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Ready for the Market? Assessing prerequisites for market-based REDD+ activities

External Reference/Copyright
Issue date: 
June 4, 2012
Publisher Name: 
JIKU-Bund.de
Publisher-Link: 
http://jiko-bmu.de/
Author: 
Nicolas Kreibich, Christof Arens and Wolfgang Sterk
Author e-Mail: 
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This policy paper aims at identifying and assessing the prerequisites developing countries should fulfill in order to access a future market-based REDD+ mechanism. Using four different evaluation criteria the areas of "technical readiness", institutional and legal readiness" and "policy readiness" are analyzed. The authors conclude that given the large differences between countries in their progress towards REDD+ market readiness, a general integration of REDD+ credits into carbon markets is currently clearly out of reach and should be considered at a later point of time.

With forestry related activities being responsible for about 17% of the global CO2 emissions (IPCC 2007), the pressure towards establishing an international mechanism for reducing emissions from deforestation and forest degradation and to enhance forest carbon stocks in developing countries (REDD+) is extraordinarily high. While the details on the design of the mechanism are still to be agreed on under the United Nations Framework Convention on Climate Change (UNFCCC) and the question of financing remaining particularly contentious, the focus of attention gradually shifts from the international to the national level. 

Against this background, this policy paper aims at identifying and assessing the prerequisites developing countries should fulfil in order to access a future market-based REDD+ mechanism. These readiness elements are identified through a literature review and by taking into consideration first experiences from on-going REDD+ readiness initiatives. In a second step, an analysis using the criteria of legitimacy, effectiveness, efficiency and equity (LEEE criteria) is made. Finally, three emission trading schemes are briefly analysed with regards to their potential as REDD+ markets and the requirements for such credits. 

The analysis revealed that countries will have to fulfil a large number of requirements in all three readiness building blocks (technical readiness, institutional and legal readiness, and policy readiness) in order to produce legitimate, effective, efficient and equitable outcomes. While countries can be expected to significantly progress in terms of technical readiness in the near future, institutional and legal readiness will prove more difficult to achieve. The authors conclude that given the large differences between countries in their progress towards REDD+ market readiness, a general integration of REDD+ credits into carbon markets is currently clearly out of reach and should be considered at a later point of time, possibly after 2020. In the mean-time, a REDD+ market separate from existing carbon markets could be established on a step-by-step basis. Advantages associated with such an approach comprise a prompt start of results-based activities in advanced countries while at the same time allowing for gaining important insights into the functioning of a REDD+ market without jeopardizing the integrity of the existing carbon markets. In progressing towards such an approach, a well-balanced treatment of all three readiness elements should be aimed at. 

 

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Extpub | by Dr. Radut