UN-REDD Programme

The idea of linking sustainable forest management to the market economy for addressing climate change was first introduced in the 1990s. It promised to raise substantial additional finance for protecting critical forests and to change the way forests are managed and linked to the wider economy. The Voluntary Carbon Market (VCM) has been part of the international forestry dialogue for well over a decade now. What lessons can we learn from it that could be relevant for REDD+? 

 The recent , explores potential risks and issues associated with an international forest briefing note by the Rainforest Foundation carbon market. They draw on the lessons from the forestry VCM and extrapolate how these lessons may pose risks for a REDD+ mechanism that relies on market transactions.

 As highlighted by the briefing note, the forestry VCM has been affected by the current global financial instability because it relies on a similar trading infrastructure as commodities markets, for which lack of regulation has been so damaging. Investment has dipped, along with prices, and actors in the VCM have become aware of the risk of holding carbon credits that no one wants to buy. Demand has grown for VCM projects accredited to robust standards. Transactions in a REDD+ mechanism, however, will be tightly regulated from the start, due to the Measurement, Reporting and Verification (MRV) requirements that are a central part of the ongoing negotiations under the UNFCCC.

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