Listen to Durban Debrief Part One

Listen to Durban Debrief Part Two

Listen Durban Debrief Part Three

Listen to Durban Debrief Part Four

Listen to Durban Debrief Part Five

It was standing room only at this week's DC Durban Debrief event, co-hosted by local carbon contemplators Ecosystem Marketplace, Climate Focus and McGuireWoods LLP. Over 75 DC market players turned up to get the first-hand scoop about the 17th Conference of Parties from those who staked out the COP in person.

The panel of three distinguished experts (Henry Derwent, President and CEO of the IETA; Bob O'Sullivan, Executive Director of Climate Focus; and David Antonioli, CEO of VCS) was moderated by Ecosystem Marketplace's very own Director, Kate Hamilton. There was a great showing of the DC carbon community, including financial institutions, multilaterals, the State Department, project developers and NGOs.

The audience heard a report from Durban punctuated with insights on COP 17's implications for the carbon marketplaces, and then had a chance to delve deeper into the practical challenges for the carbon community on the roadmap to 2020.

Derwent received nods from around the room when he explained that although it was heartening that politicians took steps forward, it did not shift actual demand for credits or project developers' ability to attract new investment.

"The price of any of the units which are bought and sold in the markets really didn't blink," Derwent noted.

Another update from Durban that drew interest from the market-savvy crowd was the new ground broken on REDD+ finance - where Durban saw agreement around the possibility of using market-based approaches to support "results-based action", but there remains a lack of clarity around what these approaches might look like.

Will sub-national activities also be supported by markets, and will bilateral financing be recognized under the UNFCCC? And how might these relate to the possibility of linking units generated through market mechanisms under the UNFCCC to future commitments under the Kyoto Protocol?

Our panelists reflected that very little thinking has probably gone into answering these questions. Ahem.

REDD finance's uncertain trajectory is perhaps deepened by the stark, long road toward a post-2020 Kyoto agreement. Before then, it's expected that many REDD countries will have already entered into the results-based payments phase - but without binding targets, there might not be demand for the credits generated. For many, the checkmate period between now and 2020 may appear to have left countries floundering at the mercy of a new Kyoto regime.

Yet, this abyss has spurred action amongst the emerging economies, Antonioli countered. He noted that countries that did not have strong positions pre-Durban--China, Brazil, South Africa, just to name a few--are beginning to have a growing presence in the carbon world.

These players are creating individual markets on local soil that, although fragmented and segregated at the moment, provide options for new projects in agriculture and forestry while international processes catch up.

Chile and Costa Rica are also starting to explore the voluntary market. The development of domestic markets is brand new, however, and some fear that domestic markets in emerging economies may not generate sufficient demand to support local or national programs. Still, Antonioli said, countries recognize the potential of the carbon marketplace, and are venturing into the possibilities as hopeful participants.

But can these segregated markets survive? Can domestic markets be integrated at the global scale and be allowed to flourish amongst the big boys of the global community? To avoid the dominance of a top-down arrangement that might drown out these markets, as the panel suggested, standardization is critical.

Having strong, common standards for projects across the board can offer the security that those from developing markets have the right structure for and compatibility with the larger carbon world. And for these markets to scale up, they have to be transparent and consistent in their program rules for topics like additionality.

Derwent brought all of these conversations home in his response to a question from the floor on what needs to happen in order for REDD to work: "Demand, demand, demand." Without global binding agreements, he explained, there will only be a slackened demand that will undoubtedly disappoint all market players - including the hopeful new kids on the block.

Panelists noted that even with Durban's positive news for the marketplace, sinking carbon prices did not flicker an inch - and that all eyes are now cast on 2020, with hopes that in the final hour negotiators will (hopefully) finally blink.

10 December 2011 | DURBAN | 0617 GMT | Market mechanisms have made it through to the high-level session, according to EDF's Gustavo A. Silva-Chávez, who has seen a copy of the text that LCA agreed to early Saturday morning. Text says that the LCA "considers that, in the light of the experience gained from current and future demonstration activities, appropriate market-based approaches."

An official version is expected to be posted shortly.

The text now goes to the COP, which will begin deliberations at 9am local time (0700 GMT)

9 December 2011 | DURBAN | 1940 GMT | The formal negotiations for these texts have wrapped for the night, but bilateral and ndabo talks continue.

9 December 2011 | DURBAN | 1830 GMT |
REDD: LCA Negotiators are still locked in a closed-door session that also considers elements of KP (the "ndabo"). The text reportedly pushes all major decisions to COP 18 and contains vague commitments beyond 2012. Our sources say it has the backing of developed countries, while developing countries are pushing for a more concrete proposal.

9 December 2011 | DURBAN | 1730 GMT |
REDD: The text that's almost on the table going into the home stretch here in Durban has been narrowed from more than five REDD finance options down to one - and Ecosystem Marketplace is privy to an under the table look at the results of some last minute compromise.

Results-based approaches are at the top of the list, a big sticking point for US and some other countries' support of REDD+.

Regarding compromise language, unconfirmed countries put forth the text "...market based approaches could be developed by the COP," to which Australia and Japan added the word "...including" ("...market based approaches could be developed, [including] by the COP").

The word "including" is one a few words still bracketed - so is the question of the level of MRV accountability ("...ensuring environmental integrity, requirements for robust [national] measurement, reporting and verification are met...").

Observers speculate as to whether the addition of "including" opens up finance to market based approaches outside of the COP or just more firmly reiterates its restriction to the COP. Considering the source of the addition - Japan, which has already bilaterally supported REDD+ feasibility-stage projects outside of the COP - it's highly likely that the former is the case.

Despite NGOs' continued concerns about social and environmental safeguards in the near-term text, one observer says that "despite this, countries still feel it is appropriate to give a signal that carbon markets could be suitable funding for REDD in the future."

Indeed, the text makes reference to a wide range of funding options, including market to non-market (fund-) based, bilateral and multilateral and alternative sources. As a caveat, though, you can reasonably expect some minor changes to the above text before it's all said and done.

9 December 2011 | DURBAN | 1700 GMT |
LULUCF: The text that is prospectively going to ministers (still unseen outside of closed door sessions) leaves a few issues unresolved - issues that will likely be retained as bargaining chips for broader Kyoto Protocol debates.

Will Annex I countries set their reference levels according to projected scenarios or decide to revert back to rules for the first commitment period? The latter option would continue to allow countries to "opt in" to accounting for emissions from managed forests and crop and grazing land.

The former could enable them to establish scenarios that allow for large emissions increases in national inventories with potentially little consequence.

Another question is whether or not they will require Annex I countries to account for both wetlands drainage and rewetting. There's been discussion around allowing countries to only report wetlands draining but not include it in national inventories - meaning that they may have incentive to restore wetlands, but not to avoid draining them in the first place if they opt to not account for these emissions.

Wetlands and managed forest sectors account for around 1 billion tCO2e annually.

When talk turned to a topic list for the technical paper, several parties - scores by one count - began loading it with their own pet projects, at which point chaos ensued.

Though a heavily bracketed REDD text was expected in the morning, no text had yet been released at 1830 Durban time.

All of this depends, of course, on the presence of a Kyoto successor - and parties comment that there's no obvious choice emerging among the existing proposals. Members of the French delegation and others report to Ecosystem Marketplace that right now it seems unlikely that a "gap" solution can be agreed upon in Durban that would prevent Kyoto from expiring without a replacement.

Members of the AWG-KP are currently reviewing provisional fixes in case there's no timely comprehensive solution.

REDD: For REDD to work, the market needs clear guidance on how to establish reference levels, but the UN text is often incomprehensible to those outside the process -- and even to those of us who are tangential to it, not to mention negotiators themselves. That's why the Meridian Institute published "2011 Guidelines for REDD+ Reference Levels: Principles and Recommendations" in November. On Monday, they held a side event to shed light on the debate over reference levels and on the decisions we highlighted in yesterday's blog.

Commissioned by the Norwegian government, the report is part of a collection of reports that is meant to "support and inform UNFCCC negotiators and other stakeholders in the process of building an international REDD+ mechanism," according to Hans Brattskar, the Ambassador of Norway's Climate and Forest Initiative.

It certainly seemed to, from the author's comments as well as Tony La Viña's assessment. "I think the report and its previous earlier versions contributed to unpack all of this for the negotiators such that by the time we were actually in Durban, many of the negotiators had actually mastered or knew how to talk about this," says Levina, the facilitator of the SBSTA REDD+ Contact group, referring to the technical issues of reference levels.

The report was developed by expert authors that the Meridian Institute convened; these authors then went through a consultation process with other experts. As the project leader Dan Zarin said in the side event, these reports were meant to aid SBSTA in responding to the request embedded in Annex 2 of the Cancun agreements to develop modalities for REDD+ reference levels and reference emission levels at COP17.

However, as Zarin quickly pointed out, there is no official definition of reference level or reference emission level in an adopted UNFCCC text. For the report, reference emission level refers to levels of deforestation and degradation whereas the term reference level refers to these as well as sustainable management of forests, conservation and enhancement of carbon stocks.

There were many similarities between the decision and the report;s ideas on reference levels. For example, Doug Boucher said that both documents use the same basic definition for REDD+ Reference Levels: they are business as usual baselines, developed using historic data and adjusted for national circumstances, against which emissions are compared.

To develop these reference levels, the report recommended that SBSTA take a cue from IPCC and use their basic reporting principles. SBSTA listened, and included 4 out of 5: transparency, completeness, consistency and accuracy. Though they left out comparability, it was not for lack of discussion says Boucher.

La Viña seconded that, saying that a longer discussion was needed around that issue in the next SBSTA meeting.

One area that remains open for interpretation is the decision's recommendation on the scope of REDD+ Reference Levels. The report recommended that SBSTA use IPCC's basic categories of land use transitions: Conversion of forests to other lands; Emissions from and removals by forests remaining as forests and other lands that are converted to forests. However, Boucher says the negotiations did not clarify whether these would be used as the different categories for reference levels.

Boucher thinks that SBSTA should agree to use these IPCC categories because they are simple and straight-forward. In addition, the IPCC has extensive guidance on how to estimate emissions and removals for these categories, he says.

Beyond recommendations, the report also included guidelines for how governments should develop reference levels. Both the SBSTA decision and the report emphasized that definitions were a key step for developing reference levels. These would include, according to Sandra Brown, what percentage of canopy cover is considered a forest, the scope of activities and the pools included, the time frame for historic levels, and whether it will initially be within a national or subnational scope.

Within the SBSTA decision, it is clear that countries need to have clear definitions of pools including explanations for pools they were excluding. However, the time frame for historic levels was not mentioned.

Definitions are especially important because many countries transitioning to a national REDD+ system will have to integrate various sub-national strategies. This means, as Valerie Merckx pointed out, these sub-national strategies must follow the same steps as reference levels at the national level.

Regardless of what type of reference level they are creating, Brown thinks that countries should determine the type of data needed and then look to see if any existing data can be used - rather than simply trying to harmonize that existing data to create a reference level. Though countries might be skeptical of this approach, Brown thinks it will help for the future. "Eventually you are going to have to collect this kind of data as you move forward under a monitoring plan, therefore why not learn by doing it on the historical period?," says Brown. "This is an opportunity to actually develop the capacity while you are learning how to do it."

Another key part of reference level discussion is the need for adjusting according to national circumstances. "We concluded that case-by-case adjustments should be supported by robust and verifiable empirical data," says Brown. "Basically if you look at the SBSTA decision, that is basically what it is more or less suggesting. It is done on a country by country basis where they have to make the case for what their adjustments would be--they have to be credible, they have to be justifiable and they have to be transparent."

The adoption of a reference level and any adjustments will be approved through an outside technical assessment. The report and the SBSTA decision are in agreement that the procedure for reference levels adoption is that countries will submit preliminary reference levels and issues will be discussed after a preliminary review, according to Merckx.

There is still plenty in the report that SBSTA will need to talk about at their next meeting.

For example, Merckx says that there will be a need to focus on the criteria of the technical assessment.

Though he sees the hook for later discussion, Boucher also sees the need for SBSTA to continue to work on how the technical assessment is going to work: who will do it? What information will they consider? How will it be reported? To whom? And what happens next?

A wave of optimism rolled through Forest Day on Sunday in Durban, as Tony La Viña, facilitator of the SBSTA REDD+ Contact group, offered an optimistic assessment of the SBSTA decision - one that several agreed.

"This is the best REDD+ decision to come out of this process since the Bali Action Plan, albeit in a world of much lower expectations," says John-O Niles, Director of the Tropical Forest Group.

Others, however, say the text offers more of the same.

"The new text fails to do what it is supposed to do," says Joerg Seifert-Granzin, an economist who advises the Katoomba Incubator. "It was supposed to provide guidance on how to establish emission levels, but it only repeats things that have already been agreed on."

He points out that a previous text, issued on December 1, offered precise guidance on a range of technical issues, including a clear definition of which national circumstances would be considered for establishing emission levels, and which would not. The current draft merely states that different approaches can be used.

The decision also calls for consultations and expert meetings, but Seifert-Granzin points out that expert meetings were held last month, and they resulted in draft conclusions which were supposed to feed into this month's talks. Instead, they were simply alluded to but not considered.

Niles concedes the shortcomings, but says it's the best we could hope for under the circumstances.

"Basically, as a result of this, SBSTA, through a COP decision, will establish a process with fairly specific information about what the UNFCCC is looking for," he says. "They have established a review process but need guidance, and that will be done at SBSTA 37. We couldn't get any more here."

He says that the level of specificity is good enough that developing countries can begin moving forward.

"We have been asking developing countries to submit information on baselines and reference levels for years," he says. "Do you know how many reference levels have been submitted? Zero, because countries, up until now, didn't know what to submit to the UNFCCC . And up until this draft decision, they didn't know if the UNFCCC would do anything with the submitted reference levels."

"Now they have substantial and specific guidance on what information to submit. Data sets, methods, models, and assumptions should form reference level submissions and this information should be transparent, complete, and consistent because it will go through an independent technical assessment. And importantly, they know that their reference levels at that point are only proposed - they are not yet codified. This will encourage countries to submit reference levels that can pass a transparent review process."

We came in this morning expecting to top off a fairly optimistic curtain-raiser, but several other delegates are throwing a wrench into that assessment.

LULUCF:
Turning to the Kyoto Protocol track, LULUCF draft revisions are still ongoing. Of course, at this end of the ICC corridors, the biggest elephant in the room is the extension of the Kyoto Protocol.

Most conversations around LULUCF are taking place as if an extension can be achieved or - as one party points out - are assuming that most decisions made here will hold even if there is no extension or a gap in binding agreements.

"We've received legal opinions that everything about Kyoto except the legally binding targets can remain in force after 2012." But most observers we've spoken with expect that there will be an extension or stop-gap solution of some kind - albeit Europe-sized. Three options for a successor of some kind are emerging in the AWG-KP, though IISD says there's currently no consensus around any one option.

So what to watch coming out of LULUCF talks today (Monday)?

The spin off group looking at LULUCF under the Kyoto Protocol for developed countries meets this afternoon. As of Friday, no progress had been made regarding the Annex I "logging loopholes" that include allowing developed countries to "opt in" to accounting for forest management emissions and removals.

Currently, around half of EU countries have chosen to report managed forest emissions under Kyoto Protocol Article 3.4 - in most cases, coming from those countries that stand to benefit from reporting.

Convincing Annex I countries to account for all of their forestry activities region-wide and on a mandatory basis isn't an easy task. It's clear to observers that they will only capitulate if allowed to utilize projected reference levels as opposed to historical levels (ca. 1990).

In a nutshell, this means that rather than determine business as usual (BAU) according to historical or even current levels, some parties want to include future projected emissions in their calculation of BAU.

Because they also anticipate increasing their forest harvesting rates for the supply of bioenergy and other uses, setting BAU according to future levels accommodates an increasing rate of emissions. And if increasing emissions levels become BAU, this allows for increased emissions without consequence.

"The point of this conversation was to bring all those managed forest emissions onto the books," mused one observer. "However, the rules that developed countries have been developing would make forest management accounting mandatory while not bringing those emissions onto the books."

Right now, a few countries (mostly developing countries) are working to produce alternative text that does not include projected reference levels. Unfortunately, observers report that the issue has become a trading card in the larger discussion about the fate of the CDM and Protocol - i.e. let us have projected baselines or we'll just bow out of a second commitment period.

Observers expect that the "logging loophole" text will likely remain intact until it's passed onto ministers later this week.

Grab Bag: Highlights from Tony La Viña's Forest Day Update:
"I would have preferred a much more detailed guidance from the outset, but when I started looking at the content, the possible content and making it more detailed, I realized that we are flying blind into this. That there is very little experience of safeguards in the world that is directly related to REDD. And it is actually better if you have that experience first, before we detail the guidance. So I actually welcome this pace for a year, maybe even more, so that there is real experience on the ground so we know what kind of information really is needed to enforce the safeguards."

"I welcome this decision of SBSTA which actually says 'We will review what we have on the basis of consistency, comprehensiveness, effectiveness and transparency in the way the information around safeguards is provided. The work is cut out for is the next year to do that, but it is all in the spirit of advancing implementation."

"The real breakthrough, I think, as well in the SBSTA decision is the decision on reference levels. For a while there yesterday afternoon, we actually thought that there would be no agreement, simply because it is so technical, there is so much to be dealt with. We had a very big political issue around adjustment according to national circumstances which some of us are concerned about and can have impacts on environmental integrity. But we were able to sort it out and I feel quite happy with the results. At least it gives guidance in fact in how they will now construct reference levels. The more important thing for environmental integrity is that countries agree that they will be assessed, that their offer of what their forest reference levels or forest emission levels will be will undergo an assessment process..."

Several parties expressed outrage at Brazil's stance, and accused them of deliberately trying to sabotage talks.

"They had plenty of time to raise these issues," said one party. "Why bring it up now?"

Nils Hermann Ranum, of the Rainforest Foundation Norway, even speculated that Brazil was trying to sabotage REDD globally to benefit their own REDD market, which is fairly advanced.

This post will be updated throughout the day until we feel it’s complete enough to be upgraded from the status of blog post to article, at which point we will post it as a stand-alone article on Ecosystem Marketplace.  We will be in meetings throughout the morning, but hope to update this in the afternoon.  Feel free to check back, or – better yet – if you’re here at the COP and have additional insight, feel free to contact Steve Zwick at szwick@ecosystemmarketplace.com.  We are all ears.

A wave of optimism rolled through Forest Day on Sunday in Durban, as Tony La Viña, facilitator of the SBSTA REDD+ Contact group, offered an optimistic assessment of the SBSTA decision – one that several agreed.

“This is the best decision to come out of this process since the Bali Action Plan, and in a world of much lower expectations,” says John-O Niles, co-founder of the Tropical Forest Group.

Others, however, say the text offers more of the same.

“The new text fails to do what it is supposed to do,” says Joerg Seifert-Granzin, an economist who advises the Katoomba Incubator.  “It was supposed to provide guidance on how to establish emission levels, but it only repeats things that have already been agreed on.”

He points out that a previous text, issued on December 1, offered precise guidance on a range of technical issues, including a clear definition of which national circumstances would be considered for establishing emission levels, and which would not.  The current draft merely states that different approaches can be used.

The decision also calls for consultations and expert meetings, but Seifert-Granzin points out that expert meetings were held last month, and they resulted in draft conclusions which were supposed to feed into this month’s talks.  Instead, they were simply alluded to but not considered.

Niles concedes the shortcomings, but says it’s the best we could hope for under the circumstances.

“Basically, as a result of this, SBSTA, through a COP decision, will establish a process with very specific information about what they’re looking for,” he says. “They have established a review process but need guidance, and that will be done at SBSTA 37. We couldn’t get any more here.”

He says that the level of specificity is good enough that developing countries can begin moving forward. 

“We have been asking developing countries to submit information on baselines and reference levels for years,” he says. “Do you know how many have been submitted? Zero, because no one knows what to do.

They have the framework and the principles and so many details for what they have5to do.  They know it will go through an independent review, and that reference levels at that point are proposed – they are not theirs.

We came in this morning expecting to top off a fairly optimistic curtain-raiser, but several other delegates are throwing a wrench into that assessment.

Highlights from Tony La Viña’s Forest Day Update
“I would have preferred a much more detailed guidance from the outset, but when I started looking at the content, the possible content and making it more detailed, I realized that we are flying blind into this.  That there is very little experience of safeguards in the world that is directly related to REDD.  And it is actually better if you have that experience first, before we detail the guidance.   So I actually welcome this pace for a year, maybe even more, so that there is real experience on the ground so we know what kind of information really is needed to enforce the safeguards.” 

“I welcome this decision of SBSTA which actually says ‘We will review what we have on the basis of consistency, comprehensiveness, effectiveness and transparency in the way the information around safeguards is provided.  The work is cut out for is the next year to do that, but it is all in the spirit of advancing implementation.”

“The real breakthrough, I think, as well in the SBSTA decision is the decision on reference levels.  For a while there yesterday afternoon, we actually thought that there would be no agreement, simply because it is so technical, there is so much to be dealt with.  We had a very big political issue around adjustment according to national circumstances which some of us are concerned about and can have impacts on environmental integrity.  But we were able to sort it out and I feel quite happy with the results.  At least it gives guidance in fact in how they will now construct reference levels. 

4 December 2011 | DURBAN | 1900 GMT | Odd as it may seem, negotiators appear to have made stunning progress on both REDD and LULUCF. We're still checking a few things, and will post a full article early Monday morning.

3 December 2011 | DURBAN | 0900 GMT | Closed SBSTA talks went late into the night as negotiators reworked SBSTA language related to safeguards and reference levels after Brazil moved to push such talk back to the next SBSTA meeting. The most recent text, which came out Thursday morning, calls for the establishment of reference levels that can be adjusted in the future, but Brazil said it couldn't sign off on anything relating to reference levels until interlinked issues are dealt with - such as agreement on how to anticipate drivers of deforestation.

Several parties expressed outrage at Brazil's stance, and accused them of deliberately trying to sabotage talks.

"They had plenty of time to raise these issues," said one party. "Why do bring it up now?"

Nils Hermann Ranum, of the Rainforest Foundation Norway, even speculated that Brazil was trying to sabotage REDD globally to benefit their own REDD market, which is fairly advanced.

2 December 2011 | We had a dramatic day in Durban, with the SBSTA scientific sub-committee releasing a draft text on REDD+ that looked ready for Saturday's plenary despite vocal criticism from developing countries, especially on safeguards and reference levels, but was then quickly called back. It's now past 10pm, and the text is being redrafted almost paragraph by paragraph. We look for a complete redrafting of the sections on emission levels, and plenty of brackets on safeguards.

We'll offer a detailed analysis tomorrow.

Meanwhile, we had another interesting discussion with members of the Bolivian delegation on their new "Living Forests" offset proposal. It aims to harness money from the Green Climate Fund to support indigenous activities in support of the forests. The payments won't be market-based, but they would, by nature, have to be performance-based.

"It's not meant to replace REDD, but rather is something that can exist beside it," said one member of the delegation.

We've scheduled a meeting with the delegation tomorrow to get details, but given the late-night negotiations, it's possible that won't happen. Tomorrow should be a full day, with the new SBSTA draft and the LCA plenary. Stay tuned.

You'll find a detailed summary on the IISD web site, and a brief bullet-point list issues on the Ecosystem Climate Alliance web site.

Within SBSTA, the critical issue of how countries submit reference levels will be kicked down to an expert review.

"It's not dead; it's not gone away," says John-O Niles, who runs the Tropical Forest Group. "It's just not here now, but you can't get everything across the line at once."

He gave high marks to SBSTA co-chair Peter Graham for whittling an ungainly mass of conflicting opinions down to something that has a chance of maybe one day becoming something that has meaning.

"He did a really good job of taking this extraordinarily complex thing -- 100s of submissions with some of them running pages," Niles says. "He did a nice job of probably getting something that the delegates can pass for SBSTA which is what we work on, what a lot of people will work on this little level."

He adds that progress on reference levels, information systems, and safeguards was promising - but other groups felt the safeguards were being pushed to the side. We'll try and flesh this issue out as talks progress.

Bolivia, meanwhile, offered to deliver an alternative to REDD - something we hope to flesh out later today.

We also ran into Odigha Odigha in the halls, and he told us about a new "REDD University" that he's working on together with John Mason and NCRC. They've apparently gotten some funding from UNDP, UNEP, and FAO, and technical support from Brazlian NGO Idesam. Stay tuned for details on that as well.

The SBSTA contact group on methodological guidance met from 10:45am to 4:30pm to discuss guidance on reference levels, safeguards, and MRV, but details are slow to emerge. The afternoon session was open to observers, but conflicted with another meeting we were covering. Check back tomorrow for details on this one.

LULUCF

The session was closed, but delegates say talks focused on a few key issues - key among them being which types of inadvertent releases of carbon should be counted against national totals and which should not. At issue is whether to recognize emissions from a force majeure or just from any "disturbance", as is the case now. It's a critical issue, because the wording could determine whether only pure acts of nature are recognized, or whether acts of nature that were made possible by man will also be recognized. We had a great chat with Fred Heutte of the Sierra Club and Susanne Tol of Wetlands International on this, and will post a more detailed summary on the EM Durban page tomorrow.

Meanwhile, there's still no agreement on how to define a forest (critics say the current definition is too broad) and little discussion on how to deal with peatlands - which account for just .3 percent of the world's surface but are responsible for approximately 6 percent of global greenhouse gas emissions, according to Wetlands International.

The Ecosystem Marketplace team will be on-the-ground throughout the conference, bringing you daily blog updates on these discussions, as well as feature stories on the largest developments.

LULUCF: At the close of COP 16 in Cancun, the discussions around Land use, Land use-change and forestry (LULUCF)--a negotiating track focused on Annex 1 country (developed countries that joined the Kyoto protocol) future commitments under the Kyoto protocol--seemed to be regressing. Developing and developed countries could still not agree on the "logging loophole," which lets developed countries pick and chose which activities they will and will not include in accounting, such as forest management, cropland and grazing land management.

However, the negotiators did agree on one thing: each Annex 1 country would submit a forest management reference level to the secretariat. These levels could serve as baselines for LULUCF in the future and possibly inform a cap on developed countries use of forest management to meet emission reductions--a topic most likely to be debated this year.

Though these negotiations have previously focused on extending the Kyoto Protocol--set to expire next year--the focus at this year's COP will likely be what LULUCF will look like without Kyoto. The discussions are expected to include debates over the voluntary approach to LULUCF-related activities accounting and how much LULUCF activities will contribute to develop countries emissions targets going forward.

REDD: The Cancun agreements demonstrated that some progress was achieved through the COP negotiations when it came to REDD. Though there were no definite commitments, the need for REDD was made clear. For one, the agreements stated the need for national REDD system to prevent leakage with sub-national systems acceptable in the interim as countries get up to speed. Secondly, the agreements said that developed countries would be responsible for funding REDD, although the exact financing mechanism - market-based or otherwise - has yet to be established and will be another point for discussion in Durban. The agreements also renewed a commitment to social and environmental safeguards.

The issue of reference levels, and the related policy and technical issues of monitoring, reporting and verification (MRV), will be a central sticking point in negotiations, with the debate centering using on historic levels of deforestation versus expected emissions based on project reference levels. However, regardless of what happens at the negotiations, REDD+ and REDD readiness activities will continue to develop through the guidance of UN-REDD Programme, the Forest Carbon Partnership Facility and the REDD+ Partnership.

Grab Bag: Beyond REDD and the extension of Kyoto protocol, expect COP 17 to contain discussion on the Green Climate Fund and Nationally Appropriate Mitigation Activities (NAMAs). Established in the COP 16 negotiations, the Green Climate Fund will manage the parties' $100 billion commitment by 2020 to fund climate change mitigation and adaptation activities in developing countries. The COP discussions will focus on the structure and governance of fund as well as the source of the $100 billion.

NAMAs are a voluntary way to continue to make headway on remission reductions through a variety of approaches to emission reductions at sectoral levels. While this definition has been agreed on, negotiators in Durban will discuss what NAMAs will look like in practice. Ecofys got an early start on this discussion, offering a database that documents the existing variety of interpretations of NAMAs from around the world.

To make your life just a little easier in the run-up to COP17, Ecosystem Marketplace offers up this list of the COP 17 side events we'll be attending/covering/watching (ahem, NGO party!) through our news coverage and blog. We think you'll like them too - click on each day to see full event details.

This brief synopsis of some of the many outstanding events will take you to our Events calendar. There, we'll update you daily with the "must attends" as we find them during the conference. Feel free to contact us with any additional events you think would be of interest to EM readers.

Day 1 - 11/28/11
We'll just be hitting the Durban scene (and recovering from Archbishop Desmond Tutu's righteous climate rally the night before!) but may drop by the official Q&A with the Joint Implementation Supervisory Committee to pick their brains before the conference hits full swing.

Day 2 - 11/29/11
We will formally kick off our time in Durban by attending two UNFCCC Official Side Events (OSE). Today, you can explore enforcement, anti-corruption, monitoring tools, and Japanese bi-lateral cooperation on mitigation in developing countries - just maybe attendees can catch the latest on Japan's Bilateral Offset Credit Mechanism?

Day 3 - 11/30/11
Our lively hand-picked events for Day 3 focus on REDD+ from an 'on-the-ground' perspective. Events cover social and political issues, sub-national strategies, and social and environmental safeguards. The four side events we picked are all OSE, with one co-hosted by yours truly - our parent organization Forest Trends.

Day 4 - 12/1/11
Day 4 features a wealth of side events for fellow Durban-goers. Official side events revolve around the role of the private sector, while a workshop (Forest Trends again!) will get participants talking about community involvement.

Day 5 - 12/2/11
Day 5 is another busy day with many choices to burden the indecisive. We highlight a half-day conference on REDD+ in the Amazon (by CIFOR and Amazonas). Several OSE and IETA events covering Australia, social standards, trading systems, and professionalization are our other top picks.

Day 6 - 12/3/11
On this supremely busy Saturday in Durban, our choice events will be Agriculture and Rural Development Day (addressing climate change challenges by way of sustainable agriculture), followed by a stop by the World Climate Summit to hear what business leaders envision for the Future of the Carbon Markets. And Forest Trends hopes to entice you away from the ICC for an afternoon of South-South dialog on REDD+ and PES between Ecuador, Costa Rica and Mexico.

Day 7 - 12/4/11
On Day 7, CIFOR's Forest Day is jam-packed with forums on safeguards, Africa, and MRV, and a panel of influential leaders speaking on forests and climate change updates from a variety of perspectives. This day-long event will be punctuated by networking opportunities for the social butterflies among us.

Day 8 - 12/5/11
On Day 8, we get down to 'business,' by exploring private-sector opportunities, carbon market outlook and strategies, PoAs to NAMAs, and green investment schemes (all hosted by IETA). The biggest event on the books? An intergovernmental dialog between national governments and voluntary carbon market movers and shakers. We'll be there - will you?

Day 9 - 12/6/11
As (maybe?) the real "work" of the COP starts taking shape, Day 8 is a shorter day of side-events hosted by IETA. On this day, we will immerse ourselves in market linkages (EU ETS, RGGI, California, AU, NZ), the exciting world of nested REDD jurisdictional approaches and then later dive into the crystal-blue waters of the sub-national strategy in Mexico.

Day 10 - 12/7/11
Our selection of Day 10 OSEs includes discussions on SADC opportunities, the UN system for implementation, sustainable forest management, and sub-national approaches. Also, we have highlighted two IETA events on bilateral strategies and post-Kyoto protocol.

Day 11 - 12/8/11
On Day 11, the four OSE's we're looking at force audiences to ask themselves the tough questions: what have we accomplished with emissions reductions and what are the legal hurdles ahead? Also, we will take a close look at international carbon finance, from NAMAs to China and beyond.

Day 12 - 12/9/11
On the last day of the COP, as decisions or derision are in full swing in the official proceedings, we will wind down with three events and scale up our coverage of the final plenary. If you're not into the last minute flurry of negotiating, check out these events: one on the jurisdictional approach in Brazil, one on post-kyoto MRV approaches, and one on REDD+ safeguards and the Green Climate Fund.

Like all good things, our time enjoying Durban (including our time enjoying views of the Indian Ocean from the windows of our conference rooms) must come to an end.

We sincerely hope that this synopsis of our favorite COP 17 side events will help you plan your time in Durban! Best wishes for your last-minute pre-Durban preparations, and we look forward to seeing you at the conference.

To prove their mettle on that front, most Republican presidential candidates have vowed to gut the Environmental Protection Agency - a vow that sitting House members have already
started to make good on. Democrats have limply vowed to defend the agency - primarily on moral grounds.

Neither party really gets it right, because they both - at best - see environmental protection as something we should do - like a bit of housekeeping, say trimming the bushes - as opposed to something we must do - like shoring up the foundation, which is what it is.

Both parties, in short, seem oblivious to the fact that our economy depends on our ecology because everything we buy, sell, eat, and produce is derived from nature. If we destroy nature, we destroy our own livelihoods - as people living along the Mississippi River and its tributaries learned all too clearly this past Spring, when decades of poor wetland management exacerbated flooding and cost us billions.

If we don't protect nature, we lose more than just cuddly animals. We lose swamps that filter water and regulate flooding, as well as mangroves that protect our coasts, forests that clean our air, and scores of other living resources that deliver ecosystem services.

This is something that true fiscal conservatives have always understood, which is why they spearheaded the development of ecosystem markets that bring the true cost of environmental degradation into our economy. It was hunters frustrated by dwindling supplies of ducks who first began to advocate for wetland protection, and it was George H W Bush who championed and signed the first cap-and-trade mechanism as part of the Clean Air Act of 1990. That law put a cap on the amount of sulphur and nitrogen oxides (SOx and NOx) that industry can pump into the air, but it let the private sector identify the most efficient way of meeting that cap.

Then as now, right wingers went apoplectic - predicting everything from rolling blackouts to soaring energy costs to the end of the coal sector and a nationwide recession. Left wingers had the opposite fear - they believed industry would just "buy its way out" of its clean air obligations, and likened the permits to indulgences.

They were both wrong. The program helped cut acid rain in half over the last two decades, and at a cost of just $3 billion per year, which is more than 85% lower than industry projections. More importantly, it saved local communities more than $122 billion per year in reduced health costs and cleaner lakes and rivers, according to a study by the Journal of Environmental Management. That's $40 in savings for every $1 spent - although the EPA prefers the more conservative claim of $30 for every dollar spent.

Either way, the program worked, and it worked because it let government do what government does best, and it let the private sector do what the private sector does best. Specifically, it let government draw a clear and inviolable line above which emissions dare not rise, and it let the private sector find new and innovative ways of staying below that line, with a financial incentive for those who did the best job. This same principle drives cap-and-trade-like mechanisms that protect endangered species, promote the preservation of wetlands, and improve water quality. All of these mechanisms were successfully pioneered in the United States, and all have been taken up elsewhere.

These programs work because they promote responsible land stewardship in a way that is transparent, efficient, and effective - which is exactly what fiscal conservatives claim to want. They funnel money from consumers of ecosystem services to providers of ecosystem services - thus reducing the kind of foggy subsidies that fiscal conservatives claim to abhor.

These are the kinds of programs that environmentalists within the GOP should be championing, and such people do exist. Jim DiPeso appears to be one of them. He's the policy director of a group called Republicans for Environmental Protection, and he recently posted a list of the "10 Biggest Republican Environmental Accomplishments". Bush's Acid Rain Program, however, was not among them.

Sadly, the mainstream of the Republican Party seems more interested in abrogating the government's constitutional mandate to "promote the general welfare" than in finding fiscally responsible ways preserving our green infrastructure. If so, they need to abandon their slogan of "cut, cap, and balance" and replace it with something a bit more honest - like "slash, bash, and shirk".

Hanrahan explains that standards must apply for ICROA consideration and then go to great lengths to demonstrate that they meet ICROA's technical and commercial criteria. ACR spent the better part of a year making its case. "We've been talking to ACR, as we talk to other standards, for some time," Hanrahan says. "We've worked through a fairly rigorous process with ACR to get to this stage."

In the press release, Hanrahan also referenced "ACR's innovative methodologies in sectors such as agriculture and forestry," which most recently include ACR's first international methodology for projects that reduce emissions from deforestation and forest degradation (REDD).

An American in Paris?

So what does this mean for ACR - and the market generally?

As Hanrahan points out, it gives ICROA members access to another "domestic" US-based standard to sell in the US market, "because previously we've only been able to sell CRTs in the US market, of course." (That's Climate Reserve Tonnes - referenced fondly by some as "carrots" - generated under the Climate Action Reserve).

While some market observers are speculating that this might also open up a second operations base for selling ACR credits to European buyers, as well - perhaps not.

Some time ago, ICROA recognized CAR as eligible for use under its Code of Best Practice, but our State of the Voluntary Carbon Markets 2011 report found that only 2 percent of CRTs were sold to EU buyers. The rest? Almost entirely made and stayed in the good ole' US of A. One could easily expect that ACR supply/demand patterns will follow suit.

What it does for ACR is open the door to the ICROA retail market, which - if ICROA suppliers choose to use ACR credits - could mean higher prices for the credits overall and another outlet for ACR project developers to reach a brand new pool of buyers.

"When ICROA first started, we were a large part of the voluntary market - now we've very much grown our share of the market," Hanrahan points out. "So what that means is that now that very large portion of the market can be accessed by project developers."

The Battle of the Bests

ACR's long-awaited (and hard-won) acceptance under ICROA highlights the importance of third-party quality assurance to the voluntary carbon market. Hanrahan says this was part of the reason for the closure of another quality assurance program earlier this year - the UK Department of Energy and Climate Change's Quality Assurance Scheme (DECC QAS) for Carbon Offsetting.

"Essentially, they recognized that ICROA is now is in the market," he says, "and that the vast majority of the market is adhering to this independently verified code."

In May 2011, the Head of DECC's Low Carbon Economy Unit said in a letter to its Advisory Board members - including ICROA, "The carbon market has moved on substantially since the introduction of the QAS and we now believe it is for the market to set best practice for carbon offsetting."

That organizations like ICROA have taken up the Best Practice torch was one of a few reasons why the QAS suffered - others including its "disappointingly low take-up" by UK businesses, lack of public exposure, small pool of member suppliers and even smaller pool of standards for suppliers to choose from (ie only CDM/JI and EU ETS allowances).

The government's retreat from winner-picking hasn't stopped the four former member suppliers from carrying on with the UK-specific QAS. Members Carbon Footprint, Carbon Retirement, Clear and Pure recently launched QAS part deux.

While the scheme's new website is still under development, a press release from the group states that they will "keep flying the flag for high quality offsets despite the closure of the Government scheme that supported them."

So as quality assurance alphabet soup goes, you can add ACR, keep QAS and follow ICROA as it integrates with IETA - including a planned fall 2011 launch of the organization(s)' new voluntary carbon working group, seeking members soon.