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could have adverse consequences for biodiversity if<br />
deforestation/degradation were displaced from an area<br />
with low biodiversity value to one with higher value. In<br />
general, national level emissions accounting is better<br />
able to account for international leakage than sub-national<br />
and/or project level accounting 11 .<br />
Another important question about REDD relates to<br />
‘additionality’ i.e. achieving emission reductions<br />
that are additional to what would have occurred<br />
under the business-as-usual scenario and how<br />
protected areas (PAs) are treated within this context.<br />
Some high carbon/high biodiversity ecosystems may<br />
be located in legally-defined PAs, giving the impression<br />
that the carbon they store is safe and that they<br />
would not offer additional sequestration benefits.<br />
While this is true for well-managed PAs, many sites<br />
remain vulnerable to degradation through encroachment,<br />
poaching and other illegal activities (Leverington<br />
et al. 2008). This reflects inter alia the significant<br />
financing gap that exists for many PAs across the<br />
world (see Chapter 8).<br />
Ensuring carbon additionality will depend on whether<br />
and how REDD finance is extended to PAs. About<br />
312 Gt of terrestrial carbon is currently stored in the<br />
existing PA network: if lost to the atmosphere, this<br />
would be equivalent to approximately 23 times the<br />
total global anthropogenic carbon emissions for 2004<br />
(Kapos et al. 2008). Targeting REDD funding at PAs<br />
at risk of degradation/deforestation or which have potential<br />
for improved ecological status – rather than at<br />
‘safe’ PAs – could yield both high carbon and biodiversity<br />
benefits.<br />
GROSS VS NET DEFORESTATION RATES<br />
REWARDING BENEFITS THROUGH PAYMENTS AND MARKETS<br />
Another issue under negotiation is whether gross<br />
or net deforestation rates will be considered when estimating<br />
emission reductions 12 . From a climate perspective,<br />
the most relevant figure is what the<br />
atmosphere actually experiences (the rationale for using<br />
net values). However, the use of net rates could hide<br />
the loss of mature (i.e. primary and modified natural)<br />
forests and their replacement with areas of new forest,<br />
either in situ or elsewhere. This could result in significant<br />
losses in biodiversity (sCBD 2008).<br />
REDD FINANCING<br />
There are three prevailing positions on how REDD<br />
financing could be generated 13 . These have different<br />
implications for how biodiversity co-benefits could be<br />
promoted and which stakeholders would be involved<br />
in decision-making processes.<br />
Market-based approaches: If REDD were financed<br />
via the regulated international carbon market, credits<br />
would need to be fungible (interchangeable) with existing<br />
Assigned Amount Units (AAUs) under the Kyoto<br />
market 14 . The unit of exchange would be tonnes of<br />
carbon equivalents (tCO 2 e). Demand for credits would<br />
be generated by the carbon market which would drive<br />
investment towards the least-cost mitigation options<br />
(subject to any restrictions that governments might<br />
place on market access for REDD credits). Given their<br />
ability to engage the private sector, market-based<br />
approaches to REDD are likely to mobilise higher levels<br />
of sustainable and long-term financing, leading to<br />
larger areas of conserved forests and larger biodiversity<br />
co-benefits.<br />
Fund-based approaches: Another approach is to<br />
mobilise REDD finance via inter alia voluntary contributions<br />
(ODA), auctioning assigned amount units<br />
(AAUs) in the carbon market and earmarking (part of)<br />
these revenues or revenues from other fees, fines and<br />
taxes. In general, fund-based approaches can be designed<br />
to disburse REDD finance based on any objectives<br />
and criteria established by donor (and host)<br />
countries. Whereas carbon market financing is tied<br />
to delivering emission reductions, fund-based approaches<br />
could be used not only to finance such reductions<br />
but also to support capacity-building needs<br />
in developing countries to make REDD operational.<br />
They may also target biodiversity co-benefits or<br />
be designed to target biodiversity benefits directly.<br />
However, the way in which funds are generated may<br />
have implications for how they are disbursed (see Karousakis<br />
2009). In general, fund-based approaches<br />
are likely to deliver lower volumes of REDD finance<br />
over the long-run.<br />
Phased approaches: More recently, a phased<br />
approach to REDD finance has been proposed that<br />
combines market and fund-based approaches. The<br />
<strong>TEEB</strong> FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 5: PAGE 26