I. Executive Summary
Deforestation and land degradation are responsible for about 20 percent of global carbon emissions,1 and are therefore a growing focus of international climate policy discussion. Scientists have long pointed to the critical role of land use, land use change and forestry in addressing and mitigating climate change, and discussion about the use of market-based incentives (MBIs) to encourage good practice has been building for some time.
In the last few years, experimentation and investment have grown significantly, particularly in the non-regulated voluntary carbon markets. Although forestry and land use activities only account for approximately 1 percent of the volume of regulated carbon trading schemes,2 discussion is growing around how to significantly expand this volume.
As companies craft climate change strategies, corporate decision-makers will increasingly encounter the question of whether to invest in carbon sequestration through forestry and land use initiatives (referred to here as bio-carbon initiatives). At present, one of the most popular programs that companies are engaged in involve planting trees. However, fewer businesses have considered the full set of investment options, which include expanding and improving managed forest initiatives, changing land management or agricultural practices to enhance soil carbon sequestration, and addressing deforestation, thus preventing greenhouse gas emissions that occur when forests are cleared.
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