An Integrated REDD Offset Program (IREDD) for Nesting Projects under Jurisdictional Accounting

De Gryze, S., Durschinger, L.
November, 2010

REDD has emerged as a cost-effective method of generating carbon credits with critical environmental and social co-benefits. However, concerns regarding accounting for leakage from REDD projects have delayed the acceptance of REDD credits into compliance systems. It is generally recognized that the larger the geographic region over which changes in forest cover are monitored, the more precise and complete the estimation of REDD credits from projects developed within this region. This increase in precision is due to the ability to more accurately account for non-intended changes in forest cover outside of project areas related to leakage. Therefore, the acceptance of REDD credits in a compliance system will require emissions accounting at a (sub)-national level. It is critical that while (sub)-national accounting systems are being developed, local REDD projects within a larger geographical region are catalyzed and encouraged, and that the carbon benefits from these initiatives flow to the responsible stakeholders.

The term “nested REDD” has emerged to describe the policy framework allowing offsets generated from spatially defined REDD project activities to be reconciled with reductions in deforestation or degradation within a much larger jurisdiction such as a state or other sub-national level. While nested REDD is being designed to address the limitations of project-based REDD, spatially explicit projects and project areas still exist under the nested REDD framework. The distinction is that, under nested REDD, the quantification of emissions reductions from projects must be reconciled with emissions that are accounted for across a larger region, referred to as the Jurisdiction.

In this paper, we introduce an Integrated REDD (IREDD) system, which is a nested REDD system where (1) credits can only be generated from formally registered project areas, (2) incentives are built-in to maximize the formally registered project area within a given jurisdiction, and (3) funding mechanisms are in place to support government programs and policies that promote reductions in deforestation but have no direct and causal relation with empirically observed emission reductions. In the paper, we substantiate how the IREDD approach avoids the creation of non-additional credits while providing support for private investment and rewarding project actions that are causally related to reduced emissions or greenhouse gas removals.