Box 1). Some proposals, in an attempt to address equity and leakage concerns for HFLD countries propose a distribution mechanism.
Proposals can either specify a redistribution of existing revenues or an additional funding mechanism (often referred to as a stabilisation fund).
The proposals by COMIFAC and JRC use both a redistribution and additional funding and are therefore located on the line between two distribution mechanisms.
* Supported by Latin American countries including Chile, Peru and Panama on behalf of Costa Rica, El Salvador, Honduras, Nicaragua and Panama. Larger boxes denote submissions made on behalf of a number of countries.
DISTRIBUTION: Conclusions
Generally, distribution implications are implicit in the reference level methodology: Most countries don’t suggest any further redistribution of benefits (and New Zealand is strongly against it). The outcome of this is that the majority of proposals would reward historically high emitters and exclude low emitters.
Six proposals (COMIFAC, CSERGE, Greenpeace, TNC, JRC and WHRC) explicitly specify a distribution mechanism that redistributes funds from the revenues generated from emissions reductions to HFLD countries (that would otherwise not benefit from REDD). The distribution mechanisms follow two basic methodologies:
• A global historical baseline is used to allocate a proportion of benefits to countries other than those generating emissions reductions (CSERGE, JRC);
• A fixed portion of revenues are withheld from countries generating emissions reductions and redistributed to countries with carbon stocks (COMIFAC, TNC, WHRC)
Some proposals (AOSIS, CFRN, Colombia, COMIFAC, EDF, HSI, India, Mexico, Panama) support a stabilisation fund that would use a revenue stream that is separate from the financing of emissions reductions to support conservation activities.
TNC propose that revenues withheld using a stabilisation mechanism could also be held in a buffer to address permanence issues.
Both COMIFAC and TNC propose that a redistribution of revenues from emissions reductions to reward carbon stocks could be supported by a stabilisation fund.
FINANCING
The choice of financial mechanism of the proposals
The diagram opposite shows whether proposals choose to use a market, fund or market-linked mechanism to finance the full scale implementation of REDD activities. Proposals that support a phased approach are also indicated.
* Supported by Latin American countries including Chile, Peru and Panama on behalf of Costa Rica, El Salvador, Honduras, Nicaragua and Panama. Larger boxes denote submissions made on behalf of a number of countries.
FINANCING: Conclusions
The majority of proposals specify that a phased approach is required that uses different sources of financing for different aspects of REDD on appropriate time-scales (This idea is discussed further on page 96).
• Funds are considered to be more appropriate for capacity building and demonstration activities.
• Market-linked approaches, such as the auctioning of allowances can be used to scale up the implementation of REDD activities.
• Markets and market linked approaches are often recognised as providing more consistent and greater scale for the long term financing of emissions reductions.
There is a growing consensus that either a market or a market-linked approach will be used to incentivise emissions reductions under a REDD mechanism.
Market-linked approaches can use revenues generated through the auctioning of allowances. In an auctioning process, emissions reductions from REDD would be additional to existing developed country commitments. The percentage of allowances and scale of auctions (national, multinational, international) could be agreed by the COP.
Dual-markets could use emissions reductions from REDD to meet existing Annex I commitments (CCAP) or could require that emissions reductions are additional to existing targets (Greenpeace). Both of these approaches would require that is that emissions reductions from REDD are not fungible with other emissions reductions.
Several proposals do not specify a financing mechanism, stating that both funds and markets could be used to finance emissions reductions.