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A key idea of REDD+ was to pay those who reduce deforestation and help keep carbon in the trees. A simple idea — how difficult could it be? Well, it turns out it has been much harder than imagined.

Last year, Arild Angelsen, a professor of economics at the Norwegian University of Life Sciences (NMBU) and a senior associate at the Center for International Forestry Research (CIFOR), and a number of CIFOR colleagues published the fourth book in a series on the topic, Transforming REDD+: Lessons and New Directions.

Making conservation of tropical forest ecosystems financially attractive for land managers is a central part of the theory of change underlying REDD+ (Reducing Emissions of Deforestation and forest Degradation), a U.N.-backed approach to help fight climate change.

For more than 10 years, through the Global Comparative Study on REDD+, CIFOR has been studying the efforts to establish “results-based payments” to protect tropical forests.

REDD+ (formerly REDD) was first negotiated under the UN Framework Convention on Climate Change (UNFCCC) in 2005, and scientists have been investigating its impacts since 2007.

The approach has met with moderate success, and the book, which includes contributions from the broader forestry community, explores some of its key challenges and opportunities for improvement.

It will be discussed at the U.N. COP 25 climate talks in Madrid.

The challenge results in part from the basis upon which REDD+ financing was conceived. Originally, the idea was that REDD+ would be part of a global carbon market, with REDD+ credits earned based on documented emission reductions. However, the market never took off as countries failed to agree on binding emission targets, which means that funding has so far taken the form of international aid.

One big question explored in the book chapter entitled “Results-based payment: Who should be paid and for what?,” is whether it is actually incentivizing behavior change at local and national levels.

With this in mind, through an impact assessment of REDD+ projects in local villages, Angelsen said he expects to see the spendings used in a variety of ways.

“If you look worldwide, you see a lot of variety: in some cases it might be improved agroforestry practices; some might build a school; some will simply split the cash amongst the households in the community,” he said.

In Peru, one such program is Transferencias Directas Condicionadas, which emerged from a 2014 agreement between the governments of Peru, Germany and Norway. Program communities, including some along the Ucayali River, are paid 10 soles ($3) per year for every hectare of forest that they keep standing. This particular program dictates that the money must be spent on a set menu of development activities and can’t be given to villagers as cash.

The concept might sound straightforward — reward communities, companies or households that are doing a great job of conserving their forests, and in so doing encourage others to follow suit — but in reality it’s anything but, says Angelsen.

“This is a four-year project, and what will happen after that?” he asks.

“Permanence is a key issue: will any reduction last, or will farmers revert to the same — or even higher — levels of deforestation after the project has ended?”

Results-based payment (RBP), where payments are conditional on carbon-friendly behavior, “was the key idea of REDD,” says Angelsen. But in the book, he and his fellow researchers concluded that RBPs “haven’t worked that well in actually providing the incentives for reduced deforestation.” Command and control, where resource use is directly regulated, has been more effective in the sites studied.

However, the payments are still important. “If you want to improve livelihoods and people’s wellbeing, it’s important to compensate,” he says. “And, for the long term sustainability of the REDD+ program, you need to provide tangible benefits to the forest stewards. You cannot eat reduced emissions for breakfast.”

RBP has been challenging to get right at the national level, too. It’s notoriously difficult to establish how much deforestation is being ‘avoided’ from year to year. “Just using historical levels is often not quite accurate because deforestation goes up and down, and there may be systematic trends,” says Angelsen.

What’s more, because countries themselves propose the reference level, and can choose from a number of ways of calculating it, there’s high potential and incentive to “game the system” and choose ways that produce a high reference level (for example by including high-deforestation outlier years in the calculation, and assuming greater deforestation as populations grow) in order to show greater emission reductions. “So you could put a reference level that is above historical levels,” he says, “and then even if you continue with the same level of deforestation, you could still produce credit.”

At the other end of the REDD+ financing chain, there are also difficult questions to ask, says CIFOR scientist Stibniati Atmadja, who co-authored another chapter in the book titled “Financing REDD+: A transaction among equals, or an uneven playing field?.”

She and her co-authors aimed to lay out a global picture of where REDD+ funding comes from and what activities it’s being spent on. But they found that there was much more data available for some kinds of funders than others, which had the potential to skew the picture considerably: “The data is incomplete for some, and more complete for others, which makes it look like the ones that have the data are the ones that give the most money,” she said. “When in fact that might not be the case.”

For instance,  Organisation for Economic Co-operation and Development (OECD) donors’ contributions are very comprehensively tracked, while private sector and domestic financing is not reported in the same way.

“This makes a big difference when you start negotiating at the global level,” says Atmadja, “because those that have the data can say, ‘look, we’re funding this, so you have to hear what we say’… So this is a real inequity issue that stems from data.”

The researchers found that a lot of the cost of REDD+-related activities is carried by the countries in which they are taking place — both financially and through the time and labour provided by local government officials and community members, which is very difficult to calculate and track.

“So you have this huge amount of domestic funding that doesn’t get captured,” says Atmadja. “And it gives the impression that these governments are the recipients, in a giver and receiver type relationship. But if the data were more sound, it would show that it’s not like that at all.”

Moreover, the opportunity costs of forest conservation – that is, the foregone benefits from agricultural and timber production – are mainly borne by the REDD+ countries and not compensated, even though they represent the greatest costs of the entire program.

For example, a recent study showed that in Indonesia in 2016, the domestic allocation of state budget for climate change mitigation through the forestry sector was around 30 times what donors were giving to the country for that cause.

“It’s never going to be a perfect calculation, because it’s impossible to fully capture the in-kind work of communities and sub-national governments,” says Atmadja. “But at least at the national level, budget allocations could be captured and taken into account.”

With big challenges like these, is REDD+ still a viable pathway for climate-change mitigation? Angelsen thinks the key principles of the program — national-level, coordinated policy and RBP — remain important to address the problem of forest destruction and degradation contributing to climate change.

“Maybe REDD+ in some parts of the world it’s gotten a bad reputation — perhaps because of carbon cowboys or mismanagement of funds or the way it was approached by the governments or the project proponents — so it may be there with a different name,” he says.

CIFOR-ICRAF@COP25

2-13 December 2019

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“And it should be — I mean, the name is not sacred. But I think it will continue in some form, for sure. Key elements, such as incentivizing and compensating those that shoulder the costs of forest conservation, are worth conserving.”

Join CIFOR at COP25 in Madrid for a press conference focused on the book, Transforming REDD+: Lessons and New Directions, in Spanish language on Monday, Dec. 9, from 10 to 10:30 a.m. CET (9-9:30 a.m. GMT) in the CHILOE Press Conference Room in Hall 10 at IFEMA – Feria de Madrid, Avda. del Partenón, 5, 28042. The press conference will be broadcast live.

Check out other events CIFOR and ICRAF are hosting here.