Mitigating Climate Change via Market-based Forest Conservation

Stakeholders, Tactics, Risks and RewardsStakeholders, Tactics, Risks and Rewards

Andrew Courtney

The George Washington University School of Business | SMPP298 | Summer 2010

About this Presentation• Summarizes findings from independent research and reading course.• Course is facilitated through The George Washington University,

School of Business, Department of Strategic Management and Public Policy.

• Slides are fully annotated and sources are fully cited in the “notes” pane of each slide.

• Prepared by Andrew Courtney (andrewc@gwmail.gwu.edu) for academic purposes.

Executive Summary• Deforestation accounts for nearly 20%* of greenhouse gas (GHG)

emissions annually. Meanwhile, standing forests remove 18%** of carbon dioxide from the atmosphere annually.

• Thus, deforestation is accelerating climate change by1. adding more GHG emissions than the entire transportation industry2. removing vast quantities of forests that were cleaning carbon dioxide

from the air. • Decreasing tropical deforestation rates must be part of global policy

to mitigate climate change. • Market-based forest conservation can facilitate these reductions. • However, the process is complex and the stakeholders are many. • This presentation will analyze market-based forest conservation in

terms of techniques, stakeholders, risks and rewards.

Contents

Climate Change and Global “Weirding”

350 ppm

• Considered safe upper limit of CO2 concentrations in atmosphere

• Above 350 ppm, climate change accelerates via feedback effects

Climate SensitivityIf we double the Earth’s greenhouse gases, how much will the temperature change?

Greenhouse Gas Emissions by Sector

Forests and Climate Change

Deforestation

Forest Degradation

Areas of Net Forest Loss

Amazon Basin Congo Basin Indonesia Amazon Basin Congo Basin Indonesia

Deforestation Tour (1990 – 2005)

Click Image to play deforestation tour (30 seconds)

Drivers of Tropical Deforestation

• Major Industries (industrial farming, mining and logging)• Subsistence farming• Inadequate governance and uncertain land ownership

Early Tropical Forest Conservation

Ecological Economics• Goods produced unsustainably benefit from a hidden subsidy, paid by the environment, community or future generations. • Thus they are usually cheaper than goods produced sustainably.

Payments for Ecosystem Services

• Recognizes value of services provided by ecosystems –pollination –water filtration –carbon sequestration, etc

• Estimated annual value of world’s ecosystem services: $33 trillion

Forest Ecosystem Services

Market Based Forest ConservationREDD: Reducing Emissions from Deforestation and Degradation

What is REDD?

Policy

• Kyoto Protocol• Clean Development Mechanism (CDM) • United Nations Framework Convention on

Climate Change (UNFCCC)• REDD+ adds provisions for– indigenous peoples and local communities– sustainable forest management/ conservation.

Financing

• Market • Fund

• Hybrid

Complementary Financing

Building Blocks of REDD

Baselines and Additionality

Measuring and Monitoring

Controlling Deforestation Leakages

Assuring Permanence• Projects must be around long enough to fulfill

the mission of capturing and storing carbon.

Standards and Verification

Involving and Benefitting Local Communities and Indigenous Peoples• 400M+ people depend on tropical forests• Are often the best conservationists• Benefit-sharing programs provide alternative

income / employment• Clarify Land Tenure

and Governance

Assuring Environmental Co-Benefits

• Overlap with biodiversity hot spots.• Co-benefits include:• Biodiversity conservation• Ecosystem services• Watershed Protection

• Minimizes undesirable carbon-maximizing behaviors (monoculture plantations, exotic species)

Scale and Scope

Cost Effectiveness of REDD, 2007

REDD Opposition

REDD Alternatives

REDD Challenges

The Way Forward

The Way Forward

The Way Forward