Including International Forest Carbon Incentives in Climate Policy: Understanding the Economics

Author(s): Brian C. Murray, Ruben Lubowski, Brent Sohngen

Published: June 2009

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Deforestation and forest degradation currently account for 15% to 20% of global greenhouse gas emissions, exceeding the global emissions of the transportation sector (Intergovernmental Panel on Climate Change [IPCC] 2007). But efforts to curb deforestation and degradation have not yet been incorporated into the binding agreements to reduce GHGs such as the Kyoto Protocol to the UN Framework Convention on Climate Change (UNFCCC). Given the enormous scale of deforestation, and the realization that the world’s remaining tropical forests are disappearing at an alarming rate, it is no longer a question of whether the prevention of forest carbon losses should be part of a global climate agreement, but one of how. Policymakers are now considering the inclusion of reduced emissions from deforestation and degradation (REDD) in the UNFCCC post-Kyoto climate agreements. At the same time, legislators in the United States Congress continue to craft proposals to cap greenhouse gas emissions, several of which include a role for reduced emissions or increased sequestration of international forest carbon stocks as part of the policy portfolio.