Solving the Climate Puzzle The Crucial Role of Compensated

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					ENVIRONMENTAL DEFENSE


      Solving the Climate Puzzle:
          The Crucial Role of
      Compensated Reduction of
        Tropical Deforestation
              Annie Petsonk, International Counsel
              apetsonk@environmentaldefense.org
ENVIRONMENTAL DEFENSE



          Topics to be covered
  • Big picture: Where do global emissions need
    to go, and how can Compensated Reduction
    of Tropical Deforestation (“CR”) help?
  • Case Study: Brazil
  • Outlook: If Compensated Reduction
    Moves Forward – and If It Doesn’t


                              Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




             The Big Picture




                        Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




                        Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




   Miami


                        Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




                        Tropical Forests’ Crucial Role
        ENVIRONMENTAL DEFENSE

                    Global Emissions: Business-as-Usual Forecast Compared to Emissions
                       Pathways for Limiting Warming to 2 Degrees and 2.5 Degrees C.
             80


             70
                           2°C: 1.5% decline/yr

             60
                           2.5°C: 1.5% decline/yr

             50
Gt CO2e/yr




             40


             30


             20


             10


             0
             1990   1995    2000      2005      2010   2015   2020   2025   2030   2035   2040   2045   2050


                                                                       Tropical Forests’ Crucial Role
       ENVIRONMENTAL DEFENSE

                             Global Emissions: Business-as-Usual Forecast by Region
             80
                         Emissions from Trop. Def.
                         Developing Countries
             70
                         OECD & Trans. Economies
                         2°C: 1.5% decline/yr
             60          2.5°C: 1.5% decline/yr


             50
Gt CO2e/yr




             40


             30


             20


             10


              0
               1990   1995    2000     2005       2010   2015   2020   2025   2030   2035   2040   2045   2050

                                                                         Tropical Forests’ Crucial Role
    ENVIRONMENTAL DEFENSE

                        Total Emissions: US-CAP Enacted 2008; US Starts 2013; China/India Start 2018
                   80
                             Emissions from Trop. Def.
                   70        Rest of Developing Countries
                             China & India
                             Rest of OECD & Trans. Economies
                   60        United States
                             2°C: 1.5% decline/yr
G t C O 2 e /y r




                   50

                   40

                   30

                   20

                   10

                    0
                    1990   1995    2000     2005      2010     2015   2020   2025 2030 2035 2040 2045 2050
                                                                               Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




                        Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE


                  Compensated Reduction of Deforestation:
    Reductions 2008-2012 would be compensated in the Post- 2012 Carbon Market


   30000
                                                                       Reduction of
                Baseline: 20.000 km2                                   Deforestation
   25000
   20000

   15000
   10000                                                                               Post-2012 Carbon
                                                                                            Market
    5000




                  08

                  09

                  10

                  11

                  12
                   9

                   0

                   1

           92 92



                   5

                   6

                   7

                   8

                   9

                   0

                   1

                   2
                  **
                   *
                /8

                /9

                /9




                /9

                /9

                /9

                /9

                /9

                /0

                /0

                /0
           8




                /




              20

              20

              20

              20

              20
               4
        /8
             88

             89

             90

             91



             94

             95

             96

             97

             98

             99

             00

             01
             /9
      77




                                                     % reduction of deforestation = ~ 5%
               Source: INPE 2003, IPAM
                                                     Avoided Emission: mean of 12 Million Tons C/yr
               * Decade mean
               ** Biennium mean                       Reductions in deforestation 2008-2012 would be
                                                      compensated in the post-2012 Carbon Market

     Ref: Tropical Deforestation & Climate Change, Moutinho & Schwartzman, eds. (IPAM 2005)

                                                                  Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




             Case Study: Brazil

   The New Zero Deforestation Pact




                         Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE

   The launching of the Pact at the National
           Congress Oct 3rd, 2007




                                      Marina Silva,
                                      Amapá, Mato
                                      Grosso,
                                      Amazonas &
                            Tropical Forests’ Crucial Role
                                      Acre
 ENVIRONMENTAL DEFENSE
Remaining Forests




     Forest
                         Indigenous r.
     Deforested
                         Int. protection
     Non-forest
                         Sustainable use
                         Military
Cattle Net P. Value
 ENVIRONMENTAL DEFENSE   (2007-2037)




     U$ 900



     U$ 0
ENVIRONMENTAL DEFENSE




     Outlook: If Compensated
     Reduction Moves Forward
         – and If It Doesn’t



                        Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE


                       Outlook
  • Compensated Reduction of Deforestation
     – Old problems of baselines, additionality, leakage,
       permanence have been addressed: national
       baselines, satellite monitoring, carbon insurance
     – CR a top-tier issue for Bali climate treaty talks
     – Developing countries signaling interest in joining
       carbon markets




                                      Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE

           CR Tons: Impact On
             Carbon Markets
  • Marginal Cost, Carbon Supply, Carbon
    Demand, and Market Prices
  • Latest Research
  • “Crowding Out”: Price Caps vs. Supply
    Increases


                          Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE



             Outlook, Cont’d.
  • Tropical Forest Tons Crucial Bridge to Low-
    Carbon Future
  • ACSA (Lieberman-Warner bill) opens narrow
    channel
  • Broader channel urgently needed
  • If we don’t save the forests, they will
    disappear – with potentially catastrophic
    impacts on the climate

                                Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




                        Tropical Forests’ Crucial Role
ENVIRONMENTAL DEFENSE




                 For more information:

          www.environmentaldefense.org/CR

         apetsonk@environmentaldefense.org

                        202-387-3500


                                 Tropical Forests’ Crucial Role
               ENVIRONMENTAL DEFENSE

                                                   Global Emissions (1990-2050)
                   60.0



                   50.0
                                                                  If a project can earn
                   40.0
                                                                  credits by reducing
                                                                  emissions below
G t C O 2 e /y r




                   30.0                                           Business-as-Usual in an
                                                                  uncapped developing
                   20.0                                           country…

                   10.0                              …and if industrialized country
                            Non-Annex I BAU
                            Annex I w/reductions
                                                     emissions are capped…
                    0.0

                     1990   1995       2000 2005    2010   2015   2020 2025   2030   2035   2040 2045   2050
                                                                         Tropical Forests’ Crucial Role
               ENVIRONMENTAL DEFENSE

                                                   Global Emissions (1990-2050)
                   60.0



                   50.0
                                                                     . . . then trading the
                                                                     credits lets the
                   40.0
                                                                     capped nation’s
G t C O 2 e /y r




                   30.0
                                                                     emissions increase,
                                                                     with no reduction in
                   20.0                                              global emissions.

                   10.0
                            Non-Annex I BAU
                            Annex I w/reductions
                    0.0

                     1990   1995       2000 2005    2010   2015   2020 2025   2030   2035   2040 2045   2050
                                                                         Tropical Forests’ Crucial Role
               ENVIRONMENTAL DEFENSE

                                                   Global Emissions (1990-2050)
                   60.0



                   50.0
                                                                  Applying a mandatory
                                                                  multiplier to transfers
                   40.0
                                                                  of credits from
G t C O 2 e /y r




                   30.0
                                                                  uncapped countries,
                                                                  e.g., a requirement
                   20.0                                           that two tons be
                                                                  tendered for every ton
                   10.0                                           of credit used. . .
                            Non-Annex I BAU
                            Annex I w/reductions
                    0.0

                     1990   1995       2000 2005    2010   2015   2020 2025   2030   2035   2040 2045   2050
                                                                         Tropical Forests’ Crucial Role
               ENVIRONMENTAL DEFENSE

                                                   Global Emissions (1990-2050)
                   60.0



                   50.0                                            . . . and retiring the
                                                                   additional credits,
                   40.0
                                                                   boosts the likelihood
G t C O 2 e /y r




                                                                   that trading with
                   30.0
                                                                   uncapped nations
                   20.0
                                                                   yields a global benefit.

                   10.0
                            Non-Annex I BAU
                            Annex I w/reductions
                    0.0

                     1990   1995       2000 2005    2010   2015   2020 2025   2030   2035   2040 2045   2050
                                                                         Tropical Forests’ Crucial Role