Who Owns REDD+? Carbon Markets, Carbon Rights and Entitlements to REDD+ Finance
1. Introduction: Markets and Entitlement to REDD+ Benefits
3. Context: REDD+ Results-Based Payments and Carbon Markets
4. Carbon Markets: Creating Currency
5. The Underlying Claim: Carbon Rights
5.1. The Land Link: Carbon Rights and Forest Tenure
5.2. The Activity Link: Ecosystem Services and Investments
6. Layers of Rights and Units: Markets and REDD+
7. Concluding Remarks
Conflicts of Interest
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|Emission reductions and removal, ERR||An ERR refers to a reduction in GHG emissions and increase of carbon absorption by biologic sinks calculated against a reference scenario and monitored using standardized measurement, verification and reporting (MRV) rules.|
|Carbon unit||A carbon unit refers to any issued, tradable and traceable instrument representing an ERR (offset credit) or a permit to pollute (carbon allowance).|
|Offset credit||An offset credit refers to an ERR that has been measured and accounted for under a baseline-and-credit system, according to the rules of a private or public carbon standard. Offset credits can be used to meet voluntary or mandatory emission reduction obligations.|
|Carbon allowance||A carbon allowance is a right to emit a certain quantity of GHG emissions in the context of a cap-and-trade system.|
|Carbon rights||Carbon rights (usually used in the plural form) refer to a justified claim that there is a benefit from reduced GHG emissions and/or sequestered carbon. The justification can be based on an activity that leads to forest conservation or an asset, such as the title or management right to land that enables forest conservation.|
|Voluntary vs. compliance credits||Compliance carbon credits are recognized to satisfy an emission reduction obligation under a regulated emissions trading system. Voluntary carbon credits are used to meet voluntary, self-set emission targets.|
|Avoided Deforestation (AD) vs. REDD+||AD refers to a project class under voluntary carbon market standards that seeks to reduce emissions from avoiding deforestation while REDD+ refers to a public sector program linked to the Warsaw Framework for REDD+ as adopted under the UNFCCC.|
|Land Ownership||Carbon Rights||Ability of Non-State Entities to Engage in Carbon Offset Activities|
|All forest land is owned by the government.||Carbon rights follow the right to the land and are owned by the state, but the right to generate ERRs can be transferred to private entities.||Carbon rights can be transferred to private and public entities via concession or license.|
|Democratic Republic of Congo: The 1973 General Property Law (Law No. 73-021), as amended, provides for state ownership of all land, subject to rights of use granted under state concessions. However, much of the land is under customary ownership . The government can authorize private projects, in which case it transfers the right to “réductions d’émissions congolaises (Urec)” to private project developers  (Art. 3).|
Mozambique: All natural forest and wildlife resources are the property of the state  (Art. 109). However, the Land Law of 1997 establishes that individuals, communities and entities can obtain long-term or perpetual rights to land . REDD+ ERRs are owned by the state  (Art. 6.1) and all credits are issued by the government. Private projects can receive a license to generate and market ERRs.
Vietnam: All forest land is owned by the state; however, private entities, including households, may be allocated or lease forest land for 50 years . Private entities can develop REDD+ projects, however, projects must be approved by the Prime Minister .
|State or diverse forest ownership with weak private land titles.||Carbon rights (e.g., Madagascar) or rights to ecosystem services (e.g., Ecuador) are centralized and managed at the level of the national government.||Private projects or transactions involving ERRs are not permitted.|
|Ecuador: Though almost all of Ecuador’s forests are held by privates or communities, about half of these lands have unresolved land tenure issues . Indigenous peoples administer large parts of the forest land. However, all ecosystem services, including the right to engage in carbon transactions, belong to the state.|
Madagascar: All forests except for those on titled land are state property. In 2019, in Madagascar only 7% of the land is titled . While the state is the owner of all forests, co-management between the state and local communities was enabled by the 1996 Gestion Locale Sécurisée Law (Law No. 96-025). The government controls access to ERRs and it is not clear whether the government will authorize private projects.
|Diverse forest ownership with community and private land titles.||Carbon rights are regulated, and special rules apply.||Private entities are free to participate in voluntary carbon market projects subject to restrictions.|
|Costa Rica: About half of Costa Rica’s forests are privately owned . The national PES system covers about 20% of the national territory and facilitates the linkage of conservation and management of forest resources to socioeconomic development . Landowners hold rights to ERRs as part of their right to benefit from ecosystem services .|
Guatemala: In Guatemala, ownership of forests is linked to that of the land, except when the land title specifies otherwise. Forests are located on state, municipal, communal and private lands and within protected areas. Private forests constitute about 38% of total forest area, public forests constitute about thirty 34%, and the rest are community-managed forests . The Climate Change Law of Guatemala clarifies the right of private individuals and communities to engage in AD projects and market ERRs.
Peru: Land laws in Peru are not consistent. The Constitution assigns natural resources to the state. Privately owned categories of forest land include land held by Amazonian indigenous communities, Andean peasant communities, private conservation areas and private agriculture plots . About half of the land in Peru is titled. Peru considers REDD+ and AD as ecosystem services and has provided detailed guidance on how private and community actors can benefit from providing ecosystem services. A special resolution (RP-26-2014) regulates the commercialization of REDD+ in national parks.
|Diverse forest ownership with strong community and private titles.||No special regulation. Carbon rights pertain to landholders.||Private entities are free to participate in voluntary carbon market projects within the limits of the law regarding land use and safeguards.|
|Chile: Chile has a strong forest sector and allows private forest ownership . The country has no dedicated legislation on carbon rights in place but honors the rights of land and forest owners to participate in AD projects.|
Mexico: Mexico has a sophisticated set of laws to regulate forest protection. Of the total forest surface, about 70% is community property, 26% is private property (small-scale landowners), and the remaining 4% is government property . Applying general principles of law, Mexico differentiates between the rights to sequestered carbon (removals) and avoided emissions from deforestation (which equal to the avoidance of an illegal activity). Only the former can be transacted by private entities. The extent to which the government can or will participate in REDD+ ERR transactions is still under consideration .
|Legal Source||Instrument||Carbon Unit||Comments|
|International law||UNFCCC, Paris Agreement||No defined legal instruments, decisions establish how to generate ERRs that can be linked to payments.||Results-based payments link payments to performance but do not involve carbon trading.|
|Supra-national and national law||EU ETS, NZ ETS, Colombian ETS (under development, to complement the national carbon tax and offsetting program)||Regulated carbon units in the form of allowances and/or offset credits.||ETS may accept offset credits that meet defined criteria. Offset credits “imported” in a cap-and-trade system generally become equivalent to allowances as compliance instrument.|
|REDD+ or PES regulations||No defined legal instruments, regulation establishes right to payments or ERRs.||Legislation concerned with clarifying who can benefit from REDD+. Regulation in the context of PES systems, climate or forest laws or dedicated REDD+ legislation.|
|Private law||Private carbon standards||Voluntary offset credits defined by private standards.||The VCS or the Gold Standard are examples of standards that issue tradable carbon credits.|
|Private or public law||Contracts||ERRs defined on the basis of a contract.||FCPF General Conditions defining emission reductions; contracts can also make references to voluntary or regulated offset credits.|
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Streck, C. Who Owns REDD+? Carbon Markets, Carbon Rights and Entitlements to REDD+ Finance. Forests 2020, 11, 959. https://doi.org/10.3390/f11090959
Streck C. Who Owns REDD+? Carbon Markets, Carbon Rights and Entitlements to REDD+ Finance. Forests. 2020; 11(9):959. https://doi.org/10.3390/f11090959Chicago/Turabian Style
Streck, Charlotte. 2020. "Who Owns REDD+? Carbon Markets, Carbon Rights and Entitlements to REDD+ Finance" Forests 11, no. 9: 959. https://doi.org/10.3390/f11090959