Investments in a U.N. plan to halt deforestation could suffer as U.N. climate talks in Warsaw have failed to agree rules to guarantee the rights of indigenous peoples and to protect local biodiversity, observers said.
The program, called REDD (Reducing Emissions from Deforestation and Forest Degradation
), help slow climate change since deforestation accounts for nearly a fifth of the world's greenhouse gas emissions. Forests soak up carbon dioxide as they grow and release it when they burn or rot.
REDD has already attracted significant funds from early movers who have invested in forestry protection schemes, some in the hope of gaining carbon credits that might later be traded in schemes set up to reduce industrial emissions, even though the final rules for the program have not yet been negotiated.
The Norwegian government has invested $1.4 billion in countries such as Brazil, Guyana and Indonesia, while multilateral institutions like the World Bank and the Global Environment Facility and a number of private investors are getting involved.
But observer groups in Warsaw, where delegates from 190 nations are negotiating further regulations for REDD, say weak safeguards might damage the scheme's credibility and scare off potential investors.
A text stating when host countries must report on how they are safeguarding the livelihoods of indigenous people and biological diversity is unclear and non-binding, they say.
“The lack of reporting rules creates a situation where a country might benefit from results-based payments without providing assurance that the results being paid for are sustainable,” said Kathleen Rutherford with Pivot Point, one of the green groups tracking the talks.
The rules are needed to ensure that well meaning projects do not end up hurting indigenous people, for example by preventing them pursuing legitimate economic interests, or damaging the environment by things such as fast-growing tree plantations that do are not suitable for the local wildlife.
The text might be reopened for negotiations next week, but due to the conference's heavy workload this was considered unlikely by several negotiators speaking to Reuters.
“Ideally we would have liked the reporting rules to be clearer and stronger, but it is important to achieve some progress [in Warsaw],” Aslak Brun, Norway's chief negotiator at the talks, said.
But it would be in countries' own interest to not take advantage of soft reporting rules, he said: “Reporting every four years is too seldom to unlock large investments, but host countries may report more often if they realize it puts them in a situation where they will receive more funds.”
“Reporting is ... fundamental because land use projects are long-term in nature and, for finance to continue to flow, investors and funders need to be reassured that project outcomes are sustainable,” said Adrian Rimmer, CEO of the Gold Standard Foundation, a certification standard for carbon projects.