Cancun hopes to serve "oven-ready" REDD deal

UK businesses should prepare for international climate change negotiators to strike a deal on how rich nations will pay to help reduce emissions from deforestation at Cancun, according to experts from leading green groups.

Speaking at BusinessGreen's lecture evening on the Cancun Summit yesterday, Adam Gibbon, climate change technical specialist from Rainforest Alliance said there was "great hope" negotiators will agree on the UN's proposed reduced emissions from deforestation and degradation mechanism, known as REDD+.

While some voluntary projects already exist, an international deal on REDD would boost investor confidence and scale up existing activities, he said.

He described the REDD element of negotiations as "oven ready", citing comments made recently by the former head of the UN climate change secretariat, Yvo de Boer.

James Cameron, executive director of Climate Change Capital, said he too was optimistic a deal could be reached on forestry in Cancun, while the British delegation for Cancun is known to be similarly confident that progress on forestry protection can be delivered over the next two weeks.

Gibbon said any agreement would throw up a range of commercial opportunities for UK businesses which could support rainforest projects by collaborating with local partners as project developers or offering technical services, such as accounting, satellite image analysis, and legal advice.

He also suggested firms could offer monitoring and auditing services to projects once they are established. "If and when there is a global agreement on REDD, it is likely that third party validation of projects and country carbon balance will be required," he said.

However, he warned that the negotiations still had a number of barriers to overcome, including finalising appropriate safeguards to protect the rights of forest communities.

"It's been widely agreed that safeguards are a necessary foundation of REDD's success, [..] and if there are any attempts by negotiating parties to dilute or sideline these safeguards, then you can expect headlines to be made in Cancun and potentially the threat of an agreement not being reached," he said.

Another contentious issue is whether projects will be implemented by governments or at a sub-national level, he said.

"There are proposals which would allow sub-national projects to generate credits and sell them directly into the international market, by-passing federal governments," he observed.

This option would reduce the risk for private investors, but could be opposed by governments from developing countries concerned that they will lose control of the revenue generated from forestry projects and would see their forests effectively privatised by foreign companies.

REDD negotiators must also decide how to finance the mechanism, Gibbon said, either through a fund or carbon market-based approach, or a hybrid of the two.

However, any agreement on REDD will not be formally recognised in Cancun as there is broad acceptance that a full international climate change treaty will not be delivered at the summit. As such, any forestry deal would have to wait until next year at the earliest for the finalisation of the wider negotiations to be legally recognised.