* U.N. forest plan "obvious" step towards new climate pact
* Forest credit market needed, could cut emissions by 18 pct
By Nina Chestney and Michael Szabo
LONDON, July 14 (Reuters) - Finalising the United Nations’ forest conservation scheme is an obvious and critical step to agreeing a new global climate change pact, an economist at the United Nations Environment Programme (UNEP) said on Tuesday.
The G8 and other major economies last week agreed to restrict global warming to 2 degrees Celsius (3.6 Fahrenheit).
But they failed to persuade top emitter China and India to join a push to halve greenhouse gas emissions by 2050 — a blow to efforts to secure a successor climate treaty to the Kyoto Protocol after its 2012 expiry. [ID:nL8517833]
"There should be a complete reversal of priorities and countries should get on with what they can agree on, which is curbing deforestation," Pavan Sukhdev, a senior banker at Deutsche Bank currently on secondment with UNEP, told Reuters.
"We should be rewarding countries that are reducing deforestation and improving their conservation practices; nobody disagrees with this."
Reduced emissions from deforestation and degradation (REDD), the UN’s market-based forestry scheme, issues carbon credits as financial incentive to dissuade forest owners from logging.
Delegates from nearly 200 countries will meet for U.N. climate talks in Copenhagen in December to work towards a new agreement.
"I don’t see the mainstream climate negotiation carrying big stories other than frustration and more frustration," Sukhdev said, adding that 24 percent of global carbon dioxide emissions and 18 percent of all greenhouse gas emissions come from deforestation.
"With REDD, it’s sitting there staring at you, waiting for you to do the obvious," he said.
REDD trial schemes are now being run in developing countries like Cambodia, Indonesia and Brazil.
For a related factbox on REDD, click on [ID:nSP409319].
Distribution of REDD credit revenues still needs to be worked out, with the question addressed of how much cash will be invested in replanting in damaged or degraded areas.
Forest-rich governments should encourage developed nations to pledge some $20-30 billion per year to their REDD strategies, then create a fund to allocate the money to the best projects, Sukhdev said. "More money then will come from the private sector, but getting started is the problem," he added.
Some countries are already making progress in saving their forests through REDD, even if the plan’s details remain unclear.
Norway last year pledged $1 billion through 2015 to Brazil’s Amazon rainforest protection fund while Indonesia last Friday released revenue sharing rules governing credits, with 10-50 percent going to the Indonesian government and 20-70 percent going to local communities, depending on the type of forest.
Once money has been pledged, a forest fund is established and profit-sharing rules are in place, the creation of a marketplace buoyed by tight national emissions caps is key to driving REDD credit demand, Sukhdev said.
"The market will work with good, strong caps in a post-2012 agreement," he added.
"The welfare benefits from protected forests are already upwards of $4-5 trillion, twice the size of the global car industry and yet its employment is a tiny fraction of the car industry." (Editing by Anthony Barker)