The supply of REDD carbon credits should hopefully receive a boost in the coming years as the UN’s REDD program recently announced that five more countries, Solomon Islands, Papua New Guinea, The Philippines and Paraguay, have signed their national program documents and are now full partners of the program. They join Bolivia, The Democratic Republic of Congo, Indonesia, Ecuador, Panama, Tanzania, Vietnam and Zambia. To date $55.4 US has been allocated to help develop national REDD strategies in partner countries.
Countries that have not yet become full partners but are nonetheless expected to in the future are Argentina, Bangladesh, Bhutan, Central African Republic, Colombia, Costa Rica, Ethiopia, Gabon, Guatemala, Guyana, Honduras, Ivory Coast, Kenya, Mexico, Mongolia, Nepal, Nigeria, Pakistan, Peru, Republic of Congo, Sri Lanka and Sudan.
REDD (United Nations Collaborative initiative on Reducing Emissions from Deforestation and Forest Degradation) was internationally ratified in Copenhagen at the 2009 United Nations Framework Convention on Climate Change.
It is estimated that 20%-25% of global carbon emissions are a result of logging, much of that illegal logging in the tropics. REDD is designed to protect remaining tropical forests by making it financially attractive to preserve the forest. REDD carbon credits are the mechanism through which this financial incentive is achieved.
A carbon credit is a tradable commodity representing 1 ton of greenhouse gas emissions. As a result of the Kytoto Protocol polluting industries in the developed world were assigned steadily decreasing caps on their annual emission levels. There is also a trading mechanism whereby parties with such a cap can trade carbon credits, buying them if they exceed their limit and selling them if they come under it. Carbon trading has developed into a global commodity market as a result.
These carbon credits can be ‘produced’, by projects, which are certified by the international regulatory bodies as reducing or preventing carbon emissions. They are then sold to companies which either voluntarily want to offset their carbon footprint, or are obliged to as part of the Kyoto Protocol’s compliance carbon market.
REDD carbon credits are envisaged as giving monetary value to the preservation of tropical forests, as opposed to financial value being realized through illegal logging. A REDD project undertakes to preserve a specific area of forestry, with REDD carbon credits assigned for every ton of carbon evaluated as being ‘sinked’, in the trees within that area. When trees are cut down for timber that carbon is released into the atmosphere.
Along with national governments, NGOs and private finance, indigenous communities are being actively involved in REDD projects. Funds realized through the sale of REDD carbon credits will provide a source of finance to indigenous populations, who in the past have been forced into illegal logging of the forests they have traditionally called home and relied upon, due to lack of alternatives.