Linkage between forest-based mitigation and GHG markets

According to the latest assessment report of the Intergovernmental Panel on Climate Change, deforestation and forest degradation contributed to 23% of global carbon dioxide emissions and 17% of global emissions of all greenhouse gases in 2004 (IPCC AR4 SPM, 2007). Despite significant uncertainties, these figures stress the relevance of addressing deforestation into the new global climate governance regime. Deforestation is primarily a concern for tropical regions nowadays and FAO's Forest resource assessments (2005) highlight significant national disparities as a consequence of history, soil and climate conditions and current policies and socio-economic conditions. The Stern Review (2006) pointed to deforestation abatement as a must-seize opportunity to cut global greenhouse emissions with good cost/efficiency and numerous co-benefits. Under the framework of the 2007 Bali Action Plan, the UNFCCC is now considering policy approaches to promote the reduction of emissions from deforestation and forest degradation, and also forest conservation, sustainable forest management and forestation ('REDD+'). At the same time, the European Union is engaged in a major review of its climate and energy legislation. The EU climate/energy package has entered into the final stages of negotiation and the outcome should provide funding for REDD+ actions on the long run through some sort of connection to carbon markets. These are moments of historic significance both for world forests and climate protection, but significant challenges remain. This workshop focuses on one of these challenges: while mechanisms are being designed to connect greenhouse gas emission trading schemes and REDD+ actions, we must ensure that they enable broad and far-reaching actions while safeguarding against various sorts of unintended consequences. This background paper intends to provide a rapid initial overview on three aspects of the linkage between forest-based mitigation and emission trading schemes: (i) the quantification of funding requirements for REDD+ actions, (ii) fund-raising on taxpayers and consumers in advanced economies, and (iii) mechanisms to transfer funds to support REDD+ strategies in participant countries. (author)