U.S. climate policy could help save rainforests:
An interview with Jeff Horowitz,
Founding Partner of Avoided Deforestation Partners
Rhett Butler, mongabay.com
May 14, 2008
In an interview with mongabay.com, Jeff Horowitz of the Berkeley-based Avoided Deforestation Partners argues that U.S. policy initiatives could serve as a catalyst for the emergence and growth of a carbon credits market for forest conservation.
REDD or Reducing Emissions from Deforestation and Degradation is a proposed policy mechanism that would compensate tropical countries for safeguarding their forests. Because deforestation accounts for around a fifth of global greenhouse gas emissions, efforts to reduce deforestation can help fight climate change. Forest protection also offers ancillary benefits like the preservation of ecosystem services, biodiversity, and a homeland for indigenous people.
"The rational economic choice at the local level must be to keep the trees rather than burn them or chop them down," Horowitz said. "Achieving this fundamental shift will require more than a top down REDD system. It will require all relevant parties at the local, regional, national and international levels to work together with a greater degree of cooperation than ever before. But, we are very optimistic because it ultimately is in all of the parties' self interest to do so. In order for everyone to get their fair share they all have to perform. That is the beauty of using a market system."
REDD: a policy-driven market
Horowitz says that while there is a lot of enthusiasm for REDD, there are still a number of hurdles to overcome. Because REDD will be a policy-driven market, getting the proper policy in place will be key to making the concept a reality.
"Policy is definitely the key. But it will either provide the catalyst for REDD or prevent REDD from being a meaningful part of the climate change solution," Horowitz said. "We need to get the policy right to ensure REDD plays the role it should. Bali was a key moment for REDD. Now, the U.S. is playing the critical role."
"Simply put, policy-driven markets require clear, long-term policy to attract capital at scale. REDD is meaningless unless we have scale."
Despite the present lack of U.S. climate policy, Horowitz is hopeful that lawmakers will see the virtues of REDD for reducing greenhouse gas emissions.
"We are especially optimistic that in the near term the U.S. Congress will recognize the urgency of REDD and take the action that is necessary to prevent irreplaceable rainforests from continuing to be destroyed," he said. "We hope we have that policy signal in place soon."
Speaking at the gathering, Horowitz said that U.S. leadership on REDD could spur global action on deforestation on climate.
"If we get this right, U.S. lawmakers have an extraordinary opportunity to lead the way and create climate policies that significantly reduce emissions from deforestation in developing countries. Such leadership could help make saving a tropical forest more valuable than its destruction, yielding substantial economic, social and environmental benefits at both the local and global levels."
AN INTERVIEW WITH JEFF HOROWITZ
Mongabay: What inspired you to shift from a career as an architect to helping promote REDD as a U.S. policy response to climate change?
Jeff Horowitz: In addition to having had the privilege of directing large-scale urban planning projects in many countries, I was the founding director of Urbanists International, a non-profit organization that provided pro bono urban planning and economic development services to developing countries. Through my experiences with UI, I was engaged in shaping land use planning policies on a national level with many government and private sector counterparts. In all cases our exchanges were a full collaboration, the conversations respectful and included the full range of stakeholders. The results were quite successful.
Mongabay: What needs to be done to improve the market for REDD? Does it all boil down to policy? If so, what is being done to drive policymakers toward being more receptive to REDD?
Jeff Horowitz: Policy is definitely the key. But it will either provide the catalyst for REDD or prevent REDD from being a meaningful part of the climate change solution. We need to get the policy right to ensure REDD plays the role it should. Bali was a key moment for REDD. Now, the U.S. is playing the critical role. As both forest preservation advocates and large GHG emitters descend on Washington, the key message of the virtues of including REDD in the U.S. scheme from both groups is beginning to take hold. The challenges now are to ensure REDD stays on the table and to increase its role proportionate to deforestation's contribution to the climate crisis.
Mongabay: Are you optimistic that U.S. policymakers will eventually support REDD as an effective mechanism for fighting climate change?
Mongabay: Given that REDD credits are limited to voluntary markets, they trade at a discount to other credits at present. Do you think we'll see a premium for REDD credits? In other words, a premium market for carbon credits linked to biodiversity conservation and other ecosystem services or is forest carbon just another commodity?
Jeff Horowitz: If you compare REDD credits to EUAs, there is a significant price difference, but if you compare forestry related VERs against tCERs under Kyoto, the VERs command a higher price. The problem is that the wrong policy can do more harm than good. By creating a temporary credit for forestry, the COP under the Kyoto Protocol created a devalued asset with the forestry credit and it has been a failure. The key going forward is to learn from that mistake and properly value the REDD (and other forestry) credits in the policy design. REDD may be deserving of a premium for non-carbon reasons, but it should at least be on a level playing field with other GHG credits in respect of carbon.
Mongabay: Do you see REDD clearing a path for other ecosystem payments like water?
Jeff Horowitz: REDD does not always lead the way on ecosystem payments. There are ongoing initiatives and early market activities around the other environmental markets, such as wetlands mitigation banking, water quality and endangered species habitat. Whichever market leads, we hope there is a new economic paradigm that finally stops treating the services provided by our natural systems as "externalities" or valueless. That being said, in my view, REDD should serve as a broad umbrella for ecosystem services. The carbon stored in trees is clearly only one part of the overall ecosystem.
Mongabay: Are you hopeful that REDD can be implemented on the kind of scale that would be needed to save tropical forests? Will REDD alone offer the kind of returns that will make it viable relative to other forms of land use?
Jeff Horowitz: Yes, very much so. Markets can make a profound difference. Just the word or rumor of a market has an immediate effect. What we need to do is harness the power of the market in a different direction. The rational economic choice at the local level must be to keep the trees rather than burn them or chop them down. Achieving this fundamental shift will require more than a top down REDD system. It will require all relevant parties at the local, regional, national and international levels to work together with a greater degree of cooperation than ever before. But, we are very optimistic because it ultimately is in all of the parties' self interest to do so. In order for everyone to get their fair share they all have to perform. That is the beauty of using a market system.
Mongabay: REDD discussions can be quite contentious. What are some of the hot button issues?
Mongabay: Have you seen much investor interest in REDD or are carbon buyers still frightened off by what is essentially a policy-driven market?
Mongabay: How can the general public help your efforts?
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