REDD+ is an effective and lowest cost initiative that aims to combat climate change and its effect on agriculture and the environment. By making forests more valuable standing than cut down, REDD+ aims to provide forest communities and countries with a model for economic development where both people and the planet can benefit.
In 2013, the Intergovernmental Panel on Climate Change estimated that deforestation contributed to up to 10 per cent of the carbon dioxide emissions caused by human activity.
According to a recent report by Forest Climate Analytics, there is 40 per cent more carbon stored in forested lands than in known fossil fuel deposits worldwide.
The UN Green Climate Fund agreed on a US$500mn pilot for results-based payments for REDD+ last year.
A paper by the Woods Hole Research Centre found that by stopping deforestation and allowing young secondary forests to grow back, the cumulative ‘forest sink’ could grow by over 100bn MT of carbon by 2100, about 10 times the current rate of annual global fossil fuel emissions.
The current REDD+ market framework names them Verified Emission Reductions (VERs) with one VER equalling one tonne of carbon dioxide prevented from being released into the atmosphere.
There are now moves to integrate the two levels of REDD+ through a process known as “nesting.”
François Carré, carbon portfolio manager at BNP Paribas, said, “What we call the carbon market today can be divided into compliance markets, such as Europe’s Emissions Trading Scheme (ETS) where companies are subject to regulation and the rest which in the absence of specific regulation is deemed to constitute the voluntary market.”
Carré said that the REDD+ projects also have a number of additional co-benefits which significantly contribute to UN Sustainable Development Goals (SDGs). “The UN developed methodology requires the project to be validated, with stakeholder consultation being part of the process. The whole process is standardised and open. In terms of recognition of the performance, it is important that the standard and methodology used is of very high quality.”
Mike Korchinsky, founder of REDD+ developer Wildlife Works, said that along with being an offsetting tool there are other reasons that REDD+ should matter to the finance community.
Korchinsky founded Wildlife Works in 1997 based on the idea that market-based mechanisms were the best way to conserve wildlife and help rural communities live side-by-side.