Payments on Avoided Deforestation

International Payments for Ecosystem Services (IPES) have gained greater recognition as tool for addressing global environmental issues in recent years. A UNEP-IUCN expert workshop on scaling up Payments for Ecosystem Services to the international level in September 2006 made a significant contribution to this effort. The findings of this workshop have led UNEP in new directions with the IPES work agenda– particularly on biodiversity conservation and avoided deforestation (AD).

AD is an environmental management instrument through which deforestation is reduced in order to achieve a number of goals, most frequently carbon emission reductions. With emissions trading, there is a belief that carbon sequestration could generate funds for investment in biodiversity conservation – if AD is accepted as a means of offsetting greenhouse gas (GHG) emissions within carbon markets. While deforestation accounts for 20-25% of GHG emissions, it was rejected as an emission reduction option (ERO) under the Kyoto Protocol’s first period Clean Development Mechanism (CDM). As planning for Kyoto's second commitment period unfolds, and voluntary carbon markets burgeon, AD has resurfaced as a hot topic in the climate debate. A number of proposals for the inclusion of AD post 2012 have been developed and AD pilot projects have been launched on three continents. The objectives, design and implementation of these projects and proposals have been largely fragmented however.

It is important that UNEP has both a presence and impact on this developing issue, providing guidance and a platform for exchange. DTIE-ETB has produced a research paper on biodiversity and AD, which has been accepted to the BioEcon IX conference in September 2007. A draft of this paper will be presented at a UNEP-IUCN side event on ‘Developing International Payments for Ecosystem Services (IPES): Avoided Deforestation’ at the CBD 2nd meeting on review of implementation of the convention (WGRI2), 11 July 2007, Paris . The branch is also involved in the “Poverty and Environment Partnership” working group on AD and poverty. This group is working to inform country positions in advance of the COP 13 in December.

DTIE-ETB is currently formalizing an agenda for its further action on this topic. Three gaps have been identified in the AD field for future work:

• Measurement: Estimating biodiversity value and the value of its associated ecosystem services (within and external to the AD issue) is a key challenge. Many techniques for quantifying and predicting these values have been proposed, yet there is little consensus on methodology.

• Best Practices: There remains no comprehensive document collating best practices to be used as a universal reference for the design of procedures and principles for prospective AD programmes.

• International Exchange Platform: An international forum, either virtual (regular teleconferencing or a web-based platform) or physical (events or working groups) is essential for convening stakeholders from the diverse fields AD spans (climate change, biodiversity, desertification, etc.).

In response to these gaps, DTIE-ETB proposes two immediate priorities for the branch’s AD work programme:

• A publication for countries and organizations interested in pursuing AD. The publication should serve as a guide for operationalizing AD and will help contribute to the formulation of norms and standards governing AD. This includes discussion on best practices for measurement of forest ecosystem services, and procedures and principles for establishing AD at the project, national and regional level. The intention is to collaborate with ETHSustainability’s (Zurich) Latin American Forest Policies Project to produce this document by October 2007.

DTIE-ETB proposes to convene a meeting of stakeholders working on AD in October/November 2007. The objective is to use meeting outputs in formulating contributions to the UNFCCC COP 13 in December 2007.

Contact: fulai.sheng@unep.ch ; Louise.Gallagher@unep.ch

Reduced Emissions from Deforestation and Forest Degradation (REDD) is often used interchangeably with avoided deforestation. This note assumes avoided deforestation as a broader category of which REDD is a part. While AD can be implemented to achieve a number of goals, REDD is a form of avoided deforestation and avoided forest degradation intended to specifically reduce GHG emissions.

See Skutsch et al. (2007) for a review of two major AD proposals.

The World Bank’s Global Forest Alliance (GFA 2015) and Conservation International’s Makira Forest Project in Madagascar are two notable examples.