Will Low Carbon Prices Burn REDD?
Copenhagen Diary: Negotiations Day 4:
"No rights, no REDD" - proclaimed more than 50 indigenous peoples' representatives, many of them wearing feathered headdresses and handloom fabrics as they marched in a human chain through the Bella Centre in Copenhagen.
They were opposing the Reducing Emissions through avoided Deforestation and Degradation (REDD) policy, which monetizes forest carbon without recognizing indigenous sovereignty.
I gained an unexpected perspective on the indigenous position in a conversation with Yale University forestry professor Lloyd Irland just after he had emerged from an event hosted by the International Emissions Trading Association.
Irland, who supports the policy, suggested that REDD will not be effective unless the price of carbon rises to at least 50-100 Euros per ton (approximately $73-$150). If the European Union cuts emissions by 20 percent, forecasters expect carbon to cost 15-39 Euros ($22-$57) per ton by 2020 (carbon currently trades at 14 Euros ($20) per ton in Europe) in the European market.
Moreover, Irland pointed out a little-discussed fact about the Boxer-Kerry climate change bill pending before the U.S. Senate - it sets both a price floor and price ceiling on carbon. Thus, some analysts believe that the price of carbon will not rise above $15 per ton in the U.S. before 2019.
Given the U.S. carbon market's size, a low U.S. carbon price would dampen the EU price, too. If REDD comes into force, what would the artificially low price of carbon mean for the forest dwellers who marched through the halls of the conference center today? Seeking answers will be a continuing chore for those gathered in Copenhagen.
Bidisha Banerjee is in her first year as a graduate student at the Yale School of Forestry and Environmental Studies.
December 14, 2009