REDD, or reduced emissions from deforestation and forest degradation, is one of the most controversial issues in the climate change debate. The basic concept is simple: governments, companies or forest owners in the South should be rewarded for keeping their forests instead of cutting them down. The devil, as always, is in the details.
The first detail is that the payments are not for keeping forests, but for reducing emissions from deforestation and forest degradation. This might seem like splitting hairs, but it is important, because it opens up the possibility, for example, of logging an area of forest but compensating for the emissions by planting industrial tree plantations somewhere else.
The idea of making payments to discourage deforestation and forest degradation was discussed in the negotiations leading to the Kyoto Protocol, but it was ultimately rejected because of four fundamental problems: leakage, additionality, permanence and measurement.
- Leakage refers to the fact that while deforestation might be avoided in one place, the forest destroyers might move to another area of forest or to a different country.
- Additionality refers to the impossibility of predicting what might have happened in the absence of the REDD project.
- Permanence refers to the fact that carbon stored in trees is only temporarily stored. All trees eventually die and release the carbon back to the atmosphere.
- Measurement refers to the fact that accurately measuring the amount of carbon stored in forests and forest soils is extremely complex – and prone to large errors.
Although much has been written about addressing these problems, they remain serious problems in implementing REDD, both nationally and at project level.
REDD developed from a proposal in 2005 by a group of countries lead by Papua New Guinea calling themselves the Coalition for Rainforest Nations. Two years later, the proposal was taken up at the Conference of the Parties to the UNFCCC in Bali (COP-13). In December 2010, at COP-16, REDD formed part of the Cancun Agreements, in the Outcome of the Ad Hoc Working Group on long-term Cooperative Action under the Convention.
REDD is described in paragraph 70 of the AWG/LCA outcome:
“Encourages developing country Parties to contribute to mitigation actions in the forest sector by undertaking the following activities, as deemed appropriate by each Party and in accordance with their respective capabilities and national circumstances:
(a) Reducing emissions from deforestation;
(b) Reducing emissions from forest degradation;
(c) Conservation of forest carbon stocks;
(d) Sustainable management of forest;
(e) Enhancement of forest carbon stocks;”
This is REDD-plus (although it is not referred to as such in the AWG/LCA text). Points (a) and (b) refers to REDD. Points (c), (d) and (e) are the “plus” part. But each of these “plus points” has potential drawbacks:
- Conservation sounds good, but the history of the establishment of national parks includes large scale evictions and loss of rights for indigenous peoples and local communities. Almost nowhere in the tropics has strict ‘conservation’ proven to be sustainable. The words “of forest carbon stocks” were added in Cancun. The concern is that forests are viewed simply as stores of carbon rather than ecosystems.
- Sustainable management of forests could include subsidies to industrial-scale commercial logging operations in old-growth forests, indigenous peoples’ territory or in villagers’ community forests.
- Enhancement of forest carbon stocks could result in conversion of land (including forests) to industrial tree plantations, with serious implications for biodiversity, forests and local communities.
There are some safeguards annexed to the AWG/LCA text that may help avoid some of the worst abuses. But the safeguards are weak and are only to be “promoted and supported.” The text only notes that the United Nations “has adopted” the UN Declaration on the Rights of Indigenous Peoples. The text refers to indigenous peoples’ rights, but it does not protect them.
But perhaps the most controversial aspect of REDD is omitted from the REDD text agreed in Cancun. There is no mention in the text about how REDD is to be funded – the decision is postponed until COP-17 that will take place in Durban in December 2011.
There are two basic mechanisms for funding REDD: either from government funds (such as the Norwegian government’s International Forests and Climate Initiative) or from private sources, which would involve treating REDD as a carbon mitigation ‘offset’, and getting polluters to pay have their continued emissions offset elsewhere through a REDD project. There are many variants and hybrids of these two basic mechanisms, such as generating government-government funds through a “tax” on the sale of carbon credits or other financial transactions.
Trading the carbon stored in forests is particularly controversial for several reasons:
- Carbon trading does not reduce emissions because for every carbon credit sold, there is a buyer. Trading the carbon stored in tropical forests would allow pollution in rich countries to continue, meaning that global warming would continue.
- Carbon trading is likely to create a new bubble of carbon derivatives. There are already extremely complicated carbon derivatives on the market. Adding forest carbon credits to this mix would be disastrous, particularly given the difficulties in measuring the amount of carbon stored in forests.
- Creating a market in REDD carbon credits opens the door to carbon cowboys, or would be carbon traders with little or no experience in forest conservation, who are exploiting local communities and indigenous peoples by persuading them to sign away the rights to the carbon stored in their forests.
Yet many REDD proponents continue to argue that carbon markets are needed to make REDD work. Environmental Defense Fund, for example, on its website states that,
“Reducing emissions from deforestation and forest degradation (REDD), which EDF helped pioneer, is based on establishing economic incentives for people who care for the forest so forests are worth money standing, not just cleared and burned for timber and charcoal. The best way to do this is to allow forest communities and tropical forest nations to sell carbon credits when they can prove they have lowered deforestation below a baseline.”
While there has not yet been any agreement on how REDD is to be financed, a look at some of the main actors involved suggests that there is a serious danger that it will be financed through carbon trading. The role of the World Bank is of particular concern, given its fondness for carbon trading.
The World Bank’s main mechanism for promoting REDD is a new scheme, launched in Bali in 2007: the Forest Carbon Partnership Facility (FCPF). The FCPF was set up with the explicit aim of creating markets for forest carbon, as the Bank announced in a press release on 11 December 2007:
“The facility’s ultimate goal is to jump-start a forest carbon market that tips the economic balance in favor of conserving forests, says Benoit Bosquet, a World Bank senior natural resources management specialist who has led the development of the facility.”
Carbon markets are not included in the Cancun REDD text. Yet in December 2010, the World Bank’s Special Envoy for Climate Change, Andrew Steer, wrote that one outcomes of Cancun was that “Forests [are] firmly established as a key for addressing climate change, and to be included in a future carbon trading system.”
There is a serious risk of REDD leading to increased corruption, if large sums of money start to flow – particularly for unregulated trade in REDD carbon credits in poorly governed countries. Forestry departments are among the most corrupt departments in some of the most corrupt countries in the world. The complexity of carbon markets combined with poor regulation leads to the increased risk of fraud and corruption in the rich countries. Billions of dollars have already been lost from carbon markets in Europe through fraud.
Peter Younger at Interpol is already concerned. “Alarm bells are ringing. It is simply too big to monitor,” he said in October 2009, adding that “Organised crime syndicates are eyeing the nascent forest carbon market.”
“Fraud could include claiming credits for forests that do not exist or were not protected or by land grabs. It starts with bribery or intimidation of officials, then there’s threats and violence against those people. There’s forged documents too. Carbon trading transcends borders. I do not see any input from any law enforcement agency in planning REDD.”
Without monitorable and enforceable safeguards, and strict controls and regulation, REDD may deepen the woes of developing countries – providing a vast pool of unaccountable money which corrupt interests will prey upon and political elites will use to extend and deepen their power, becoming progressively less accountable to their people. In the same way that revenues from oil, gold, diamond and other mineral reserves have fuelled pervasive corruption and bad governance in many tropical countries, REDD could prove to be another ‘resources curse’. Ultimately, this will make protection of forests less likely to be achieved and will do nothing to ameliorate carbon emissions.
This Introduction was updated in February 2011. A previous version from October 2008 is available here (pdf file 98.2KB).