Attracting Investment to REDD+: Capitalizing on Co-Benefits?
Abstract
At its inception in 2007, the United Nations-sponsored Reducing Emissions from Deforestation
and Forest Degradation (REDD+) mechanism had one primary goal: to mitigate carbon
dioxide emissions from the global forest sector, which currently account for approximately
10% of global carbon emissions. REDD+ has undergone various modifications to its scope
and approach in the succeeding nine years, but little has yet come from subsequent
UN climate negotiations in the way of creating an obligatory financing scheme that
would require participation from actors in developed countries. Today, dozens of preliminary
REDD+ projects are operational across the world, but these projects receive strictly
voluntary funding from a suite of public and private actors, including national governments
and companies engaged in social responsibility practices. Despite some successes in
this voluntary realm and promises of REDD+ advancement at recent negotiations, it
has become clear that without assured funding – and pending an international financing
mechanism for REDD+ – projects face an increasingly difficult environment for attaining
capital resources. Scaling up the mechanism will be virtually impossible without addressing
the imbalance between supply and demand for REDD+ credits in the voluntary stage.
Code REDD, a San Francisco-based non-governmental organization whose mission is to
support and scale the REDD+ mechanism, is attempting to discover whether untapped
opportunities exist for sustaining REDD+ before the commencement of an international
financing scheme, specifically by capitalizing on the co-benefits of REDD+ projects:
the social and environmental outcomes that inherently accompany responsibly designed
carbon offset projects. These co-benefits can include biodiversity benefits, freshwater
provision, community economic development, and women’s empowerment. This question
of the potential for co-benefit quantification and sale as a means to sustain REDD+
in the voluntary phase was the foundation of the research we undertook here. We aimed
to determine how REDD+ stakeholders envisioned the role of co-benefits within the
financing of REDD+, and if further efforts to quantify and sell them could bear meaningful
results for the future of the mechanism.
Splitting the REDD+ community into two distinct categories – practitioners (those
who design, implement, and monitor REDD+ projects) and investors (both those who purchase
REDD+ credits and those who invest in REDD+ projects) – we held more than twenty interviews
to determine the answer to the above question. We found that, though co-benefits were
considered an important – even indispensable – part of REDD+ success, few practitioners
or investors were interested in their further quantification or expected that voluntary
REDD+ could be sustained based on such action. That said, many current and potential
investors offered insight into how the business case for REDD+ could be better articulated
in order to attract more investment. Also, in speaking with practitioners, we identified
ways that the mechanism could be better integrated with other contemporary environmental
efforts, including biodiversity offsetting and water funds, offering what we believe
could represent partial solutions to the REDD+ demand shortfall.
Type
Master's projectPermalink
https://hdl.handle.net/10161/8588Citation
Poirson, Evan; Hartman, Ashley; Hoagland, Chris; & Yu, Michael (2014). Attracting Investment to REDD+: Capitalizing on Co-Benefits?. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/8588.Collections
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