Commentary

On fair, effective and efficient REDD mechanism design

Michael Obersteiner¹ , Michael Huettner^2,3 , Florian Kraxner¹ , Ian McCallum¹ , Kentaro Aoki¹ , Hannes Böttcher¹ , Steffen Fritz¹ , Mykola Gusti¹ , Petr Havlik¹ , Georg Kindermann¹ , Ewald Rametsteiner¹ and Belinda Reyers⁴

¹  International Institute for Applied Systems Analysis, Schlossplatz 1, Laxenburg, Austria

²  Max-Planck-Institute for Biogeochemistry, Hans-Knoll-Str 10, 07745 Jena, Germany

³  Friedrich-Schiller-University Jena, GSBC-EIC 'The Economics of Innovative Change', Carl-Zeiss-Str 3, 07743 Jena, Germany

⁴  The Council for Scientific and Industrial Research, Meiring Naudé Road, Brummeria, Pretoria, South Africa

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Carbon Balance and Management 2009, 4:11doi:10.1186/1750-0680-4-11

Published:	27 November 2009

Abstract

The issues surrounding 'Reduced Emissions from Deforestation and Forest Degradation' (REDD) have become a major component of continuing negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). This paper aims to address two key requirements of any potential REDD mechanism: first, the generation of measurable, reportable and verifiable (MRV) REDD credits; and secondly, the sustainable and efficient provision of emission reductions under a robust financing regime.

To ensure the supply of MRV credits, we advocate the establishment of an 'International Emission Reference Scenario Coordination Centre' (IERSCC). The IERSCC would act as a global clearing house for harmonized data to be used in implementing reference level methodologies. It would be tasked with the collection, reporting and subsequent processing of earth observation, deforestation- and degradation driver information in a globally consistent manner. The IERSCC would also assist, coordinate and supervise the computation of national reference scenarios according to rules negotiated under the UNFCCC. To overcome the threats of "market flooding" on the one hand and insufficient economic incentives for REDD on the other hand, we suggest an 'International Investment Reserve' (IIR) as REDD financing framework. In order to distribute the resources of the IIR we propose adopting an auctioning mechanism.

Auctioning not only reveals the true emission reduction costs, but might also allow for incentivizing the protection of biodiversity and socio-economic values. The introduced concepts will be vital to ensure robustness, environmental integrity and economic efficiency of the future REDD mechanism.