Panama

Panama proposes a flexible two-track REDD+ mechanism that would aim to  accommodate the multiple activities contemplated under REDD.

Track 1, would establish a compliance market that would allow emissions  reductions from REDD activities to be sold in international markets and  used by Annex 1 countries to meet their own emissions reductions targets.  Acceptable activities under Track 1 would be those in which a differential  in emissions or carbon stock could be measured such as reductions of  emissions from deforestation and forest degradation as well as increases in  forest carbon stocks.

Track 2 would be financed through funds and would support capacity  building and fund conservation efforts and sustainable forest management.  Activities to reduce emissions from deforestation and forest degradation  could also be financed through funds depending on host countries’  preferences. Developed countries Parties would pledge a percentage of  auctioned national emissions trading allowances or a percentage of AAUs  auctioned on the international market to generate stable and sufficient  source of replenishment for a REDD fund.

Reference scenarios on GHG emissions from deforestation should take into  account historical trends and must ensure that countries with traditionally  low deforestation rates are not at a disadvantage and that countries with  historical high rate of deforestation are not rewarded. A possible  mechanism to ensure fairness is to use the global deforestation baseline  for the developing world as a reference.