Forests for Climate

Synonyms

TDERM,

Definition

The Forests for Climate / Tropical Deforestation Emission Reduction Mechanism (TDERM) proposal suggests a market-based approach to finance REDD. A critical element of this proposal is to attain both climate and biodiversity objectives in a manner that fully respects the rights of local and indigenous peoples. Industrialized countries would provide financing for REDD – through the purchase of a newly created currency called Tropical Deforestation Emission Reduction Units (TDERUs) - proportional to their overall emission allowances (Assigned Amount Units, AAUs) in the second commitment period. The significant distinguishing factor between the market-based mechanism proposed here and direct carbon market-offset mechanisms is that reductions in forest emissions would be additional to, not in exchange for, domestic reductions made by industrialized countries. The mechanism would seek to properly align incentives for both industrialized and developing countries. Industrialized countries that take drastic action to reduce emissions at home would only have to make a minimal mandatory contribution to REDD. Developing countries who accurately monitor and report on their mitigation actions would receive a higher return for their services, providing a strong incentive for countries to continually improve their forest protection programs. (The Little REDD Book, 2008)

The Forests for Climate / Tropical Deforestation Emission Reduction Mechanism (TDERM) proposal suggests a market-based approach to finance REDD. A critical element of this proposal is to attain both climate and biodiversity objectives in a manner that fully respects the rights of local and indigenous peoples. Industrialized countries would provide financing for REDD ? through the purchase of a newly created currency called Tropical Deforestation Emission Reduction Units (TDERUs) - proportional to their overall emission allowances (Assigned Amount Units, AAUs) in the second commitment period. The significant distinguishing factor between the market-based mechanism proposed here and direct carbon market-offset mechanisms is that reductions in forest emissions would be additional to, not in exchange for, domestic reductions made by industrialized countries. The mechanism would seek to properly align incentives for both industrialized and developing countries. Industrialized countries that take drastic action to reduce emissions at home would only have to make a minimal mandatory contribution to REDD. Developing countries who accurately monitor and report on their mitigation actions would receive a higher return for their services, providing a strong incentive for countries to continually improve their forest protection programs. (The Little REDD Book, 2008)