The Paris climate talks have paved the way for the widespread development of forest carbon sequestration markets, said Roger Williams, president of carbon offset developer Blue Sky on Tuesday.
The Paris agreement was a pleasant surprise for advocates for a market mechanism to spur private investment in carbon sequestering timber operations, Williams said at the RISI Global Timber Investment conference in New York.
In 2015, leaders of 196 countries reached a preliminary agreement to voluntarily reduce their net carbon emissions, with the eventual goal of keeping global temperatures from increasing by more than between 1.5 and 2 degrees Celsius.
“There was a lack of optimism about how market mechanisms would be treated in these talks,” he said. “[But] the climate pact specifically encourages [forest] preservation as a strategy for meeting climate goals.”
The agreement calls for “results-based payments … and positive incentives for activities relating to reducing emissions from deforestation and forest degradation”. It also mentions “internationally transferred mitigation outcomes”.
Williams described this as a “one-two punch of forestry and flexible mechanics for the value exchange that forests are providing [in the carbon offset market],” he said.
But a robust, effective market does not mean a simple one. The nascent markets in California, Chicago and London have attracted a diverse group of public and private players.
“You’re going to have the ability for a lot of different markets to show up. It’s not going to be just one centralised spot,” he said. “You’re likely going to have a situation where your path to value could come from a bilateral agreement, a private foundation, a multilateral institution such as the World Bank or sovereign funding.”
A record 34.4 tonnes of sequestration credits were traded in 2014, the most recent year for which data is available, the vast majority voluntarily.
Though Williams said this showed the strength of the market, the fact that commitments for carbon emission reductions are voluntary is a challenge.
“The real enforcement mechanism,” said Williams, “I characterise … as public shaming.”