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Environment & Poverty Times No. 5

Making REDD work for the poor

Go international

The importance of ecosystems services doesn’t stop at country borders, nor does the interest in exploiting them. International conventions can help to find a balance for sound environmental management and poverty reduction.

By David Huberman, International Union for Conservation of Nature, and Leo Peskett, Overseas Development Institute

Deforestation and land degradation are estimated to account for around 20 per cent of global anthropogenic greenhouse gas emissions and are therefore major drivers of global climate change. These factors, combined with growing global concerns about catastrophic climate change, have fuelled international interest in developing financial mechanisms to slow deforestation and degradation rates.

Most proposals for such mechanisms to ‘Reduce Emissions for Deforestation and Degradation’ (REDD) are still on the drawing board but they are all based on the idea that developed countries would pay developing countries to reduce deforestation rates by implementing policies and projects aimed at preserving the forests. By linking such payments to carbon markets (i.e. putting a value on the carbon storage capacities of forests and the value of halting emissions from such areas) under the United Nations Framework Convention on Climate Change (UNFCCC) regime, substantial amounts of money could be transferred to developing countries: some estimates suggest more than USD 15 billion per year would be available, a figure which dwarfs existing aid flows to the world’s forest regions.

But whilst the theory is relatively simple and the environmental and financial benefits are potentially massive, putting REDD into practice is no easy task. First and foremost in the international debate at present are the technical and political hurdles – how to monitor and measure emissions, how to establish “baselines” against which to assess performance and how to build a system that can be readily adapted to the needs and interests of countries with very different forest sectors. These questions have to be answered in order for REDD to become a reality. But equally important, are questions about the social implications of these financial incentive mechanisms for poor people. The benefits could be large, if they are designed with the interests of the poor in mind. The concern is that these are already being overlooked and that REDD will pose risks for the poor.

The benefits that REDD offer for poor people centre around the potential financial value of carbon stored in tropical forests. Even in areas with modest carbon stocks, the value at current market prices for carbon would often far exceed the value of land for other uses, such as conversion to agriculture. In an ideal world, land owners could therefore stand to gain from direct financial payments for preserving or sustainably managing forests. There may also be indirect benefits – creation of local employment opportunities, improvement in local environmental quality and a strengthening of local institutions.

In reality, the risks may be much greater, given the practical challenges involved in successfully channeling benefits to the poor. Experience with similar incentive mechanisms to do with forest conservation, such as ‘payments for ecosystem services’ (PES), indicates that difficulties accessing markets due to technical complexities, high implementation costs and insecurity of land tenure, can lead to benefits being inequitably distributed. The poor might not have a say in the negotiation of contracts on implementing REDD type schemes: they also face losing the use of forest resources. Another consequence of implementing REDD might be that political elites, seeking to gain financially from REDD, would put a stop to certain land uses such as shifting cultivation – which could be designated as a form of “degradation” – even though such activities are often vitally important for poor people.

Clearly crucial to the success of REDD is a clear understanding of the context in which the regime is being implemented and of the potential risks that could arise from even the most carefully designed systems. Transparent and accountable governance structures and clear standards will need to be in place to increase participation in the design of REDD. There will also need to be ready access for all parties involved to processes such as dispute resolution mechanisms in the event of problems. At the same time, in order to maximize benefits to the poor, such systems will need to be simple and cost-effective.

It remains to be seen whether all of these requirements can be met, and whether REDD can be made to work in favour of the poor. Keeping the poor at the forefront of the REDD debate, at this crucial phase in the international process, will increase the chances of developing systems which are sustainable in the long run, both in terms of climate and the forests – and also of people.

 

World Poverty Distribution

Forests working for the global climate

Carbon trading of credits from avoided deforestation could yield billions of dollars for tropical countries, according to an analysis by Rhett A. Butler, founder and editor from Mongabay.com, a leading tropical forest web site. The proposed mechanism – Reducing Emissions from Deforestation in Developing Countries (REDD) – will enable these countries to maintain their forests as a global resource.

Using conservative estimates on carbon storage in tropical forests for the 17 developing countries in this figure, a reduction in the annual deforestation by 10 per cent would generate more than USD 600 million per year with carbon prices at USD 5 per ton. A higher estimate on the carbon prices, at USD 30 per ton, would generate USD 2500 million in income from the proposed programme. Due to differences in the forest composition and climate, the carbon content can differ greatly – rainforests in French Guiana has an estimate of five times as much carbon content compared to the forests of Indonesia.

World Poverty Distribution

Foreign countries fishing for the Mauritanian fish

Marine fisheries represent a significant, but finite, natural resource for coastal countries. The majority of the catches, in some coastal areas, are not primarily done by the coastal country, but rather by other countries. For example in this case, where countries from Europe and Asia (Japan and South Korea are in the “others” group) represent the majority. According to this estimation, Mauritania only landed about 10 per cent of the total catch in 2002, with The Netherlands as the nation with the largest catch (23 per cent) in this zone.