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Deforestation Solutions

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					Climate Change Solutions
 Avoided Deforestation:
Between Policy and Practice

        Jeffrey Horowitz
          Founding Partner
 Avoided Deforestation Partners.org
            Senior Advisor
    Equator Environmental. LLC
          BRUSSELS, BELGIUM
           October 24-25, 2007
RESPECTING INDIGENOUS PEOPLES
    …and the local communities
  Policy discussions must engage and integrate
    views of the stakeholders on the ground




  AD efforts will not succeed unless local social
     and livelihood issues are addressed…
     Magnitude of the Markets:
Avoided Deforestation / 5-10 billion US
• Mitigating deforestation of the 8 countries that account
  for 70% of the problem represents a market of $5-10
  billion US per year or more…

Options:
• The World Bank: Forest Carbon Partnership Facility: latest initiative
  represents a a total of $300 million US in two tranches..

• Governments: Under the Global Environment Facility, the Industrial
  Countries pledged US $3.1 Billion over 5 years… for all world-wide
  environmental problems.

• Private Sector: $30 Billion US of Carbon Credits (Current
  Prices) were traded under the Kyoto Protocol and the EU ETS
  in 2006 alone.
              Carbon Fund Growth:
  Extraordinary amounts of capital on sidelines

     2001                       2007

                              58 Funds
                                $12 B
    4 funds
    $337M                  Global Exposure
                           Public, Private,
                             Financial
                             Investors



12 new funds launched beginning of 2007 alone..
      PRIVATE SECTOR INCENTIVES:
        Controlling Investment Risks
• Include private sector as team
   member to assist in: process, protecting
   forests, generating credits.

• Investment insulation needed from
  sovereign performance and credit risks.

• Consequences for not meeting
  obligations should be shared.

• Government approvals must be
  transparent and timely.
      PRIVATE SECTOR INCENTIVES:
       Reviewing Investment Rewards
• Examine options for payback of steep
 upfront project costs.

• Assess overall IRR in terms of what is
appropriate relative to risks.

• Create transparent and equitable
project revenue sharing plan for all
parties, especially local communities

• Review strategy options for making
credits fungible with other sectors.
             PARTNERS APPROACH:
              No forests left behind…
It is only a matter of time before all forests are threatened. In order to
mitigate international leakage, all high and low deforestation forests
must be protected through options that are best for the countries
involved. .
           PARTNERS APPROACH:
                20/20 Vision
If land use change represents 20% of the problem, shouldn’t
    there be incentives to have forestry 20% of the solution?
             PARTNERS APPROACH:
                 General Goals
• Respect sovereign government authority
• Create Global Teams: Governments, Private Sector, NGOs, Communities
• Encourage early action: we are at the tipping point
• Inspire policy to make saving forests more profitable than other options…
AN AMERICAN PERSPECTIVE:
    Lieberman - Warner Bill

   FOREST CARBON PRINCIPLES

        •   Cap-and-trade
        •   60-80% reductions by mid-century
        •   Fully Fungible Credits
        •   Broad benefits to environment
        •   Quality credits: real, verifiable, reliable
        •   Accounting for leakage
        •   Domestic and international forests
   BUSINESS CREATED THE PROBLEM:
The same forces can be harnessed to turn it around..
                               business save forests in
                        • Having
                        exchange for turning a profit is a
                        SUSTAINABLE concept worth pursuing.

                        •Major companies see going green as
                        “win win” scenario..

                        • Companies are working with
                        Governments and NGO groups as
                        serious partners.

                        • COMPANIES ARE ON THE
                        SIDELINES WAITING FOR THE RULES

 Major US Companies are ready to buy ecosystem credits
   if the rules are reasonable, the risks manageable…
           It is not about greed:
It is about saving ecosystems and communities…

                 • Practical policy strategies

                 • “Imperfect” tools, for a limited time…

                 • Jumpstarting mitigation measures.

                 • Not a substitute for need to control
                 emissions at their source…

         Time is not on our side…..
EVERYONE CAN GET INVOLVED:
    Think globally - act locally




             (Wife and dog)
              got trees?




The question our children will be asking…
                                   MISSION

Recognizing that climate change is the defining issue of our time and that
forestry currently represent the largest potential source for cost-effective carbon
emissions reductions, Avoided Deforestation Partners works to harness market
forces toward halting tropical deforestation through innovative public and
private sector partnerships. The future of the world’s forests will ultimately be
decided by land-use decisions. Accordingly, our goal is to advocate practical
policy solutions for carbon finance that maximize both global and national
benefits while improving the lives of indigenous communities on the ground.
Thank you…