Summary
Money is being spent on credits of dubious ecological value, though there is a growing understanding among offset buyers of the potential of forestry activities to generate high-quality, cost-effective emissions reductions while at the same time providing additional advantages like conserving species and supporting local communities.
Analysis
A research report from Ecosecurities titled "The forest carbon offsetting survey 2009" represents a landmark study on the subject of forest carbon credit and draws the the following conclusions which are of great significance
• Avoided deforestation (91%) and reforestation with native tree species (89%) were rated the most desirable forestry projects in regards to carbon results;
• South America (78%), Africa (71%) and South East Asia (69%) are the three most desirable regions to purchase forest carbon credits;
• The Clean Development Mechanism (64%) and the Voluntary Carbon Standard (60%) were rated as the most desirable standards when purchasing forest carbon offsets;
• Participants highlighted the most important factor when purchasing forest offsets are carbon standards (91%), closely followed by experience and credibility (87%);
• In comparison to Europe (19%), companies in North America (50%) are much more willing to pay up front for carbon credits that will be generated more than five years from now; (For example,Marriott has taken steps to reduce its greenhouse gas emissions through Spirit To Preserve, its five-point environmental strategy. To help offset its remaining carbon footprint;
• Benefits to local communities (89%) and the global scale of the problem (77%) have been the key motivational factors for adopting offsets from forest carbon projects.
However there have been serious questions on the quality of the deforestation carbon credits. At present, avoided deforestation projects and the credits they create are of variable quality. Some companies stay clear of the market by generating their own offsets.Marriott has committed $2 million to help protect the Juma rainforest reserve in the State of Amazonas, Brazil. Guests are encouraged to donate Ten dollars which will offset the carbon for your next ten room nights at Marriott hotels and is tax deductible for U.S. taxpayers)
The process of the formal carbon trading for avoided deforestation goes by the name of REDD (Rapid Deforestation and Degradation). With the massive need of carbon credits to come from international afforestation schemes as per the new climate bill, one will definitely see the growth of manadatory credits schemes as REDD over voluntary initiatives as Marriott's.
With this will arise the need for improving the quality of the credits, and at the same time protecting the rights of landowners who may have to forgo their rights on lands for afforestation.
Please also see my earlier news analysis titled " Can Obama's Cap and Trade Rescue The Amazon and The Andes From Deforestation" published in GLG News on 30th March 2009.
