International carbon policies as a new driver for peatland restoration

Introduction When – in 2006 – experts and advocacy groups for the first time raised the issue of GHG emissions from degraded peatlands at the United Nations Framework Convention on Climate Change (UNFCCC), they met with negotiators, many of whom had never heard of ‘peat’ in the first place. Six years later, the UNFCCC allowed countries to comply with their reduction commitments by peatland rewetting and included peat soils in the REDD+ mechanism to reduce emissions from tropical deforestation. After years of neglect, peatlands have gained the attention that they deserve in the face of their enormous emissions and mitigation potential (Chapter 4). This chapter discusses the potentials and complications of using climate change mitigation policies for stimulating and financing peatland restoration using the Climate Convention, in the context of voluntary carbon markets and through policies with indirect climate targets. Many land use-oriented mitigation mechanisms have been developed with a forest bias, i.e. from the perspective of biomass carbon stocks. In using existing approaches to address peatlands, concepts and criteria thus have to be modified, complemented or newly developed to accommodate the specific peculiarities of peatlands – often after wearying awareness raising. Market-based instruments are recognised as important elements of the international climate finance architecture. Since the entry into force of the Kyoto Protocol (2005), about 3 billion Kyoto units, each of these representing 1 t CO 2 e, have been traded at least once for prices ranging from less than 1 EUR per unit to 20 EUR and more. The annual market value of national and subnational cap-and-trade systems (outside Kyoto) stands at USD 30 billion (World Bank 2014). These large sums, in combination with the huge carbon stocks in peatlands, have nurtured the idea that peatland restoration is an effective way of tapping into climate finance. However, reality is more complicated – as this chapter will show. Beyond carbon trading proper, this chapter also addresses some future options for stimulating peatland restoration. Large peatland emissions occur both in industrialised and developing countries (Figure 15.1), and the ongoing negotiations within the post-2020 climate framework offer various opportunities to create peatland restoration incentives.