Five Core Strategies
RFF’s Forest Carbon Initiative is built around five core strategies. Each strategy is designed to inform decisionmakers and improve forest carbon policy frameworks in two distinct ways. First, RFF communicates its research findings directly to policymakers, particularly in the United States but also at the global level. Second, RFF disseminates its findings and creates specialized research products for forest carbon investors, project developers, developing countries and other forest carbon market players, with a view to strengthening the voluntary market for forest carbon in a way that has a beneficial impact on forest carbon policy frameworks. Each of the five core strategies is outlined below.
Making the Case
Policymakers and stakeholders continue to debate whether forests should be included fully in climate policy. This is especially true in the United States where few members of Congress understand the connection between forests and climate change. RFF conducts research and analysis bearing on the design of forest carbon policy and its integration into U.S. domestic climate legislation and U.S. climate change foreign policy. RFF’s ties to U.S. policymakers, companies, and financial institutions helps ensure its research attracts attention and has an impact.
Selecting the Right Policies & Mechanisms
RFF conducts original research and analysis to inform policymakers about the pros and cons of various policy mechanisms for conserving forest carbon, including market-oriented approaches, traditional government-to-government foreign aid and more innovative community-based development assistance. RFF helps decisionmakers better understand how their choice of policy mechanisms will influence the cost-effectiveness of emissions mitigation, as well as the distribution of forest carbon costs and benefits among polluters, governments, and local communities.
Creating Effective Markets
The value of internationally traded forest carbon assets could exceed tens of billions of dollars in a few short decades. RFF’s researchers give special attention to issues that influence the effectiveness and credibility of private markets for these forest carbon securities, particularly under a U.S. cap-and-trade climate change program. Among the issues RFF addresses are:
- safeguards and standards needed to maintain the integrity of the forest carbon market,
- the effectiveness of forest carbon markets in controlling emissions mitigation costs,
- ways to use revenues from a cap-and-trade system to reduce emissions from deforestation inside and outside of such a system, and
- strategies for guarding against volatility and/or extremely low prices in forest and other carbon markets.
Strengthening Public Conservation Programs
While markets for compliance-grade forest carbon assets seem likely in the context of broader cap-and-trade programs, so do new donor government spending programs to conserve and restore tropical forests. Several climate bills in Congress would generate several billion dollars a year for bilateral and multilateral forestry programs, and making these new spending programs effective will be difficult. The World Bank’s own assessment of its billions of dollars in forest sector lending over the past decade concludes that its programs have not reduced deforestation rates in developing nations. RFF analyzes how any new U.S.-funded international forest programs should be structured to make a difference. In this work, RFF researchers build on their direct personal experience with development assistance programs and institutions, as well as their prior research on the design and operation of recently created U.S. foreign aid institutions, most notably the Millennium Challenge Corporation.
Enabling Private Action
Today’s voluntary market for forest carbon assets provides important and immediate opportunities for action. The voluntary forest carbon market is small but it is growing at over 200 percent a year. Scaling-up that market even more rapidly could stimulate forest conservation, mitigate emissions, and inform future climate policy frameworks. Real-world experiences and direct learning-by-doing are critically important to ensuring that future compliance markets for forest carbon actually work.
Unfortunately, quite apart from the lack of a government price signal, significant informational and transactional impediments stand in the way of forest carbon projects. For example, great uncertainty remains about likely asset values and volumes. Few mechanisms and options exist for allocating risk efficiently. Suppliers have little information about cost-effective strategies for originating timely, high-quality forest carbon assets. Few broadly accepted methodological standards exist to guarantee the environmental integrity of forest carbon assets. Working with others, RFF seeks to overcome these barriers to action by gathering, analyzing, and publicizing timely data on the emerging forest carbon market. These activities enable and encourage private action, while also informing decisions by policymakers, advocates, and other stakeholders.