integrated incentives

Definition

To address concerns about environmental integrity, equity, efficiency, and effectiveness, TNC draw upon elements from the Stock-Flow Approach as well as the Brazil and COMIFAC proposals. Reference emissions levels are set using a 10-year moving national historical average of emissions from deforestation and forest degradation. Countries that reduce emissions below this reference level will receive credits to sell in international compliance markets, and countries that go over this level would be required to make up the difference in future performance periods before credits can be sold. Accounting would be at the national level, with optional project-level credit ownership (valid only if national emissions are below a national reference level). TNC propose a new Stabilization Facility to address international leakage and equity concerns among countries with historically low rates of deforestation . This facility could also be used to establish permanence buffers in later performance periods. Revenue for the Stabilization Facility would be generated through a levy applied to all REDD+ credit transactions, and would be allocated to tropical countries as a function of their proportion of tropical forest carbon stocks that are vulnerable to emissions in later performance periods. The Stabilization Facility could be topped up through public funds generated from ODA, the auctioning of AAUs or taxes. TNC also suggest supplementary financing for a Readiness Fund - which could come from the auctioning of AAUs or other sources - to build capacity in non-Annex I and a Catalyst Fund - that could be backed by bonds - to stimulate private investment in countries where investment risk is perceived to be higher. (The Little REDD Book, 2008)

Broader terms

REDD approaches