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Editor's Note: This article was published originally by the Ecosystem Marketplace and is reprinted with permission.
The Copenhagen Accord may have disappointed many of us, but it also yielded agreement on the need to develop financing mechanisms for reducing greenhouse gas emissions from deforestation and forest degradation (REDD). For REDD to work, however, investors will have to be on board – and for that to happen, the forestry markets will have to become more transparent and trustworthy.
To promote that transparency and trustworthiness, Ecosystem Marketplace spent the past year speaking with more than 100 market participants -- 65 of whom develop forest protection and restoration projects, primarily in rainforest nations, and 37 of whom act as intermediaries. These participants accounted for 230 projects generating credits across 40 countries over the past 20 years.
The result is "State of the Forest Carbon Markets 2009: Taking Root & Branching Out" (pdf), which has been released with support from the World Bank BioCarbon Fund, Biological Capital, Ecosystem Restoration Associates and Baker McKenzie, as well as funding from the United States Agency for International Development (USAID), the David and Lucile Packard Foundation, the Norwegian Agency for Development Cooperation, the United Kingdom’s Department for International Development and the Surdna Foundation.
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Respondents documented the impact of carbon finance on more than two million hectares of forests over the past 20 years. That impact has resulted in the capture of nearly 70 million tonnes of carbon (MtCO2) in trees -- although the bulk of this can be attributed to one massive project in the early 1990s that captured 47 MtCO2.
The findings also indicate substantial shifts in growth patterns over the past three years, during which these markets have matured substantially.
From 2007 through the first half of 2009 alone, forest carbon markets have funneled roughly $100 million into forestry conservation projects around the world, transacting 20.8 million MtCO2 in the process. In dollar terms, this period represents 67 percent of the market value of all forest carbon offsets, due to higher volumes and prices associated with emerging interest in the voluntary carbon markets overall, along with maturing standards and infrastructure.
