Integrated REDD+: a financial model for forest protection and decarbonization by Brazil REDD Alliance
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It is hard to separate REDD's baseline-determination problems from the innovative proposal here. The idea has been tried before as well, with limited success. So, it is important to clarify what makes this now different. However, the proposal has the potential to create great impact, which is why there is now chance to lay out a clear roadmap for the next round. What is most appreciated is the adaptability of the authors to the anti-forest-carbon sentiment that dominates Europe (therefore the ETS). It is a difficult issue: low-marginal-cost emission reductions are so important (but politically hard in Europe), and getting REDD right without the perverse incentives is exceptionally hard. Judges argue if it is possible to incorporate a blind reverse-auction component to this plan. So, carbon-liable entity issues a Request For Proposals for a given emissions quantity and winning bidder country agrees to a standard baseline and monitoring methodology. If the plan is to only allow a quota of REDD into the market, REDD units don't need to be traded like the rest of the market. Judges then question if it could work outside the trading market on bilateral contracts that can offset up to a share of the liability.
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