On the Road to International Climate Agreement: Next Stop, Ghana

This post is by Gustavo Silva-Chávez, an international policy analyst in the Climate and Air program at Environmental Defense Fund.

Last December, a team from Environmental Defense Fund attended climate change negotiations in Bali – an annual meeting of some 190 countries. Next week, we’re headed to Accra, Ghana for another round of talks. These meetings, along with other talks this year and next, are part of an international negotiation process that will conclude in Copenhagen in late 2009.

The goal is to put the world on a path to avoid dangerous climate change. As part of this effort, EDF is working to encourage full participation of the United States, all other developed countries, and all major developing countries. The findings, recommendations and negotiated text coming out of these interim meetings will form the basic structure of the Copenhagen deal.

Deforestation was a major topic at the Bali conference, and one of the best things to come of that conference was a path towards ending deforestation in developing countries. Deforestation accounts for 20 percent of annual greenhouse gas emissions worldwide, and is the largest source of emissions from developing countries.

The Ghana meeting is important because, for the first time, we will take an in-depth look at how this would work – how we can channel money to developing countries that reduce emissions from deforestation, and where this money would come from.

Money can come from both market and non-market sources, and we think both are essential. Non-market sources include Official Development Assistance (ODA) and voluntary contributions from developed countries to a deforestation fund. The market-based approach that EDF has long advocated is called Compensated Reduction (CR).

The concept behind CR is simple: Any nation that reduces deforestation below a baseline (derived from historical deforestation rates) would receive emissions allowances that could be traded in the global carbon market – i.e., the market would pay them to reduce emissions. CR gives developing countries an incentive to reduce deforestation on a voluntary basis. Plus, by focusing on a nation’s entire forest system rather than individual projects, it avoids the loopholes that hindered consensus in the past.

EDF also plans to present another innovative approach – this one to reduce greenhouse gas emissions from developing countries that don’t have significant forests. Called Clean Investment Budgets (CIBs), it’s an alternative to the problematic Clean Development Mechanism (CDM). I’ll explain how it works in my next post.