High stakes

As the UN climate change negotiations limp along from summit to summit, ideas on how to tackle forest issues have garnered broad consensus among governments of developing and advanced countries. The final design of the funding scheme remains controversial nonetheless.

By Korinna Horta

The acronym REDD stands for “Reducing Emissions from Deforestation and Forest Degradation”. It was first used at the UN climate summit in Bali in 2007. Today, the more common term is REDD+, which is used for one of the best-funded initiatives designed to address climate change. Even though it is embraced by many parties, the question of how to implement it remains controversial.

So what is the concept behind REDD? The destruction of tropical forests contributes an estimated 15 % to 20 % to the greenhouse gases generated by human activity, so the original idea was to compensate countries if they reduce their deforestation rates. This way, climate change can be mitigated in a cost-effective and fast manner. Although improving forest management is a complex task, it is obviously much easier than transforming entire economies that are based on fossil fuels.

The “+” in REDD+ stands for similarly compen­sating countries that avoid deforestation in the first place. Unless that is done, REDD could provide perverse incentives since countries with high deforestation rates would be likely to benefit most. REDD+, moreover, also rewards countries for expanding their forest areas. Such activities are referred to as “enhancement of carbon stocks”. In any case, the implementation of a global REDD+ scheme should result in considerable reductions of carbon emissions.

Vast funds are being discussed for REDD+. It is estimated that a 50 % reduction of current deforestation rates would cost about $ 30 billion annually. The international community has not taken decisions on REDD+ funding so far. In light of serious budgetary constraints in developed countries, many governments consider the creation of forest carbon markets as the most promising approach. To date, there is only a relatively small and largely unregulated voluntary carbon market in which countries or companies sell credits for certified forest-related reductions of carbon emissions. Buyers use such credits to compensate for greenhouse gases they have emitted elsewhere.

In order to create a much larger REDD+ credit market, multilateral climate negotiations must do two things. They must:
– set clear and mandatory targets for reducing emissions and
– establish an international cap-and-trade system.

However, forest carbon markets are controversial. The Munden Project, a private firm specialising in commodities and derivatives, published a detailed technical study. It highlights the risks of merely quantifying forests as a commodity and trading this commodity in a derivatives style system. Such trading would largely benefit intermediaries and traders on financial markets, but the intended development benefits promised by REDD+ would not be achieved (Munden Project 2011).

To date, REDD programmes have mostly been funded by government agencies through bilateral and multilateral aid channels. For the period 2010–2012, governments committed the considerable amount of $ 8 billion for these purposes.

Multiple benefits

Donor governments that promote REDD+ tend to emphasise that REDD+ does more than mitigate climate change, pointing out welcome side-effects such as the protection of biodiversity and the generation of rural incomes. Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) argues this way too.

Nonetheless, much of the optimism surrounding REDD+ needs tempering. There are serious challenges (see box below), including scientific uncertainties, technical challenges and some politically sensitive issues that relate to forest governance and land tenure. The latter are especially sensitive because they directly affect the political economy of most tropical forest countries.

So far, only few countries apart from Brazil have the capacity to monitor their deforestation rates. Most tropical countries lack reliable data. Typically, they do not even have strong national institutions that might provide accurate forest data.

Satellite technology is helpful, especially if it penetrates the dense cloud cover that commonly stretches over tropical forests. But satellite data are not reliable in themselves. The results must be confirmed by research on the ground. The science of measuring forest degradation is even more difficult.

Such uncertainties are compounded by the fact that avoided forest carbon emissions are an intangible asset. Assessing their worth depends on complex measurements and calculations. Accordingly, there is scope for data manipulation and corruption. Billions of dollars are potentially at stake, and Interpol already uses the category “carbon crime” (Global Witness 2011).

Socio-political concerns

All in all, the risks are considerable that any future REDD+ scheme will not reward genuine emission reductions. A more pragmatic approach would make sense if it measured the enforcement of social and environmental safeguards as well as the implemen­tation of forest governance reforms.

For REDD+ programmes to succeed, the drivers of deforestation must be identified. International demand for timber, beef, pulp/paper, palm oil and agro fuels is often closely associated with the forces driving de­forestation. Questions of land and resource ownership must be resolved, and the roles of indigenous ­peoples and other forest-dependent communities must be acknowledged. Moreover, transparent and equitable systems to share the benefits of REDD+ are needed. Unless the underlying drivers of deforestation are tackled, REDD+ programmes are unlikely to make a meaningful difference – no matter how much money is made available. Typically, deforestation serves powerful interests. That is the case, for instance, when it results in the expansion of large-scale plantations or mining. Logging is relevant too, both as a formal and an illegal industry. According to a recent World Bank study, the international market in illegal timber is worth $ 10 billion to $ 15 billion annually (Gonçalves 2012).

In recent REDD+ negotiations, there was little indication of global consumption patterns being addressed in a comprehensive strategy to reduce deforestation. While the need for tackling the drivers of deforestation is widely recognised, the political will seems to be lacking so far to really change destructive land-use practices.

Instead of considering the root causes of forest loss, some governments are even blaming poor peasants and traditional agriculture for deforestation. For example, the Thai government considers forest-­dwellers to be slash-and-burn forest destroyers. A recent study published by non-governmental organi­sations from Thailand in cooperation with Oxfam, however, documents that these people’s agricultural and forest practices actually sequester greenhouse gases and ensure food security and livelihoods (Northern Development Foundation et al. 2011).

There are great risks of the rich and powerful appropriating forest resources they increasingly view as lucrative carbon reservoirs. Land grabs, expropriation and reduced access to vital resources for indigenous and other forest-dependent people look imminent.

In Peru, a confederation of indigenous people’s organisations launched an alert in December 2011, stating that 20 million hectares of indigenous territory in the country’s Amazon region are not legally recognised by the government (Llanos and Feather 2012). At the same time, some of the forest land concerned is being targeted for “REDD concessions” which would probably restrict indigenous communities’ access.

An estimated 1.6 billion people in the world depend on forests for all or part of their livelihoods. Women and indigenous peoples will be most affected by REDD+. A recent UN publication warns that REDD+ may exacerbate existing inequalities if women, who are the primary users of forests, are not ad-­ equately represented in decision-making on REDD+.

Free prior and informed consent

Concerning indigenous peoples, the Human Rights Strategy adopted by Germany’s BMZ in 2011 endorses the principle of “free prior and informed consent” (FPIC) of indigenous peoples and local communities for projects that affect their traditional land. FPIC is enshrined in the United Nations Declaration on the Rights of Indigenous Peoples of 2007. Nonetheless, it is still unclear whether a future global REDD+ scheme will respect FPIC.

The World Bank’s Forest Carbon Partnership Fa­cility (FCPF), for instance, is the leading multilateral initiative on REDD+, and Germany is the single largest financial contributor. This Facility does not recognise FPIC as defined by the UN. Instead, it applies the World Bank’s own social and environmental safeguards, which only require free prior and informed consultation, but not consent.

If REDD+ is to become a reliable instrument for mitigating climate change, it must be sustainable in socio-political terms. The Forest Carbon Partnership Facility accepts this plain truth in theory, but there is no guarantee that it will, for practical purposes, insist on forest governance reforms and the strengthening of land tenure rights of local communities.

The main merit of REDD+ is that it has created the political space for addressing questions of forest governance, corruption, land tenure and the rights of indigenous peoples. These are complex political and social problems. Unless they are dealt with in an equitable and effective way, REDD+ will neither contribute to mitigating climate change nor to achieving the aspired side-benefits of biodiversity conservation and better livelihoods for forest-dependent people.

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