The rules for forestry in land use, land-use change and forestry and the Clean Development Mechanism (CDM) are generally soundly based and little is to be gained from revisiting them, except at the margin. While the anomalies are relatively minor in the whole scheme, they must nevertheless be guarded against in future arrangements.

It needs to be accepted that the role of afforestation and deforestation in the CDM and the Joint Implementation (JI) may always be a minor one. The late start afforded afforestation and deforestation under the CDM has undoubtedly limited the number of projects in the pipeline; at the start of 2009 only one such project had been registered and no certified emission reductions had yet been issued. It is possible that the low-cost certified emission reductions by other types of project, that is the low hanging fruits, have been exploited and that the price of emission reductions will rise, making afforestation and reforestation relatively more competitive. Another factor that may induce a greater interest in forestry is an increase in the price of carbon after agreement on deeper cuts in global emissions at the Copenhagen climate change conference. On the evidence, however, the inherent characteristics of afforestation and reforestation will always be manifest in low prices, high costs and high risk projects, relative to other certified emission reductions, which are deterrents to private investors.

The major deficiency of the CDM is omission of the reduction of deforestation and forest degradation (REDD) in developing countries. Here the conclusions must defer to the analysis undertaken in Chapter 8, which suggests that the credits generated by inclusion of REDD will not be as cheap and easy to come by as commentators have suggested. Indeed REDD may not be amenable to generating marketable credits of a volume required to make a significant difference to the level of global greenhouse gas emissions.

The World Bank recognizes both the social and economic complexities that beset forestry projects and at the same time the socioeconomic benefits that potentially accompany them (as demonstrated in the case study above), and is taking an important leadership role. It is intervening and bringing to fruition afforestation and reforestation projects under the CDM, as well as through pilot projects in REDD, which the unassisted market has so far been unable to deliver. The architecture of future arrangements for forestry is in large measure dependent on the continuation of generous financial support by developed countries for dedicated funds such as those of the World Bank.

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