Guidance and Best Practices for REDD+ Transactions
It explains the global carbon market and the role of REDD+ in carbon finance, as well as the ways that REDD+ is bringing economic opportunities to rural households. Its focal areas are: tailoring Emission Reductions Purchase Agreements (“ERPAs”) for REDD+ project validation under Verified Carbon Standard (“VCS”) and Climate Community and Biodiversity (“CCB”) standards; and ways to create and effectively structure financial mechanisms for REDD+ projects, with economic and political incentives that ensure long-term sustainability.
The paper outlines what elements are necessary for a REDD+ project to have in order for it to attract investor financing. These include commercial viability and the ability to achieve registration and deliver emission reductions on a predictable schedule.
In the forest and land-use carbon sector, there are three main standards for voluntary offsets and pre-compliance offsets:
- Verified Carbon Standard (“VCS”)
- Climate Action Reserve (“CAR”) - applies to the US only
- American Carbon Registry (“ACR”)