The 21st Century climate challenge

3Avoiding dangerous climate change: strategies for mitigationThe rehabilitation of severelydegraded grasslands,and the conversion ofdegraded croplands toforests and agroforestrysystems, can also buildcarbon storage capacityInternational cooperation on climatechange alone cannot resolve the wider problemsdriving deforestation. Respect for the humanrights of indigenous people, the protection ofbiodiversity and conservation are issues fornational political debate. However, the worldis losing an opportunity to join up the climatechange mitigation agenda with a range of widerhuman development benefits. Internationalcooperation in the context of the post-2012Kyoto commitment period could help to createincentives to unlock these benefits.Filling the gapsThe current Kyoto Protocol suffers from anumber of shortcomings as a frameworkfor addressing the greenhouse gas emissionsassociated with land-use changes. There issignificant potential for creating triple benefitsfrom climate change mitigation, to adaptationand sustainable development. However,existing mechanisms limit the possibility ofharnessing carbon finance as a mechanism forsustainable development.Deforestation does not figure in thecurrent Kyoto Protocol beyond a very limitedprovision to support ‘afforestation’ through theCDM. The rules of the CDM place a 1 percentcap on the share of carbon credits that can begenerated through land use, land-use changeand forestry, effectively de-linking activities inthis sector from the climate change mitigationagenda. The Protocol does not allow developingcountries to create emission reductions fromavoided deforestation, limiting opportunitiesfor transfers of carbon finance. Nor does itestablish any financing mechanisms throughwhich developed countries might provideincentives against deforestation.Forests are the most visible ecologicalresource written out of the script for internationalcooperation on mitigation. But, they are notthe only such resource. Carbon is also stored insoil and biomass. The rehabilitation of severelydegraded grasslands, and the conversion ofdegraded croplands to forests and agroforestrysystems, can also build carbon storage capacity.Because the environmental degradation of soilsis both a cause and an effect of poverty, tappinginto carbon finance for these purposes couldunlock multiple benefits. These include anincreased flow of finance into environmentalsustainability, support for more resilientlivelihood systems in the face of climate change,and benefits for climate change mitigation.Several innovative proposals have beendeveloped to address the gaps in the currentKyoto approach. The Coalition of RainforestNations, led by Costa Rica and Papua NewGuinea, has argued for ‘avoided deforestation’ tobe brought into the Kyoto framework, openingthe door to the use of CDM credits. Broadly,the idea is that every hectare of forest thatwould have been cut down but is left standing isa contribution to climate change mitigation. Ifincorporated into a CDM-type arrangement, thiswould open the door to potentially large flowsof finance to countries with standing forests. Aproposal tabled by Brazil sets out an alternativeapproach. This calls for the provision of new andadditional resources for developing countries thatvoluntarily reduce their greenhouse gas emissionsthrough reduced deforestation. However, underthe Brazilian proposal the reductions would notregister as developed country mitigation credits.Others have called for a revision of CDM rulesto allow for an increased flow of carbon financeinto soil regeneration and grassland restoration(box 3.12).Proposals such as these merit serious consideration.The limitations of carbon marketsas a vehicle for avoiding deforestation have tobe recognized. Serious governance issues are atstake. ‘Avoided deforestation’ is clearly a sourceof mitigation. However, any standing rainforestis a potential candidate for classification as‘avoided deforestation’. Using trend rates fordeforestation activity does not help resolve theproblem of quantifying commitments, partlybecause information on trends is imperfect;and partly because changes in reference yearscan produce very big shifts in results. Otherconcerns, widely voiced during the last round ofKyoto negotiations, also have to be addressed. Ifavoided deforestation were integrated into theCDM without clear quantified limits, the sheervolume of CO 2credits could swamp carbon markets,leading to a collapse in prices. Moreover,160 HUMAN DEVELOPMENT REPORT 2007/2008