Reducing greenhouse gas emissions resulting from the destruction of forests is recognised as a key component of the global effort to mitigate climate change.
As the international community has yet to agree on an international legal regime for projects that reduce emissions from deforestation and forest degradation (REDD Projects), the issue will be a key focus of the continuing international climate change negotiations. It is likely that REDD Projects will be recognised and regulated either as part of the arrangements that succeed the Kyoto Protocol or under a separate dedicated framework, and will be able to generate emission reductions (REDD Credits) for sale in global carbon markets.
Individual countries are already acting to promote REDD Projects within their own territories. Indonesia introduced a national regulation addressing REDD Projects in May 2009, greatly increasing clarity and certainty as to the treatment of Indonesian REDD and the respective rights and obligations of different project participants. Private sector players have demonstrated a strong interest in REDD Projects in various countries, and it is clear that there is a rapidly growing investor interest both to develop and invest in REDD Projects and to purchase the REDD Credits they generate (even before national and international compliance markets are in place).
Baker & McKenzie has advised on land use, land use change and forestry (LULUCF) issues and transactions over many years: our experience at such an early stage of the market is unrivalled. We acted in the first REDD investments and worked with the World Bank in developing its global REDD fund. Through our market-leading Global Environmental Markets Practice and unique office network in key REDD jurisdictions (including Indonesia and Brazil and buyer countries such as Australia and the US) we have acted, and continue to act for parties involved in REDD Projects and the regulation of REDD activities. We have also been engaged to work on the continuing development of REDD policy and legal frameworks. Our REDD clients include governments, multi-laterals, corporates and non-governmental organisations.