The position of Sweden and EU on REDD

1. The position of Sweden and EU on REDD Erik Eriksson International Climate Policy Section Swedish Energy Agency

2. Background • Deforestation accounts for about 20% of global greenhouse gas emissions. • No incentives in the 1st commitment period of the Kyoto Protocol to avoid tropical deforestation and forest degradation. • Important to include REDD in a future regim.

3. Some challenges • Allocation of money. • Avoiding leakage. • Uncertainties in measurements. • Securing of co-benefits. • Sustainable forest management • Biodiversity • Alleviating poverty • The rights of indigenous peoples and local communities

4. General • Tropical deforestation should be reduced by at least 50% by 2020 compared to current levels, and the global forest cover loss should be halted by 2030 at the latest. • Important also to promote the role of conservation, sustainable forest management and enhancement of forest carbon stock. • Necessary to address national circumstances since avoided emissions from deforestation and forest degradation could increase pressure on countries where forest carbon stocks are relatively stable. • Any agreement should be based on national level accounting.

5. General • A REDD mechanism should be performance-based and provided on the basis of verified results in terms of avoided emissions • A REDD mechanism need to address co-benefits such as conserving biodiversity and of the rights of indigenous peoples and local communities.

6. Financing REDD • Avoiding deforestation is often a cost-effective way of reducing greenhouse gas emissions. • Financing of avoided deforestationshould be a part of the overall financial package, taking into account existing arrangements. • There is aneed to engage the private sector to allocatesufficient and predictablefunding. • Technical and financial support from developed countries are necessary for e.g. capacity building.

7. Financing REDD • Three main options on the table: • Market-based approach • would allow developing countries that reduce their emissions from deforestationand forest degradation below a pre-determined baseline to generate carbon credits, which they could sell. • Fund-based approach • would rely on voluntary or institutionalized contributions to a fund from developed country governments and other sources. • Combination of the options above.

8. Financing REDD • Concerns using a pure market-based approach: • Maythreaten the stability on the carbon market. • A price floor, limited supply or increased demand could reduce this risk. • Create a separate market for REDD (dual-market approach). • Concerns using a pure fund-based approach: • What actions should be promoted? • Insufficient and unsustainable levels of funding.

9. Financing REDD • Most Parties would like to some kind of marked-based mechanism for REDD. • EU believes that a combination of a fund-based and a market-based system is necessary: • public funding will be necessary for e.g. readiness work and capacity-building. • a linkage to the market is necessary for scaling up the financial needs.

10. Co-benefits • The effective implementation of REDD in a future climate agreement will depend on the involvement and cooperation of local communities and indigenous peoples. • Multi-stakeholder processes • Involvement in monitoring and measuring • Important to consider biodiversity when implementingREDD actions.

11. Finally • REDD is still in a positive mode… • …but REDD has strong impact on overall mitigation and finance, and may not be allowed to run in advance.

12. Thank you!