Analysing the impacts of including REDD credits in carbon markets

Larger global emission reductions and lower overall abatement costs can be achieved if REDD (reducing emisions from deforestation) credits are included in a future carbon market. One of the key challenges is to ensure a balance between the demand and supply of REDD credits to keep a stable market.

The issue of including REDD credits (from avoided deforestation) in a future global carbon market is highly contested. Proponents point to the potential for achieving higher overall emissions reductions and/or reducing global mitigation costs, while sceptics think that REDD credits will crowd out mitigation in other sectors.

Different scenarios up to 2020 are constructed using an integrated assessment model by varying the overall greenhouse gas emission reductions and the rules for including REDD credits in the market.

There are environmentally and economically sound ways of including REDD credits in the market, and the focus should be on the design of mechanisms rather than on a polarised debate on inclusion. Achieving the 2 °C climate target without the inclusion of REDD is unrealistic as this would lead to carbon prices of above USD 100 per tonne of CO2 equivalent, while inclusion of REDD credits without more ambitious reduction targets may lead to undesirable crowding out effects.

PBL Working paper 17

Authors

PBL Authors
Angelica Mendoza Beltran Michel den Elzen
Other authors
Arild Angelsen
Caroline Wang Gierløff
Hannes Böttcher

Specifications

Publication title
Analysing the impacts of including REDD credits in carbon markets
Publication date
12 December 2013
Publication type
Publication
Publication language
English
Product number
493