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REDD as a Catalyst to Drive Sustainable Land UseF orests are the lifeline of our civilisation, especially in the tropics. Tropical forests contain over half of the world's terrestrial biodiversity. They provide vital ecosys-tem services that sustain climate, water, food and energy security as well as human health and liveli-hoods from villages to mega cities. But these services have so far been unrewarded in policy and financial frameworks, making tropical forests worth more dead than alive.The annual value of services provided by forests is beyond price. It is time we implemented mechanisms that woud protect forests and reward them for their exstensive ecosystem services. One such mechanism is REDD (reducing emissions from deforestation and forest degradation) which has been discussed and de-signed over the past few years. It is a promising mech-anism that could provide substantial funding needed to protect threatend forests. But key questions to cre-ate a functioning REDD system remain: How to fi-nance it? What level of social and environmental safe-guards are appropriate and how should they be checked? How to set forest emissions reference levels, and how to proof the resulting actions to cut emis-sions?COP17 in Durban has left the forest carbon sector, hoping for significant progress towards an operational global REDD mechanism, with mixed results. A sec-ond commitment period for the Kyoto Protocol has been agreed to start from 2013, buying time whilst a wider agreement is negotiated. This agreement on a new treaty can be seen as the policy win. For the first time, all countries including the big developing coun-try emitters China and India have signed up to deliver an agreement binding them to reduce their emissions.This matters for forests. An overarching global cli-mate agreement is needed to create the demand at scale for REDD assets. The scope for emissions re-duction from preserving and restoring forests within the overall global mitigation effort depends on deliv-ering such a treaty, scheduled to be finalised by 2015 and take effect in 2020. Only this would deliver firm reduction targets for countries and the role for REDD credits in meeting those targets. But, big question-marks remain as to how exactly REDD would fit into such an umbrella treaty - a situation which will cause uncertainty for investors and project developers for several years.Regarding REDD progress specifically, many of the technical challenges to implementing a robust REDD system are steadily being resolved, according to one of the most respected organisation in this sector - the Center for International Forestry Research (CI-FOR). However, good work towards appropriate safe-guards for forest communities has been undermined with a weak agreement on reporting safeguards per-formance, whilst the major issue of financing was ef-fectively set back another year. All funding options remain on the table including markets and private capital. Without their contribution funding will not scale to the billions needed every year to curb defor-estation within two decades. Realistically, what is hap-pening under the UNFCCC is far from what is needed to keep global warming below the 2 degree limit that science calls for, and it could be well 2020 before REDD is fully operating. So what should we do?REDD has political momentum, funds, an emerging structure and a lot of projects already on the ground. Waiting for an agreement under the UN to save for-ests in time rather seems futile. We cannot watch forests being destroyed for another decade. So the real challenge is to find a way to accelerate funding Pictured: Alexander Zang, Michael SahmAlexander Zang, Executive Board Member, Forest Carbon Group AG Michael Sahm, Director, Public Relations, Forest Carbon Group AG078 FORESTS

" The development of national and regional compliance schemes will see growing demand for forest carbon assets "for forests now, a means of spending it wisely, and promoting forests as a vital natural capital. This mes-sage and the following ideas the Forest Carbon Group is trying to convey to influential players in politics, business and civil society.Beyond the UN processWith a global compliance market that accepts REDD credits looking unlikely before 2020, parallel pro-cesses with multiple or bilateral deals should be forged. The development of national and regional compliance schemes will see growing demand for for-est carbon assets, particularly in Australia, California and Quebec.  All eyes will be on the frontrunners such as California and their counterparts in tropical coun-tries, states or provinces such as Brazil and Mexico, which will increasingly define REDD outside the UN process. In Europe, where the EU emissions trading scheme rules out forest carbon credits so far, national governments could move forward unilaterally and cre-ate REDD credits purchase programmes.Beyond treesTo increase the chances of forest protection, we will need to push towards more landscape-level approach-es to forest and land-use based carbon projects. While development banks, donor countries and policy advo-cates have lamented "silo-isation" in the carbon mar-ket universe for years, we should develop practical methodologies for integrating climate friendly agricul-ture, agroforestry, and forestry in carbon projects.Beyond carbonThe beauty of REDD is its multiple benefits. We ob-serve that a growing number of companies that want to invest in carbon projects and purchase carbon credits prefer the bigger story and benefits these pro-jects offer rather than "the carbon neutrality" and emissions reduction aspects. Conserving biodiversity, maintaining ecosystem services, promoting local de-velopment, and alleviating poverty are the issues businesses want to be associated with. Certainly, car-bon is and remains the "currency" to pay for this. Moreover, carbon finance through REDD can poten-tially trigger other income streams for local communi-ties. For example, restoring mangroves helps fish stocks to recover, cash crops like coffee and cocoa can grow under a forest canopy.Building strategic alliances with industry leadersAs stated above, funding for forest protection needs the private sector's engagement. So we looked at the business landscape in Germany and found that the energy industry, besides its huge impact on climate change, offered a significant potential and climate mitigation could become a business model for utility companies. Why? Liberalisation, re-structuring, the shift to renewables, regionalisation, and the phasing-out of nuclear energy are currently re-shaping the German energy market. That means traditional busi-ness models have to be reconsidered. In HSE - one of the leading regional utility companies in Germany that has also established a nationwide operating green energy supplier, we found a forward thinking partner. It developed a business model that improves differentiation, customer loyalty, value crea-tion and, at the same time, responded to climate change. Sustainability has become a driving factor behind broadening the value chain - from energy ef-ficiency consultancy, green electricity and gas prod-ucts to carbon offsetting of products and the com-pany's own emissions through forest carbon projects. Now, after pioneering the market, around half of Ger-man utility companies have followed HSE's example and also offer carbon neutral gas.But all these steps and initiatives are not enough. REDD and the carbon market are not, as often seen, the magic bullet to stop deforestation. They are more of an important catalyst among several to drive sus-tainable land use and agriculture. It is necessary to encourage - through multiple economical incentives - markets for sustainable products like soy, timber, palmoil, and beef in order to transform the economics behind. For this to happen, all of us will have to change our consumer behaviour. nAbout the AuthorsAlexander Zang is Executive Board Member of the Forest Carbon Group AG. Mr Zang is a shareholder of BCC, Business Communications Consulting GmbH, a consultancy firm based in Frankfurt am Main, Ger-many, which specialises in strategic communica-tions. As a director of the Forest Carbon Group AG, he is responsible for product development and sales. In the past few years he has focused on sustainability strategies in the energy and cleantech sectors, car-bon footprinting and related issues.Michael Sahm is Director of Public Relations at the Carbon Forest Group. Mr Sahm is a journalist, author and communications consultant with more than a decade of experience in radio, print media and public relations. Throughout his professional work he has been covering issues of environmental protection and climate change as well as energy and development. He has always been interested in making complex issues, such as climate protection, comprehensible and accessible to a broader public. FORESTS 079