Terra Global offers ‘nested REDD’ blueprint
A broad proposal for how forest carbon projects could be allowed to operate within a future international REDD+ framework has been outlined in a new industry paper. In the paper, forest carbon project consultants Terra Global Capital attempts to show how individual REDD projects might able to generate tradable offsets compliant with emerging national and international mechanisms.
The paper was written for the US Governors' Climate and Forests Task Force and is titled "An Integrated REDD Offset Program (IREDD) for Nesting Projects under Jurisdictional Accounting."
Under the emerging UN REDD+ mechanism and REDD proposals coming out of the US in Senate draft cap-and-trade bills and the Governors' Climate and Forests Task Force, carbon crediting for avoided deforestation action would be largely be conducted under wide-scale national or provincial programmes with credits awarded to governments. This puts a question mark over the future of the localised project-by-project market approach, upon which the forest carbon, and indeed most other emissions offset action, has so far been based.
While the national programme approach is better placed to ensure deforestation is not just shifted around a country, as is the risk under the project approach, limiting project-based REDD risks shutting out much potential private-sector capital from forest protection and restoration. Indeed, the voluntary carbon market for project-based carbon credits has so far been the main driver of avoided deforestation activity on the back of private sector and NGO methodology and project development.
This has led to the concept of ‘nested REDD’ being proposed, where projects might be allowed to exist within national programmes. As Terra Global argues in the paper, the main difficulty with nested REDD is how project-based and overarching national or provincial forest carbon accounting can be harmonised. How are the credits to be divided up between government and project stakeholders?
Terra Global’s paper suggests a broad outline for an integrated REDD (IREDD) system to attend to the issues of nesting. The idea is to enable individual REDD projects to generate offsets to be used in a compliance system, while providing incentives for governments to address regional drivers of deforestation, it says. Under IREDD, credits would only be generated from formally registered project areas, incentives are built-in to maximize the formally registered project area within a given national or provincial jurisdiction, and funding mechanisms are put in place to support government programs and policies that promote reductions in deforestation beyond the activity of the nested projects.