Emerging Compliance Markets for REDD+: An Assessment of Supply and Demand: Summary for Policymakers
This technical report focuses on new compliance markets for the Reducing Emissions from Deforestation and Forest Degradation (REDD+) program, and is a summary for policymakers from the longer report “Emerging Compliance Markets for REDD+: An Assessment of Supply and Demand”. To achieve emissions reductions from deforestation and degradation and enhance carbon stocks, there must be long-term finance available to incentivize conservation and sustainable use of forests. The report outlines that market-based mechanisms for REDD+ are growing steadily, and private sector capital has been responsive. Additionally, demand for REDD+ support is growing and includes emerging emissions trading schemes in five countries and the State of California, as well as with initiatives such as the Forest Carbon Partnership Facility and Germany’s REDD Early Movers fund.
The report takes a bottom-up approach to gathering REDD+ data wherein potential supply from its projects and programs helped develop a projection of the global supply for the period 2013-2020. The report authors estimate a 22 to 240 percent pipeline growth needed to be able to meet each of the demand scenarios. The report findings predict that demand for REDD+ credits will be weak compared to potential supply without an agreement under the UNFCCC. If the parties do not come to an ambitious agreement in 2015, demand could remain low through 2020 or longer. This scenario could cause harm to governments, communities, and the private sector already engaged in REDD+.
Excerpts from the report:
Excerpts from the report:
The report specifically lays out two ways to avoid the risk:
- Develop new performance-based compensation vehicles for the 2013-2020 period and increase bilateral funding, and/or
- Ensure an ambitious UNFCCC agreement is reached that includes a prominent role for REDD+ markets with prompt start provisions.
The report assessed the policies and early REDD+ actions that represent the current status of market and results-based finance mechanisms for REDD+ around the world. This includes:
- Estimates of potential demand for REDD+ credits based on current market initiatives and results- based finance mechanisms
- Estimates of potential supply of REDD+ credits based on an analysis of the current pipeline of REDD+ projects and programs with growth assumptions
- Synthesis of demand and supply findings to understand potential supply-demand balance and implications for REDD+ finance
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