ClearSky Climate Solutions, CEO, Keegan Eisenstadt was on the ground in Durban for the UNFCCC 17th Conference of the Parties. He was present for what was an incredibly busy couple of weeks. Participating in a schedule filled with formal negotiations, technical side events, meetings with government actors, NGOs and civil society organizations from around the world. Keegan had numerous educational discussions with other participants and left with many ideas of how ClearSky can more thoroughly participate in the climate change sector.

While the formal outcomes of the meeting are something of a mixed bag, the result was not as bad as projected in the run up to the COP17. EU leadership, and a determination by all the major Parties to build upon the successes of Cancun, led to a result that may act as the foundation for future progress on mitigation and adaptation. The 194 countries in the convention agreed to be legally bound, in an agreement to be signed no later than 2015, to cut their emissions of seven greenhouse gases starting no later than 2020. This outcome is very important, as it has removed the fault line separating the developing/developed countries that has hampered years of talks by bringing countries such as China and India under a mandatory reductions framework. This has effectively removed the key barrier that has kept the US from the negotiating table, and its importance cannot be underestimated. ‘The Durban Platform’ is an important step on the way, but not a destination. Its importance is in the clear signal it sends that regulatory clarity on future carbon markets are expected by the end of 2015.

Implications for Forests and REDD+
Two sets of negotiations were held in Durban with regard to REDD+: (1) a technical discussion, (under the auspices of the Subsidiary Body for Scientific and Technological Advice, SBSTA), which focused on safeguards and reference levels and (2) a broader discussion regarding the overall architecture of the agreement (Ad Hoc Working Group for Long-term Cooperative Action, LCA ¶63-73), which revolved around the private sector and market mechanisms, and whether these would have a role to play in financing REDD+. Key advancements were made in both areas that were stronger than most observers expected, and which served to reinforce the community-oriented approach at ClearSky.

The key element of the REDD+ decision in Durban was on sources and delivery of finance. The Durban Platform is the first time that 194 countries have agreed, despite ideological differences, to include explicit mention of market-based approaches to funding REDD+. The decision confirms that private sector has a role to play, and considers that market-based approaches can be developed, subject to maintaining environmental integrity, to deliver performance-based funding to REDD+ activities. The decision encourages financing from private sector actors to overcome a large funding gap in public resources to achieve the required reductions in deforestation. Importantly, the positive signal that markets can play a driving role in REDD+, opens further opportunity for work on REDD+ projects like the work it is currently developing in the tropics.

A second, important REDD+ discussion in Durban looked at the issue of incorporating effective social, environmental and governance safeguards for local communities and biodiversity. Significant progress was made on defining the criteria, monitoring systems and types of information that must be conveyed in reports on safeguard implementation and delivery for projects in all countries. Discussions focused on the frequency of safeguard monitoring/reporting and the types of information that needed to be monitored. The monitoring and reporting of safeguards is vitally important to ClearSky, because it allows us to see if national level REDD+ programs are being implemented with the Free Prior Informed Consent of indigenous peoples and local communities, and ensure that their rights are being respected. There had been strong push back against reporting of safeguards from some forest countries on sovereignty grounds – but the agreement to include a robust safeguards decision won the day.

The consistent message from donor countries, NGOs and the private sector is that only through the rigorous application and accurate reporting on safeguards can stakeholders ensure that positive and equitable REDD+ outcomes are achieved. Durban produced a strong and detailed framework to deliver this. Some observers, including Pact, lamented the fact that the explicit guidelines on the content of safeguard monitoring were not decided upon, and were left to be defined at a later time.

The final main negotiating point regarding REDD+ at Durban related to reference levels for forest carbon. It was agreed that the formation of applicable reference levels can be stepwise and iterative, and the decision acknowledges that subnational forest reference emission levels and/or forest reference levels may be used as an interim measure on the way to a national accounting framework, ensuring the viability of the ‘nested approach’ – which potentially incorporates previous ‘project based’ actions.

Considering the persistent global economic situation, Durban was a much better outcome than most observers expected. It was a surprising ‘shot in the arm’ for carbon markets as a tool, and sets the stage for aggregating all the emissions from 194 countries into the UNFCCC process over the next 8 years. REDD+, as in the past 3 years, was a big winner. This time, however, the Parties were able to rise above previously entrenched positions to set the stage for the creation of innovative and transformative financing solutions that make forests worth more standing than cut. The extensive discussions on safeguards were a vindication of the role of communities, forest dependent and indigenous peoples in ensuring the sustainability of a future REDD+ mechanisms – whether it is project-based, sub-national or national……it is the people living in the woods who will determine their future.

Hello ClearSky friends and climate change concerned citizens,

I’m still in Cancun and feeling very inspired by the action from 3:30AM this morning. Quite honestly, this is a truly impressive feat of diplomacy by the Mexicans. This is a big win for REDD, CCS, and a new Green Fund (World Bank is interim trustee). All major players are happy (with the exception of a small block headed by Bolivia, Cuba, and Venezuela).

Specific elements of the Cancún Agreements include:

• Industrialized country targets are officially recognized under the multilateral process and these countries are to develop low-carbon development plans and strategies and assess how best to meet them, including through market mechanisms, and to report their inventories annually.
• Developing country actions to reduce emissions are officially recognized under the multilateral process. A registry is to be set up to record and match developing country mitigation actions to finance and technology support from by industrialized countries. Developing countries are to publish progress reports every two years.
• Parties meeting under the Kyoto Protocol agree to continue negotiations with the aim of completing their work and ensuring there is no gap between the first and second commitment periods of the treaty.
• The Kyoto Protocols Clean Development Mechanisms has been strengthened to drive more major investments and technology into environmentally sound and sustainable emission reduction projects in the developing world.
• Parties launched a set of initiatives and institutions to protect the vulnerable from climate change and to deploy the money and technology that developing countries need to plan and build their own sustainable futures.
• A total of $30 billion in fast start finance from industrialized countries to support climate action in the developing world up to 2012 and the intention to raise $100 billion in long-term funds by 2020 are included in the decisions.
• In the field of climate finance, a process to design a Green Climate Fund under the Conference of the Parties, with a board with equal representation from developed and developing countries, is established.
• A new Cancun Adaptation Framework is established to allow better planning and implementation of adaptation projects in developing countries through increased financial and technical support, including a clear process for continuing work on loss and damage.
• Governments agree to boost action to curb emissions from deforestation and forest degradation in developing countries with technological and financial support.
• Parties have established a technology mechanism with a Technology Executive Committee and Climate Technology Centre and Network to increase technology cooperation to support action on adaptation and mitigation.

With renewed hope I begin to think that we are moving slowly forward.  The T-shirt from the youth delegation of the Solomon Islands claiming “You have been negotiating about this for longer than I have been alive.  You can’t tell me you need more time.” Somehow seems less of an indictment this morning.  Let’s see where we go from here.

Excited and hopeful,

Keegan

The heavy interest in REDD+ projects is palpable here in Cancun.  What is not so evident is that the compliance markets are going to be ready to move the REDD+ agenda forward.  Even if an agreement comes out of this COP, it will effectively be authorizing the technical working groups to begin work on the REDD+ protocols and methodologies for national level REDD.  I repeat, to BEGIN work.  That leaves the non-UN markets to lead the way and pioneer the path forward for REDD+.

Timed to coincide with the COP meetings, the Voluntary Carbon Standard (VCS), has approved two distinct methodologies for use in the market, and the Climate Action Reserve (CAR) of California has formally begun the process to include REDD+ from the States of Yucatan, Campeche and Quintana Roo in Mexico.  So the voluntary carbon market is releasing REDD+ project methodologies for use around the world, and CAR is beginning to formally push sub-national action for the California compliance cap and trade market.  The development of these two tracks is vitally important for REDD+.  It formally opens a path to market for actions that have been contemplated, or are currently being worked on, in the field to access the market, NOW.  It also demonstrates the interest of the marketplace for REDD+ credits – and that the world has moved on.

There is a bit of a feeling like the UN process is already behind the Voluntary Market and the regional compliance carbon markets with respect to REDD+.  This may not be true forever, but there is certainly a window for the next few years when the voluntary market and the CAR market will dominate the action on the ground.  I hope that the UNFCCC process will embrace the work done in those markets and learn from them for the CDM – and not decide to reinvent the wheel. 

In the short term, I look forward to implementing some REDD+ projects – under the newly validated VCS methodologies or in Mexico under CAR!

Saludos a todos,

Keegan

Dec. 9^th, 2010

As the Cancun Climate Meetings enter the final stretch there is cause to be cautiously optimistic.  There appears to be relative progress on a number of issues: REDD+, Adaptation, Technology Transfer, Capacity Building and parts of the Financing.  The newly proposed Adaptation financing mechanism is not defined at all, and issues relating to Monitoring, Reporting, and Verification (MRV) remain very contentious.  Overall, the question of having a market mechanism that uses offsets from developing countries is agreed upon, with significant exceptions from a few countries.

When I ask delegates “what looks good?”, they unanimously answer REDD+ seems to be looking good!  That is Great News!  But it is also a result of the significant work done to get agreement on REDD+ prior to everyone arriving in Cancun.  That said, Bolivia and a few other countries are very opposed to a market mechanism for REDD+, and may have some influence on the final nature of the agreement and the language of the agreement. 

I attended a high profile session last night where the message of REDD+ as a mainstream idea was evident.  The event, put on by the Avoided Deforestation Partners, included Presidents and Prime Ministers of some countries, as well as Presidents and CEOs of the World Bank, big conservation organizations and Wal- Mart.  The idea that REDD+ would be promoted publicly by the president of the World Bank, The President of Wal Mart and Jane Goodall is a snapshot of the broad consensus forming around REDD+ at this meeting, and globally.  There were times I felt the assembled community of REDD+ supporters was surreal, it did drive home the point that there is broad support for REDD+ because it has the potential to be so good for so many constituencies in the world. 

Keegan

If you follow forest conservation or carbon offsets, maybe you read an interesting announcement last month regarding the Democratic Republic of Congo (DRC).  If you missed it, read the Reuters article here.  A carbon offsetting firm announced a nation-wide agreement with all DRC provinces, tribal chiefs, land owners, and the spokesperson of the DRC Senate.  According to the press release, the deal gives the company exclusive rights to develop carbon offset projects in the country, including REDD (Reducing Emissions from Deforestation and Degradation), reforestation, and alternative energy projects.

The DRC is one of the pilot countries in the United Nations REDD Programme, an on-going effort to help developing countries participate in formal, international REDD agreements.  It’s a slow process, but it shouldn’t be circumvented – especially for the DRC, which suffers from weak governance and hosts numerous forest-dwelling communities whose rights and tenure must be respected.  That’s why this announcement raised so many eyebrows.  Could this be a dramatic step forward for the DRC, unifying the numerous stakeholders around one shared agreement?  Or, is this an example of unscrupulous activity in the nascent carbon market, where a foreign firm (a “carbon cowboy,” if you like) swindles the locals?  We hope for the former, as we have witnessed several painful examples of this later behavior in other carbon-rich countries, like Indonesia and Papua New Guinea. 

We should demand increased transparency in the global carbon markets.

Carbon project developers, investors, and country governments can avoid this kind of unkind speculation, simply by being transparent about their projects.  Projects that neglect this rule are always met with criticism and opposition.  According to a World Bank employee, the DRC Ministry of the Environment isn’t aware of the recent agreement, so the DRC government is unlikely committed to the deal.  

The REDD Monitor, a watchdog site, takes a critical view of this announcement.  Can we blame them?  This story will play out in time, of course.  But in the meantime, everyone in the carbon market should remember that transparency is the best policy for avoiding this kind of criticism.  The carbon market has been plagued by bad actors.  Openness and transparency is the only way toward solving this issue.  This should be a clear reminder that in order to link carbon finance to conservation and development goals, honesty is truly the best policy.

As jet-lag refuses to abate, I find myself writing this post at 4:40AM.  It is early morning in Cambodia, and I’m here to have a look at the new Avoided Deforestation project being designed in Northern Cambodia.  The Oddar Meanchey Community Forest REDD Project, implemented by The Forest Administration of Cambodia, Terra Global Capital, and Pact Inc.  There is a novel experiment happening in the forest of Cambodia – rural, forest-dependent communities are being engaged in the international carbon market in a way not previously seen.  Numerous communties along a river valley, that leads eventually to the Mekong River, are aggregating their good stewardship of their forests in an avoided deforestation project.  The rural communities are all being vested with secure land title from the national forestry authority.  This is something of great importance to the communities, and something they have never had.  It is also considered to be a lynchpin to achieving sustainable management by forest communities around the world.  If the people become owners of the lands, are they apt to manage it differently than if they are users of the forest?  That’s the question.  It is often taken for granted that a homeowner treats the home beter than a tenant renting the space.  Is that true of forests as well?

The accumulation of rural farming villages, tree resin collectors, and buddhist monks leading the various communities have aggregated their efforts to protect their forests.  It is now “their” forests.  In exchange for protection and monitoring, guarding and measuring their forests against threats of harvest from outside, the communities also hope to gain access to the voluntary carbon marketplace.  The project is in the finals stages of validation/verification under the Voluntary Carbon Standard.  It will soon generate revenues from the sale of carbon credits, which will be shared amongst the Forest Administration, TerraGlobal Capital and the communities themselves. 

ClearSky is keenly interested in seeing the Reduced Emissions from Deforestation and Degradation (REDD) carbon credit marketplace take off in a robust manner.  It has a unique opportunity to be a win-win-win scenario.  By intimately involving communities in the design/implementation and rewards of a carbon project, the carbon funds can bring about more secure livelihoods for forest-dependent peoples around the world.  At the same time, REDD proejcts can protect the atmosphere and climate regime as well as the forests and biodiversity from areas that have not been significantly impacted. 

If the experiment works – it can achieve numerous goals at the same time.  That is something well worth looking into!

A carbon offset represents a metric ton of carbon dioxide equivalent that is either avoided or removed from the atmosphere.  The creation of a carbon offset involves the justification of a specific activity that goes above and beyond “business as usual.” Justification is awarded when outside parties agree that the project results in an overall benefit to our atmosphere, which would be easy if our industries, ecosystems, and atmosphere were all metered.  On the surface, one would think that purchasing carbon offsets would be a task void of decision making.  An apple is an apple, right?

To understand carbon offset basics and the variety that exists, read this June 2010 featured article in the International Society of Sustainability Professionals (ISSP) online journal, Insight:  http://bit.ly/az71AY

Climate mitigation, like all social and environmental movements, involves a change in our governance, cultural norms, education, and economy. Through purchase power a consumer can instigate minor shifts within each of these. The purchase of or investment in carbon offsets will continue to catalyze a reduction in GHG emissions in our atmosphere – if, like any other commodity, we are duly diligent and understand the characteristics, attributes, and features of what we buy.