Commodifying carbon to reduce deforestation: lessons from New Zealand

Working and discussion papers
November 2010
Gary Cox and Leo Peskett

There has been a wealth of research and discussion around the implementation of REDD+ programmes (reducing emissions from deforestation and forest degradation) under the United Nations Framework Convention on Climate Change (UNFCCC) over the past three years. This is, at least in part, because carbon emissions from tropical deforestation and degradation contribute up to 18% of global carbon emissions.

Another reason for the growing interest in REDD+ is, however, its potential to create new international incentive mechanisms, possibly linked to carbon markets, which would finance the reduction of emissions. Whilst this area does show great potential, there are also significant challenges in developing effective incentive systems that will achieve reductions efficiently while protecting forest dependent communities against new risks. One of the major issues raised by REDD+ incentive systems, particularly in relation to carbon markets, surrounds who holds the property rights over the carbon ‘credits’ that are generated through REDD+ activities.

This Background Note examines the experience of Aotearoa/New Zealand – Aotearoa being the Maori name for New Zealand – in establishing carbon rights linked to its emissions trading system (ETS), and highlights lessons for developing countries grappling with REDD+.

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