Forest Carbon Scheme Gains Support, Faces Hurdles

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Among the few policy agreements to emerge from December's United Nations climate summit was recognition of the "immediate" need to sequester more greenhouse gases in forests through a mechanism known as Reducing Emissions from Deforestation and Forest Degradation, or REDD

The Copenhagen Accord, a non-binding document drafted by Brazil, China, India, South Africa, and the United States at the summit in the Danish capital, is the first international agreement to recommend that financial resources support REDD. During the summit, Australia, France, Japan, Norway, the United Kingdom, and the United States offered a $3.5 billion funding package for REDD preparation.

The program is considered a relatively affordable emission-reduction strategy that could also protect threatened tropical ecosystems and support rural communities. "This is wonderful news," said former Costa Rican politician Carlos Rodriguez, who now directs Conservation International's programs in Mexico and Central America. "When I was environment minister I pushed for this and no one cared.... Now there is a general understanding on the need to have REDD as an outcome."

While support for the policy has grown, considerable progress is still necessary before multinational organizations, national governments, and local authorities are ready to administer REDD programs, analysts said. Without proper reforms, the program threatens to increase human rights violations, land conflicts, and forest-sector corruption, and REDD's ability to reduce emissions would be in doubt.

"If significant payments were to flow today, REDD programs would be challenged to meet the tests of effectiveness in reducing emissions, efficiency in channeling funds, and equity in distribution," said Frances Seymour, director general of the Indonesia-based Centre for International Forestry Research.

Emission reductions and land reform collide

On the surface, REDD is a simple idea. Forested countries receive funding to limit their deforestation rates, boost forestation programs, or minimize the loss of carbon through forestry activities. Yet donor countries remain wary about how payments will be spent. So far, recipient countries decide whether funding is directed to nationwide forestry programs or dispersed among forest-reliant communities and industries. 

The first question for any REDD project is who owns the land where the carbon is to be stored. The answer determines who collects REDD payments and who bears responsibility for ensuring that the stored carbon is not released into the atmosphere.

Governments continue to claim ownership of most forestland - some 75 percent worldwide, according to a report released last month by the Rights and Resources Initiative. In many cases, however, farming communities and indigenous groups have resided on much of the land for generations.

Latin America has undergone the most significant change in land tenure, increasingly providing private firms, individuals, local communities, and indigenous people with legal recognition for their land. More than 60 percent of the region's land was owned by a non-governmental authority in 2008, compared to some 30 percent in 2002, according to the Initiative.

In areas where land rights remain unclear, governments or private industry may displace forest communities from their homes to gain access to forest carbon, human rights campaigners warn. Where indigenous groups or communities clearly own the forests, environmental and human rights groups are reporting instances of REDD project developers offering contracts without fully explaining the deals' consequences.

"REDD can be set up right to protect the people of the forest. It can also be set it up to destroy them," said WWF President Carter Roberts at a side event in Copenhagen. The United Nations, World Bank, and several non-governmental organizations have held REDD workshops during the past two years with indigenous groups, farmer associations, and other involved communities to improve awareness at the local level.

Reforestation projectLacking scientific expertise, government accountability

Once communities have agreed to participate in a REDD scheme, scientific expertise is often lacking to measure and monitor carbon stored in forest ecosystems. Governments are also ill prepared to ensure that the funding reaches the intended researchers and appropriate development organizations.

Of the 120 countries that may participate in a REDD program, only six of them host institutions with trained forest carbon experts who are connected to the U.N. system: Brazil, China, India, Mexico, Singapore, and South Korea, according to a U.N. Food and Agriculture Organization (FAO) presentation during the Copenhagen summit. The FAO recognized potential experts in another 20 countries who have not formed institutional ties with the U.N. The remaining 94 countries were classified as lacking any technical or institutional capacity for REDD.

"Available experts in the world are very few.... Nobody is teaching greenhouse gas inventory at a university level," said Danilo Mollicone, an FAO forestry officer. "We need to take all experts from the U.S., Germany, Australia, and work together to bring information [to developing nations]."

Many of the countries seeking participation in a REDD mechanism also rank among the most corrupt in the world, placing doubts on whether REDD payments could effectively halt illegal logging. Anti-corruption programs would need to be institutionalized before REDD payments could flow directly to local communities, analysts said.

Indonesia, for instance, received more than $200 million in aid commitments during the Copenhagen summit to help meet its 26-percent emission reduction targets. While the goal relies mostly on curbing emissions from forestry and peatlands, a University of Indonesia study released last month reveals that from 1999 through 2006, high-ranking members of the Indonesian military regularly accepted bribes from the forestry industry in exchange for logging permits, invested directly in logging companies, and clearly ignored illegal deforestation in the heavily cleared tropical areas of East Kalimantan.

The World Bank's World Governance Indicators project, a 212-country corruption and accountability survey, ranked 30 of the 37 countries participating in the Bank's REDD program, known as the Forest Carbon Partnership Facility, among the 106 worst-governed countries. "There is a general picture of weak forest enforcement across the board," said Rosalind Reeve, an associate fellow at Chatham House, a London-based think tank.

Illegal deforestation could be curtailed if REDD payments help to develop independent forest monitoring systems, Reeve said. For instance, a Global Witness program in Cameroon improved forest management and assisted the government's efforts to punish illegal loggers, at a cost of $500,000 per year. "Don't panic: a cost-effective option is available and experience does exist from the past 10 years," Reeve told colleagues in Copenhagen.

Investors surge ahead

Despite the lingering questions, private companies and investors are depositing an increasing amount of money in programs that store carbon in forests. The investments are mostly voluntary in anticipation of government-imposed greenhouse gas restrictions, the research group Ecosystem Marketplace reported in an analysis released last month.

The report estimated that the global forest carbon market was worth $71.6 million in 2007-08 and $21 million in the first half of 2009. Afforestation projects - planting seeds or trees on non-forest land - received most of the 2008 investments (53 percent), while REDD-focused projects accounted for 24 percent.

Additional support for REDD and other forest-based carbon projects will depend on whether international and domestic climate mitigation efforts impose limits on forest-related greenhouse gas emissions and establish funding mechanisms to support carbon sequestration initiatives, such as a cap-and-trade program.

Given the significant support for REDD in Copenhagen, industrialized and developing countries are likely to continue their efforts to fund and manage forest carbon efforts, according to Elly Baroudy, manager of the World Bank's BioCarbon Fund. "However we move forward, forest carbon is there," she said.

Ben Block is a staff writer with the Worldwatch Institute. He can be reached at bblock@worldwatch.org.

For permission to republish this article, please contact Juli Diamond at jdiamond@worldwatch.org.