Forest carbon has been ostracized by the world’s largest carbon markets

“Forest carbon has been ostracized by the world’s largest carbon
markets – those in the European Union,” said Bayon, co-founder and
partner of merchant bank EKO Asset Management Partners, which invests
in new and emerging markets for such environmental commodities as
carbon, water and biodiversity. “But that will change.” U.S. carbon
markets, which have been slower to emerge than those in the EU, have,
however, embraced forestry, he said, noting that several states
already have developed emissions cap-and-trade systems that rely on
land use, land-use change, and forestry (LULUCF) projects to reduce
greenhouse-gas emissions. “California is a bellwether,” said Bayon,
speaking at ImageTree Corporation’s headquarters and live via the Web
at the third and last event of this year’s ImageTree Idea Leadership
Series.

“Not only is forestry not the ugly duckling in California;
but, in fact, it also is currently the preferred carbon-offset
mechanism, largely because other offsetting methodologies are still
being approved, and I expect other states to follow California’s lead
in developing forestry carbon projects,” he said. “Carbon markets have
gained popularity around the globe as natural resources have become
less plentiful and, therefore, more valuable,” continued Bayon.
“Because we don’t pay for natural resources, we use too much and
there’s no money to invest in maintenance; but this will change and
world markets will decide the value of ecosystem services.” Bayon
added that the markets are also likely to compensate countries for
Reducing Emissions from Deforestation and forest Degradation (REDD),
as the Kyoto Protocol, which sets binding targets for reducing
emissions of carbon dioxide and greenhouse gases in industrialized
countries, draws to a close in three years. “REDD is firming up as
part of the international compliance carbon market agenda,” he said.
The major sticking points with REDD, Bayon said, are additionality
(where planned carbon reductions would not have occurred without the
additional incentive provided by emission reduction credits) and
leakage (where there’s an increase in emissions in one area as another
area introduces a strict emissions policy). Countries can address the
latter “by measuring forests at the national level, thereby minimizing
intracountry leakage, and/or by using technology, such as remote
sensing,” he said. “The future of REDD is tricky and politically
risky, but it’s hopeful.”
http://www.enertorial.com/2008/12/23/the-role-of-forest-carbon-in-emerging-ecomarkets-will-be-significant/

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