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BONN CLIMATE TALKS S1

Bonn
climate
talks
Welcome to Trading Carbon’s Bonn climate talks supplement. While there
have been UN-level talks and discussions in other international fora on climate
change since last December’s high level meeting, Bonn marks the half-way point
between Copenhagen and Cancun later this year.
Copenhagen was envisaged as the final stage of the process outlined in 2007’s
Bali action plan to culminate in a new agreement to deal with climate change in
the post-2012 world. That didn’t happen and we were left with the Copenhagen
accord – a document that was not adopted at the UN level and which, for many,
didn’t go much further than the Bali action plan itself.
This supplement aims to outline some of the main talking points.
Detail on reducing emissions from deforestation and degradation (Redd+) is a
prominent section of the accord. However, while Redd+ has been heralded one of
the most successful aspects of the negotiations, there is still much to do before it
can provide serious reductions in greenhouse gas emissions.
We also take in the views of the most vulnerable nations – least developed
countries and small island states – to the Copenhagen accord and how the future
negotiations might affect them.
The big question, of course, is when will there be an international agreement
that will provide more certainty to businesses on the shape of the post-2012 climate
change regime. Will this mirror the approach of the Kyoto protocol or are we in
line for something completely different possibly outside of the auspices of the UN?

Contents
S1 Introduction/Contents
S2 Post 2012
Legally binding or just embarrassing?
Andreas Arvanitakis discusses when a new legally
binding international climate regime could be in place.
And asks what difference could it make to countries’
efforts on greenhouse gas mitigation
S4 LDCs/SIDs viewpoint
Moving forward
Gaile Walters examines how the world’s most vulnerable
nations to climate change – least developed countries
and small island states – view the Copenhagen accord
and the prospects for global climate change negotiations
this year
S6 Redd+
Much still to be done
Reducing emissions from deforestation and degradation
is an area that promises much progress at the
international level. But, as Manual Estrada finds, it still
requires a lot of work before it becomes a reality

June 2010
S2 POST 2012

will a legally binding international climate agreement

make a difference? Asks Andreas Arvanitakis

LEGALLY BINDING,
OR JUST
EMBARRASSING?
I
really didn’t know if it was going to work out. I wouldn’t
have given it more than 50 per cent chance. I was pretty
sure of two things though: If it died, it would do so
quickly – within two years most likely. If it survived, I
would regret not grasping the opportunity, despite the risks.
It was a job offer from Point Carbon, at the time a start-up
boasting just a dozen or so employees, none in the UK. It was
the summer of 2003 and at the time the emissions trading
vision felt pretty precarious; the business plan centred on the
carbon market, in turn based on policies that were not quite
in place yet. The UN Framework Convention on Climate
Change (UNFCCC) had been around for ages and achieved
nothing, the EU emissions trading scheme (ETS) directive
hadn’t even entered into force.
In fact, we were still watching the Kremlin to see whether
Russia would ratify the Kyoto protocol and bring it to life.
Needless to say, I did take the job at Point Carbon, based
largely on a hunch, and have never looked back. Now there
is a sense of deja vu, though. The emissions trading world
has come a long way, but in 2010 we face uncertainty at the
international level and we await clarification on regional or
national ETSs.
The risks and rewards of investing in the post-2012 market
have to be weighed up by business, in general, in the same
way as in 2003, hopefully, not just on a hunch. The question
seemed quite straight forward at the time: In or out? Now, it
is more complex, just as the coagulation of the politics and the
proliferation of rules have complicated the market. Rather the
question is in (but how and where), or out (when)?
The business community is a broad grouping of different
interests in the international policy context, but there is one
cause most constituents support and that is the call for greater
‘investment grade’ so business feels the confidence to
plough finance into the next generation of greenhouse gas
mitigation projects?
Figure 1 shows a schematic representation of the dilemma.
In reality of course, it is a sliding scale; a European utility will
know well enough that they face carbon constraints and must
mitigate that risk. A hedge fund/project developer may have
a greater appetite for risk today with one eye on tomorrow’s
rewards. Essentially they are both asking themselves the same
question, how much certainty do I need to pull the trigger on
investing in emissions reductions?
When guessing what will happen next in the international
climate regime, we can start by eliminating some unlikely
scenarios. First, as the major developing countries in
Copenhagen opposed any decisions that might undermine
the Kyoto protocol, the EU’s idea of replacing Kyoto with a
new agreement that has legally binding targets and includes
the US, is unlikely. The negotiations will continue along two
tracks, one under the protocol and one under the convention,
as least for the foreseeable future.
Second, a strong binding framework under the convention
that co-exists with Kyoto is unlikely, because countries, such
as China and India, have strongly opposed a legally binding
Figure 1. How much certainty is
needed for investment in emissions
reductions
Policy uncertainty

certainty. Regulatory/policy uncertainty is peaking and

threatens to kill the emissions market, or at least anaesthetise
it for some time. To be able to measure the risks and scope out
the opportunities, that high-level uncertainty needs to come
down, the message goes.
Simply put, ‘certainty’ makes for a lower discount rate
on future cash flows and lifts the net present value of a
project. So what is this certainty in the international policy Investability
framework that business seeks? When does it become

June 2010 www.pointcarbon.com

POST 2012
outcome of the convention track. The convention itself,
as it stands today, is a rather general and non-committing
framework with no sanctions or other punitive measures.
In this context, anyone waiting for a relatively simple
structure like the Kyoto protocol to emerge before stepping
into the game will be stuck on the sidelines indefinitely. We
do not expect a new deal or agreement will substitute the
Kyoto protocol, but rather that at least the EU, Australia,
New Zealand and Japan – and possibly also Russia – will
inscribe a new round of targets in Annex B. Supplementary
building blocks under the convention could be developed
that have the combined effect of increasing transparency
and reducing emissions, although they will be less binding
than Kyoto.
Whether the lack of a ‘binding’ legal status is a problem
for business is debatable. International law takes precedence
over national law in theory, however, in practice it is easy to
walk away from ‘binding’ protocols.
The US cold-shouldered the Kyoto protocol without a
second thought under the George W Bush administration,
and is no closer to embracing it again now. Canada will
come to 2012 and not be in compliance, even though it
has not rejected Kyoto outright. Perhaps you know when a
treaty or protocol is ‘binding’ when you feel pain for non-
compliance.
Kyoto’s compliance mechanism is intended to underpin
the ‘binding’ nature of the caps. If a party is not compliant,
there are two strands – the first is facilitative and intended to
help them comply. The second is punitive and should result
in twice the shortfall in this period being subtracted from the
cap in the next phase.
But it turns out that its legally binding nature has not led
to uniform compliance. Canada is keenly following the US in
the non-Kyoto stream and is unlikely to subscribe its targets
in an annex to the amended protocol. If it doesn’t have a cap
in the next phase, the compliance mechanism cannot be
applied. So for Canada, the protocol is not politically binding
and so its legally binding nature does not bite – at worst it
may be a little embarrassing to be out of compliance.
Talking to one of the frontiersmen in this market I was
reminded that, in the context of joint implementation in
Europe, the argument that money could be made in investing
in reducing emissions fell flat until the EU ETS directive hit
the statute books, suddenly the game was on.
The US is another case in point. It cannot sign up to
anything internationally unless it has secured
implementation domestically.
So as well as the international negotiations over
development and climate, another system is emerging of
ETSs that, once operational, may start to reach out and link
directly to each other. Until then, international offsets will
connect these markets indirectly.
But legal status and being legally binding are different.
Many negotiators agree that a legal agreement would be
significantly stronger than a political outcome. Developing
countries certainly want caps for industrialised countries
and finance flows for mitigation and adaptation to be
legally binding.
Likewise, industrialised countries would like to see
domestic efforts ‘internationalised’ by naming them
S3
Figure 2. Copenhagen’s impact on
certainty and the carbon price
15 EU allowance
spot price
14.5
14
€/tCO2
13.5
13
12.5
12
1/12/09 8/12/09 15/12/09 22/12/09 29/12/09
nationally appropriate mitigation actions – so called Namas –
and setting them in a legal context.
The belief that legal form is more important than a ‘pledge
and review’ system, as sketched out in the Copenhagen
accord, is not just related to a compliance mechanism. It is
about building trust between negotiating parties that the
other will do what they say and, perhaps more importantly, it
underpins the development of national policy. Without Kyoto
and its particular legal status, there would be no EU ETS, not
just because of the protocol’s compliance mechanism. It also
provides a spur for action by policy-makers and a buttress
against lobbying for inaction.
Take the Copenhagen accord. It sets out a massive finance
plan building to $100 billion per year by 2020, as well as a
series of pledges to cut emissions on the part of industrialised
and some rapidly developing countries. But pledges for funds
from Treasury departments are subject to the prevailing
domestic policy winds. Likewise, an international ‘pledge’ to
cut emissions with a target date several terms in office away,
may not prove convincing either.
On the other hand, if those international pledges are
nationalised’ into domestic legislation, then you have binding
emissions caps creating demand for offsets. A sense-check of
the scale of finance tells you that $100 billion a year, cannot
come just from public coffers. It must primarily come from
the private sector, and most likely via emissions trading as
well as other mechanisms.
For some countries, affording the pledges in the
Copenhagen accord with a legal status, sometimes under the
Kyoto protocol and sometimes the convention, will be a spur
for action at the domestic level – it would help the EU to
upgrade its target from a 20 per cent cut in 2020, for example.
In the case of the US, and eventually other countries,
domestic legislation needs to be in place first. Once those
pieces come together, you have a semblance of certainty by
most people’s definitions.
If ‘investment grade’ certainty means likely increased
demand in the emissions market, then the Bonn talks in May
and June will give another clue as to whether we are moving
towards an agreement with legal status any time soon. But
clearly what happens in US national policy is the catalyst for
investment. l
Andreas Arvanitakis is a senior analyst at Point Carbon
in London
Email: aa@pointcarbon.com
June 2010
S4
As UN climate negotiations weave slowly towards
Mexico, progress is possible for the most vulnerable,
says Gaile Walters
Moving
forward
A
s the international environmental community
heads towards the high-level UN climate change
meeting (COP16) in Mexico at the end of 2010,
there can be little doubt that Copenhagen’s COP15
did not assist in the unification of a house divided. Much
criticism has been levelled at the resulting Copenhagen
accord, which was negotiated at the 11th hour by a handful
of countries, while the rest of the world seemed to wait in
another room. The outcome has been described by the UN
Framework Convention on Climate Change (UNFCCC)
itself as an engagement by governments “at the highest
political level”, when, in fact, the desired result was a
binding agreement operating at the highest international
legal level.
Sadly the accord does not have the status of binding
The Basic countries – Brazil,
China, India and South Africa
– have already put daylight
between themselves and
other developing countries
international law. Some critics have wondered whether
Copenhagen has not set a bad precedent for the increased use
of fora outside the multilateral UN framework. The major
players in these negotiations were the US, Brazil, China,
India and South Africa. The latter four developing countries
have been given the acronym ‘Basic’ and are major emitters
in the non-Annex I group under the Kyoto protocol.
The Basic countries have already put daylight between
themselves and the other developing nations. In an earlier
article ahead of Copenhagen, I explored the need to create
a special regime that addresses the distinct concerns of
the least developed countries (LDCs) and small island
developing states (SIDs) that differs from those breakout
countries, such as the Basic alignment (see Trading Carbon,
October 2009, pages 32–33.
June 2010
LDCs/SIDs viewpoint
It is not clear what role the LDC/SIDs group played
in the Copenhagen accord negotiations. The accord does
recognise the impact of climate change on the “particularly
vulnerable, especially least developed countries, small
island developing states and Africa” within the non-Annex
I parties and relieves them of the obligation to perform
mitigation actions, while promising funding for adaptation.
There are two questions that remain to be asked on behalf of
LDCs/SIDs:
l Is the political promise of the accord enough; and
l can it serve as a platform from which they can launch
into real growth and sustainable development?
Heading into Copenhagen, there were pre-existing
political tensions based in large part on the developing
world’s view that the UNFCCC notion of ‘common but
differentiated responsibility’ needed to be ingrained in
the text of any new treaty. Such a nuanced description of
responsibility needed to go beyond a nod to the normative
and recognise the real differences in development
trajectories between the industrialised and developing
world. There was more than a little suspicion that the voices
and needs of the developing world – particularly the LDCs/
SIDs – were not being taken seriously.
The manner in which the accord was eventually
presented to the world has done little to quell those tensions.
This can be seen in the very vocal responses of those LDCs/
SIDs who have agreed to be associated with the document.
At the time of the document’s presentation to the plenary,
it was met with some resistance. It was decided that it would
be left to individual countries to signify their association
with it. Non-Annex I parties were also required to submit
mitigation implementation plans. LDCs/SIDs were given
the option of implementing such plans voluntarily.
By 31 January, some 101 countries of the 194 which
are part of the UNFCCC system had submitted letters of
association. Of this number, more than half are LDCs/SIDs
(55) and approximately one fifth of that number lodged
simple letters of association. In the majority, were letters
that commented on the negotiation methods employed, the
www.pointcarbon.com
LDCs/SIDs viewpoint
political nature of the accord and voluntary commitments to
mitigation or adaptation plans.
The criticism of the negotiating methods ranges from
mildly adverting to the political and, therefore, tenuous
value of the accord, to the keener concern that the power
inherent in consensus that ostensibly levels the playing field
had been abrogated. While some LDCs/SIDs have signalled
their intention to allow the accord to serve as a starting
point, others believe it should be ignored. This view has
found favour with larger countries in the Latin American
bloc, such as Venezuela and Bolivia, as recently as April’s
UN meetings in Bonn. It is not difficult to see that this may
become a fault line in future negotiations.
It is understandable that the hasty drafting of the accord
would not present the type of detailed mechanisms that
a lengthy and involved drafting process would ordinarily
produce. The language of the text is aspirational, but makes
consistent reference to the recognition of development
priorities for developing countries that focus on socio-
economic development and poverty alleviation. The
commitment to mitigation for the non-Annex I parties and
adaptation through technology transfer, capacity building
and funding for the most vulnerable developing countries is
reaffirmed.
The accord actually quotes money figures for 2010–2012
and up to 2020. The common thread among the associated
LDCs/SIDs is the need for development assistance, which
the Copenhagen green climate fund should rapidly provide.
The LDCs/SIDs have long declared that development on
their part along a low-carbon trajectory was always going to
be a costly exercise and a burden they could not bear alone.
They do not have to commit to any mitigation schemes, but
S5
a large number of them have done so in their noting of
the accord.
The LDCs/SIDS are not allowing themselves to be
restricted to adaptation, but have prepared mitigation plans
that take into account the extension of one of the Kyoto
protocol’s flexible mechanisms, the clean development
mechanism (CDM), and the expansion of reducing
emissions from deforestation and degradation (Redd+)
and incorporated these plans into their own sustainable
development strategies.
Perhaps it is good that there
was a high level of political
involvement in the process
as it gave the issue a wider
audience
In the lead up to Copenhagen and beyond, LDCs/SIDs
in Africa and the Caribbean have been making some
progress in the development of CDM projects. At this year’s
African Carbon Forum conference in Nairobi in March, co-
presenters were able to show year-on-year increases in CDM
projects in Africa to 122 in 2010 from 42 in 2007. These
projects are in various stages of development and, if broken
out across the continent, reveal a skew and do not compare
with the superior numbers of projects in Asia or South
America, but show that the interest and desire to become a
part of that market is alive and growing in Africa. Investors
have also signalled that they are willing to pay a premium
for the credits generated from these projects.
In the Caribbean, Guyana has emerged as a valuable
player in the Redd+ market with its millions of hectares of
virgin forest it has been able to present avoided deforestation
as an economic value. Investors have shown great interest
in the country and Guyana itself has used it as a departure
for its own low-carbon sustainable development plans in
a rather lengthy document on the topic. The workability
of the Guyanese pilot will bear close scrutiny, but its
development has not been deterred by the insufficiencies of
Copenhagen. However, the failure to secure an agreement
in 2009 will only provide more impetus for projects such as
these, not less.
Copenhagen, for all its failures, has provided clarity on
the way forward. Perhaps it is good that there was a high
level of political involvement in the process. This gave the
issue a wider audience and exposed the possibility that
getting a deal is not necessarily a problem of technical
differences, but political will. It also showed that the LDCs/
SIDs are engaged in the process and are not simply looking
for handouts. They are as committed to the principles and
the fight against climate change as the industrialised world
and they are prepared to put forward their own ideas,
suggestions and strategies. It is unlikely that COP16 will be
handled in the same manner as Copenhagen. l
Gaile Walters is an international energy and
environmental lawyer at Greenleaf Caribbean
Email: gaile.walters@gmail.com
June 2010
 S6
Much still
to be done
ISTOCK
Manuel Estrada looks at the status of talks to
establish an international regime to reduce greenhouse
gas emissions from deforestation and degradation
I
t has been more than four years since the parties to
the UN Framework Convention on Climate Change
(UNFCCC) started discussing policy approaches
to reduce greenhouse gas (GHG) emissions from
deforestation and degradation (Redd+) in developing
countries. Redd+, which also includes forest conservation
and carbon stock enhancement, has since become one
of the most popular issues on the international climate
change agenda, receiving unprecedented attention not only
from governments, but also from researchers, multilateral
funds and organisations, NGOs – including indigenous
peoples organisations – politicians and the private sector.
Readiness efforts have already started in a number of
June 2010
REDD+
developing countries with support from, for example,
the World Bank’s Forest Carbon Partnership Facility and
the UN Redd programme. These efforts are expected to
continue in the coming years with additional funds from
developed countries – such as the $3.5 billion pledged last
year by the US, UK, France, Japan, Australia and Norway.
Actions on the ground are also taking place. A 2009
survey by the Center for International Forestry Research –
‘Emerging Redd+: A preliminary survey of demonstration
and readiness activities’ – found 44 demonstration
activities being currently developed or planned worldwide;
while Idesam’s and the Nature Conservancy’s ‘Casebook
of Redd projects in Latin America’ identified 17 projects
www.pointcarbon.com
 REDD+ S7

in 2009 at advanced stages of implementation in six Latin credibly addressed through methodologies, could offer
American countries – Brazil, Bolivia, Ecuador, Guatemala, an avenue for the immediate participation of all countries
Paraguay and Peru. The casebook defined “advanced and the private sector, even those without the capacities
stages” as those with at least a defined baseline scenario and required to implement a national scheme in the short
quantification of emission reductions. term. A third option was brought to the table by a group of
In contrast, the nature of the positive incentives and the Latin American countries, which introduced the idea of a
details and rules of the international mechanisms through ‘nested approach’ that would allow countries with limited
which they will be allocated to Redd+ activities remain as capacities to start at the subnational level and scale up to a
uncertain as when UNFCCC parties submitted their first national approach as these improve with time.
proposals on these issues in 2006, if not more so. These are The text being negotiated by the AWG-LCA
two of the key determinants of private sector participation, is mainly based on a national approach,
which has been widely recognised as paramount to but contains text in brackets
achieving a significant reduction of emissions from that would offer the option
deforestation and forest degradation. for developing countries to
The draft decision currently being negotiated under the develop, “if appropriate”,
ad hoc working group on long-term cooperative action “a subnational strategy”,
(AWG-LCA) – a UN forum to decide long-term issues – is a “subnational forest
still indecisive about the nature of the incentives for result- reference emission
based activities. This is because the three possible options – level[s] and/or forest
public funds, the carbon market and a combination of both reference level[s]”,
– are mentioned in the text, but all of them are bracketed and “subnational
and so have not been agreed yet, and the Copenhagen monitoring and
accord, which although not adopted at UN level reflects the reporting as an
views of a number of key countries in the climate change optional interim
context, is equally ambiguous in this respect. measure”. However, by
Moreover, the negative attitude of the EU towards the referring exclusively
inclusion of forest credits in its emissions trading scheme to developing country
(ETS), and the recent distaste to an economy-wide cap- parties, the text would
and-trade scheme and to the wide use of international limit the development
offsetting shown by some Senators in the ongoing debate of the aforementioned
in the US could mean that, at least in the short to medium activities to national
terms, the two potentially largest sources of global demand governments. This distinction
for Redd+ credits could be nullified or at least limited. In is important, as it could have a
fact, this situation, combined with the aversion of Brazil – number of relevant implications:
the single most relevant developing country in the Redd+ l Redd+ credits resulting form successful
debate – to carbon trading, raises serious doubts about subnational strategies would be issued exclusively to
the inclusion of Redd+ in the regulated carbon market country governments by a dedicated UNFCCC body.
anytime soon. That is to say, Redd+ activities carried out by subnational
Along the negotiation process, groups of parties
have differed regarding how an international Redd+ The three possible options
mechanism agreed under the UNFCCC would reward
successful mitigation actions. The EU, Brazil and Papua
– public funds, the carbon
New Guinea, among others, have supported the adoption market and a combination of
of a national-level baseline-and-credit scheme. Under such
a system, countries would receive rewards (either carbon
both – are mentioned in the
credits or non-market incentives) for reducing their text, but not agreed yet
historical emission levels, so as to avoid leakage concerns
generally associated to individual projects, and to promote entities would not be credited directly by the UNFCCC
large-scale mitigation in developing countries. However, – as opposed to the CDM, where this is possible
this approach would require good monitoring capacities because Article 12.9 of the Kyoto protocol specifies that
and, since credits or incentives would be received and “participation under the clean development mechanism,
managed by the countries’ governments, good governance including in activities mentioned in paragraph 3(a)
and transparent and efficient benefit sharing mechanisms. above (project activities resulting in certified emission
Attracting private investment to public Redd+ programmes reductions) and in the acquisition of certified emission
would also be an important challenge, particularly in reductions, may involve private and/or public entities.”
countries with low governance levels. l Depending on each government’s decision, private
Other parties, such as Colombia, proposed following a actors could implement Redd+ activities to support
subnational approach based on the experience of existing subnational strategies, but would not be able to do so
ISTOCK

Redd+ projects and the clean development mechanism in practice until governments have developed such
(CDM). This approach, provided that leakage could be strategies, established their associated subnational

June 2010
 S8
ISTOCK
baselines and put in place the capacities required to
monitor and report their results. The definition of
national requisites and procedures for the participation
of private entities in the scheme, their implementation
and the establishment of a revenue distribution
mechanism would require time, capacity and resources.
As a consequence, the instrumentation of Redd+ actions
could be delayed and the flow of private resources could
be limited, if participation requirements and procedures
established by governments are too complicated or
bureaucratic, revenue sharing rules result unattractive
to private investment, or governance is weak.
l National governments with limited technical capacities
could delegate to private actors, NGOs and subnational
Policy approaches currently
being discussed are likely
to fail to attract large private
sector investments in Redd+
governments the development and implementation
of strategies and baselines, as well as the monitoring
of results and the preparation of reports, so as to be
able to participate in the market promptly, but they
would need to have resources to pay for these services
and enough capacities in place to verify that all these
elements comply with international requirements, since
international reporting would still be their exclusive
responsibility.
In summary, the removal of all brackets currently
referring to subnational Redd+ in the AWG-LCA text
would open the door to a scalable “partially national”
approach more than to a subnational one. This is because
the mechanics and requirements of such a scheme would
be similar to those of a national approach, but applied
only to specific areas within a country instead of to all
of its territory. Consequently, many of the short-term
June 2010
REDD+
barriers associated with the implementation of a national
approach could also affect this scheme.
On the other hand, it is worth mentioning – even
if current discussions in the US Senate are uncertain –
that the climate and energy bill passed in the House in
June 2009, the original Kerry-Boxer Senate climate bill
and the new Kerry-Lieberman bill (see page 22) also
limit international project-based activities and favour
nationwide approaches. Only certain countries – those
emitting less than 1 per cent of global GHG emissions
and less than 3 per cent of global emissions from land
use change and forestry – could generate credits from
project activities. This would appear to rule out all project-
based forest carbon activity in Brazil and Indonesia from
eligibility for US carbon credits. Under the House bill,
project-based forest carbon would be phased out after five
years, whereas Kerry-Boxer proposes a period of eight
years. Additionally, project activities could continue in
least-developed countries for eight or 13 years.
So, what is next for Redd+? The context depicted above
makes evident that policy approaches currently being
discussed are likely to fail to attract large private sector
investments to Redd+ activities, at least in the short term:
demand for Redd+ credits is not being promoted and clear
mechanisms for private participation do not yet exist.
It may be argued that, since most developing countries
need to build significant capacities and thus will not be
in a position to deliver large volumes of Redd+ credits
for some time, having a limited private sector demand
for such credits would not actually affect the short-term
mitigation potential of Redd+. However, if the conditions
required to facilitate private sector participation are not
established soon, investments could take some time to
take place.
Undeniably, the first condition that should be met is
the adoption of a Redd+ mechanism or mechanisms under
the UNFCCC in which the private sector could have a
meaningful participation – for example, a market-based
system – supported by international offsetting-friendly
attitudes in the EU and the US in the medium term.
Additionally, in parallel with host country readiness
activities to improve monitoring accuracy, forest policies
and governance, ‘Redd+ buyers readiness’ initiatives
should be considered, so as to ensure that increased supply
will be met by demand within the next decade. Such
initiatives could include, for instance, awareness raising
campaigns on how the adopted mechanisms would
work, the exploration and establishment of, for example,
cost-effective risk-reduction tools for private investments
in government programmes, mechanisms to guarantee
that private investments will not be affected during the
transition from existing and planned Redd+ projects in the
voluntary market to national approaches, and models to
facilitate the integration of private actors in government-
led initiatives. l
Manuel Estrada is an independent climate change
consultant who has advised the government of
Mexico at international negotiations
Email: mporruacop9@gmail.com
www.pointcarbon.com
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 End-to-end efficiencies. Worldwide sustainability.

Global efforts to reduce greenhouse gas emissions are driving fundamental market change and the
establishment of global carbon markets. As these markets continue to evolve, you need a partner
who can help you harness the opportunities it presents.

Whether you are a corporate, fund, developer or broker, Citi provides a comprehensive range of
solutions to support your activities. From risk management and trade execution to transaction
services, including administration, escrow, trade settlement and custody, we can help you navigate
the complexities and provide the solutions you need to efficiently access this growing market sector.

Risk Management
Trade Execution
Escrow
Trade Settlement
Custody
Fund Administration

Please visit us at www.icg.citi.com or contact:

Risk Management and Trade Execution: Garth Edward +44 (0) 207 986 2151
Global Transaction Services: Nadine Teychenne +44 (0) 207 986 5714
Alpesh Naik +44 (0) 207 500 3056

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