The amount of forest conserved by carbon finance grew to 26.5 million hectares in 2012, a new report says

Carbon finance supported the management of forests spanning 26.5 million hectares worldwide as businesses in 2012 injected $216 million into projects that plant trees, avoid deforestation, improve forest management and support low-carbon agriculture, according to the 2013 State of the Forest Carbon Markets report released by non-profit researchers Forest Trends’ Ecosystem Marketplace this week in London.

All these projects (162 in 58 countries), a key defense against the ecological and socio-economic impacts of climate change, were financed by the sale of 28 million tonnes of carbon offsets. While market size grew 9%, the global average price for forestry offsets was $7.8/tonne – down from $9.2/tonne in 2011, but still higher than prices paid by voluntary buyers for other offset types ($5.9/tonne).

So, this year’s report findings illustrate growing corporate interest in incentive payments to protect forests as a climate response “This reports demonstrates that financing forests’ conservation and sustainable management is not just about license to do business, or image. It can directly benefit companies’ infrastructure, suppliers, and bottom lines”,says Forest Trends president and CEO Michael Jenkins.

Projects that reduce emissions from deforestation and degradation (“REDD”) saw heightened demand in 2012, as private companies like The Walt Disney Company and clothing brand Puma invested millions to support REDD projects in developing countries. A total of 8.6 million REDD offsets were transacted, tying with tree planting activities as 2012’s most popular project types. Projects that improve forest management climbed in popularity, while carbon finance for sustainable agriculture remained muted. However, the private sector and negotiators are increasingly attentive to agricultural carbon projects’ strong business case and benefits to avoided deforestation.

On the other hand, offset buyers strongly supported forest projects that deliver benefits beyond carbon sequestration, such as alternative local livelihoods and habitat protection for threatened species. However, even with strong growth in forestry offset demand in 2012, forest project developers reported 30 million tonnes that remained unsold at year’s end. Though developers predict strong market growth, their projects’ emissions reductions are expected to outstrip historical offset demand, with developers expecting to reduce another 1.4 billion tonnes of emissions over the next five years. And most of these reductions will come from REDD projects.

The State of the Forest Carbon Markets 2013 is freely available. You can download the report here: http://www.forest-trends.org/fcm2013.php

 

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