Indonesia has finalised some of the rules to govern carbon market payments for forest preservation, the first country to do so.
The so-called REDD initiative aims to reduce the alarming rates of tropical rainforest destruction by paying forest communities not to cut them down and to actively protect them. The idea is that developed world governments or companies would pay for forest protection and earn carbon credits that could count toward their greenhouse emissions obligations. Up to 20 per cent of global emissions are estimated to come from deforestation.
Indonesia’s new laws include the establishment of a national commission to approve avoided deforestation projects under a set of regulations governing the type of forest areas that are eligible, and how international investors can work with local participants.
What hasn’t been decided yet are rules on the financial aspects of the system. These include how payments might be shared between parties and how much the Indonesian government would demand in revenue from projects under a tax or licensing system.
It’s still not clear to what degree Indonesia’s REDD rules will dovetail with the UN global REDD initiative. Last month the country’s forestry minister MS Kaban was quoted as saying Indonesia might go its own way with REDD in the voluntary carbon market rather than fit in with a UN scheme.
The UN REDD initiative is only entering the pilot stage with a fully detailed scheme yet to be drawn up. The UN wants a REDD scheme agreed by all nations as part of a new global climate treaty to follow the Kyoto Protocol from 2013.
Up to 20 REDD projects are thought to be in the pipeline in Indonesia, all eyeing the voluntary carbon market.
Reuters 8/5/09
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