COP19 in Warsaw: Eight decisions to watch on forests

At a glance:

1. Finance and markets: No decision expected
2. Adaptation: No decision expected
3. Verification of emissions: Decision expected
4. Technical assessment of FRELs/FRLs: Decision expected
5. National forest monitoring systems: Decision expected
6. REDD+ safeguards: Decision expected
7. Drivers of deforestation: Decision expected
8. Agriculture: No decision expected

Discussions on forests reached a peak in Durban (COP17, 2011) and stagnated in Doha (COP18, 2012) but saw remarkable progress in Bonn in June this year. Here is our assessment of how forests are likely to fare over the next two weeks at COP19 in Warsaw.

1. Finance and markets: Key to the 2020 climate treaty

Why: Many countries are already trying to mitigate climate change through various approaches and many of these approaches rely on market mechanisms – e.g., the European Union has a trading system for emissions reduction units and the USA (California) has developed a cap-and-trade system – but each market uses a different currency and converting between these currencies is difficult.  Thus, units are not easily traded between the different systems. This is partly the reason for the sluggish development of a global carbon market and the low interest of investors.  In addition, the UNFCCC is considering creating new market mechanisms for different sectors, so the problem is likely to lead to greater inefficiency unless countries find a way to connect these different mechanisms.

The UN Framework Convention on Climate Change is made up of two working bodies that give advice to the negotiators who meet at the end of each year as part of the Conference of the Parties (COP):

• The Subsidiary Body for Scientific and Technical Advice (SBSTA), works closely with IPCC and scientists to review and advise UNFCCC on the science of climate change. Powered through their agenda at June’s Bonn meeting and have provided a number of decisions for consideration in Warsaw.
• The Subsidiary Body for Implementation (SBI) is responsible for information gathering on adaptation and finance, among other sectors. Was held up at June’s Bonn meeting by Russia, Ukraine and Belarus, which were concerned about decision-making procedures.

How does this relate to forests: REDD+ was originally conceived by some countries as a market-based mechanism, where credits generated by reducing deforestation could be sold and traded in domestic and international offset carbon markets. However, the failure of a functioning global carbon market has meant that REDD+ relies mostly on overseas development aid, which has a primary goal of supporting development and poverty reduction, not achieving emission reductions.  Developments that permit more efficient trading of REDD+ emission reduction credits could have implications for the functioning of REDD+ and the management of forests in developing countries.

What: In 2020, the world will start implementing a new climate change regime to replace the Kyoto Protocol. Ahead of this, there is much discussion on how a global carbon market could emerge and be made operational. Three aspects of these discussions affect forests:

• The Framework for Various Approaches (FVA) is a program that aims to facilitate international trading between domestic emissions trading schemes. It will comprise a set of rules to ensure all market- and non-market-based mitigation approaches meet certain standards (important for investors), especially from an environmental integrity point of view. Countries have recommended that a pilot phase should start at COP19.
• Non-market approaches (NMA): Mitigation actions that are not traded on a global market, such as incentives, subsidies, fines, regulation of the transport sector etc.
• New market mechanisms (NMM): Essential for the FVA to function correctly. Each sector and project currently has its own way of generating credits for emissions reductions (e.g., forestry has REDD+, energy has CDM, etc.). The new market mechanisms will allow credits to be issued at a national level, and trading of these credits can be domestic or international at the discretion of each country (this takes into account those countries that are opposed to international trading and only want to see market mechanisms apply to their domestic situations).