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Lessons from carbon markets for designing an effective REDD architecture

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  • TILL NEEFF
  • FRANCISCO ASCUI

Abstract

Consideration of incentives for reducing emissions from deforestation and forest degradation (REDD) is now formally part of the post-2012 climate change negotiations. A significant amount of financing will be required to make REDD a success, but the design of the REDD architecture can determine the availability of capital. Therefore, in negotiations this should be considered at the same time and on an equal basis with methodological and political considerations. Detailed consideration is given to the type of commitment, the financing mechanism, the level of incentive allocation, and the fungibility of carbon credits, in the context of experience from existing carbon markets. We conclude that a financially successful REDD mechanism would be based on a strong regulatory framework with mandatory targets, market-based, with some degree of project-level crediting, creating fungible REDD credits, subject to a cap.

Suggested Citation

  • Till Neeff & Francisco Ascui, 2009. "Lessons from carbon markets for designing an effective REDD architecture," Climate Policy, Taylor & Francis Journals, vol. 9(3), pages 306-315, May.
    • Handle: RePEc:taf:tcpoxx:v:9:y:2009:i:3:p:306-315
    DOI: 10.3763/cpol.2008.0584
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    1. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2008," World Bank Publications - Reports 13405, The World Bank Group.
    2. repec:wbk:wboper:13404 is not listed on IDEAS
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    Cited by:

    1. Cuckston, Thomas, 2018. "Creating financial value for tropical forests by disentangling people from nature," Accounting forum, Elsevier, vol. 42(3), pages 219-234.
    2. Bhatnagar, S. & Sharma, D., 2022. "Evolution of green finance and its enablers: A bibliometric analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    3. Delacote, Philippe & Palmer, Charles & Bakkegaard, Riyong Kim & Thorsen, Bo Jellesmark, 2014. "Unveiling information on opportunity costs in REDD: Who obtains the surplus when policy objectives differ?," Resource and Energy Economics, Elsevier, vol. 36(2), pages 508-527.
    4. Palmer, Charles, 2011. "Property rights and liability for deforestation under REDD+: Implications for 'permanence' in policy design," Ecological Economics, Elsevier, vol. 70(4), pages 571-576, February.
    5. Wang, Haibing & Zheng, Tianhang & Sun, Weiqing & Khan, Muhammad Qasim, 2023. "Research on the pricing strategy of park electric vehicle agent considering carbon trading," Applied Energy, Elsevier, vol. 340(C).
    6. Izquierdo-Tort, Santiago & Ortiz-Rosas, Fiorella & Vázquez-Cisneros, Paola Angélica, 2019. "‘Partial’ participation in Payments for Environmental Services (PES): Land enrolment and forest loss in the Mexican Lacandona Rainforest," Land Use Policy, Elsevier, vol. 87(C).
    7. Andrew Macintosh, 2012. "The Australia clause and REDD: a cautionary tale," Climatic Change, Springer, vol. 112(2), pages 169-188, May.

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