GLOBE-Net, June 29, 2010 - EcoSecurities, Conservation International, Climate, Community and Biodiversity Alliance (CCBA), ClimateBiz and the Norton Rose Group have collaborated to find out what more than 157 global, multinational and regional organisations think about forestry and forest carbon offsetting projects.
Some of the key findings of the survey include:
• Positive attitudes towards forest carbon offsetting have increased in the past year, with nearly 80% of respondents having a 'positive' or 'very positive' attitude compared to only 58% in 2009;
• In particular, the most significant change in attitude was from Europe where 84% of participants claim to have a 'positive' or 'very positive' attitude compared to 36% in 2009;
• Participants highlighted the most important factor when purchasing forest carbon offsets are carbon standards (89%), closely followed by project location (84%), project type (80%) and the projects' ability to generate additional community and biodiversity benefits (83% & 77% respectively);
• Reforestation with native species (89%) and avoided deforestation (78%) were rated the most desirable types of forestry project;
• South America (74%) was the most sought-after region from which to purchase forest carbon credits;
• The Voluntary Carbon Standard (VCS) and Climate, Community & Biodiversity (CCB) Standards were the two most popular carbon standards (73% and 64% respectively).
"Forestry promises to be a powerful and cost-effective tool in the fight against climate change," ClimateBiz Managing Editor, Matthew Wheeland. Corporate offset buyers recognise this potential, and show little sign of declining enthusiasm for forestry, despite the regulatory uncertainty.
With an estimated 16% of the total global GHG emissions coming from the destruction of tropical forests, the protection of forests and planting of trees is an essential component of any global strategy for mitigating climate change, notes the report.
McKinsey's authoritative report and the Stern Review all note the importance of forests and forestry as abatement options. This point has also been emphasised in the recent Copenhagen Accord.
In addition to reducing GHGs, the protection and sustainable management of forests, reforestation and afforestation have the potential to achieve important sustainable development and biodiversity conservation co-benefits. This makes them especially attractive for both regulatory and voluntary carbon market buyers, who seek to generate multiple benefits when purchasing offsets.
Forestry projects were some of the first activities designed to mitigate GHG emissions and generate offsets. In many ways, these pioneering projects helped define the concept of 'carbon offsets' and tree planting is still considered by many as the most 'classical' type of offset project.
Forestry has consistently been the voluntary carbon markets underachiever. It seems to be a contradiction terms when analysing what buyers seem to want versus what they do. For instance, when asking offset buyers in a survey, forest carbon consistently comes out as one of the preferred types of activities for sourcing offsets. But when checking real numbers and the turnover in the markets, actual volume does not match those preferences.
The survey results indicate that in 2009 a majority of corporate buyers have a highly positive or positive attitude towards forest carbon offsets (80%). Despite this apparent interest, the Ecosystem Marketplace's data shows only a small market share in 2008 for forestry. We believe that this conundrum will be resolved in the near term.
Over recent years there has been a lack of supply of high quality forestry offsets validated or verified by preferred carbon standards such as the VCS. Among other things, the lack of supply is also due to the unique challenges faced when developing forest carbon projects. Examples of these challenges include:
• High upfront costs, slow generation of credits - Forestry projects, especially those involving tree planting, have a relatively long lead time before emission reductions are generated as it takes time for trees to grow and store significant amounts of carbon. The prospect of having to wait so long for carbon returns can act as a barrier to financing.
• Complex methodologies and data requirements - Existing baseline and monitoring methodologies for forestry projects are recognised as some of the most challenging in the carbon markets. Whilst this will change over time as more experience is gathered, at present it has been a slow process for many projects to successfully deliver credits verified under recognised carbon standards.
• Many stakeholders to manage - It is not uncommon for a forestry project to involve a broad range of stakeholders such as local communities, NGOs, forestry agencies as well as government representatives. Gaining consensus among all of these stakeholders can often be a lengthy process that can deter investors.
• Risk - Tropical forests largely occur in developing countries where there are increased risks from such factors as political instability and the lack of laws and regulations governing critical areas such as land tenure and carbon rights.
Forestry's challenges however are not insurmountable. This is evidenced by a number of high-profile deals that were closed during the last few years and increasingly during 2009. We expect that the supply of forestry offsets will increase over the next years.
The complete report can be downloaded here (Registration required).
Source 2: http://www.environmentalleader.com/