Tuesday, September 8, 2009
This story is quite important. Everyone realizes the importance of engaging the private sector, but rules for REDD projects will be needed at the national level. As this story and example show, REDD rules (particularly around carbon rights and benefit sharing) will take some time to develop. In the meantime, investors continue to be frustrated. This large new class of assets is likely to come on-line in both US and UNFCCC legislation. But without clear guidance on how private monies can be leveraged for conservation, it is likely that there will be continued enthusiasm, but little skin-in-the-game for private-financed REDD emission reductions. It should be noted that most other developing countries with substantial rates of deforestation are not as far along the process as Indonesia. Some countries essentially prohibited pre-compliant REDD projects from taking off.