NEWS

DEBATE: Experts disagree on use of government funds to support struggling REDD+ projects
Illustration by Frits Ahlefeldt

DEBATE: Experts disagree on use of government funds to support struggling REDD+ projects

By Michelle Kovacevic

 

Experts agree that REDD+ suffers from a lack of predictable finance. They also agree that increased demand for REDD+ emission reductions would catalyze private sector investment and activities on the ground. 

What they don’t agree on is the role that government should play in providing such finance. 

That’s what has emerged so far in our science policy debate series: The Ring.

Several debaters point out the many good reasons to pay for forest carbon via a UN-backed mechanism to Reduce Emissions from Deforestation and forest Degradation (REDD+).

A good idea

“[REDD+] activities have contributed to, and spurred the development of methodologies, have led to advances in MRV, focused attention on benefit sharing, helped shape our thoughts on safeguards, led to debate on how we will finance REDD+ activities, and so on,” says Iain Henderson of UNEP’s Finance Initiative.

“REDD+ has also ushered in an age where politicians talking on the international stage about the importance of forest ecosystems in underpinning economic systems has become the norm – statements that would have been unimaginable only eight or nine years ago,” says Matt Leggett from the Global Canopy Programme. 

“Similarly, REDD+ has also introduced the idea that large scale results-based funding for forests can have transformational effects across a wider landscape, far beyond the traditional forestry sector,” he said.

But with the majority of funding to date being channeled to REDD+ readiness and capacity building, many tropical countries are increasingly ready, often at the sub-national level, and are asking the question “what’s next?”, comments Agustin Silvani Managing Director of Carbon Finance at Conservation International.

“The reality is that we don’t know what comes next. We – the international community – are learning by doing, making any form of “early action” incredibly valuable,” Silvani says.  

Keeping their word

As the climate convention in Warsaw finalized an international rulebook last December, one necessary step forward will be to undertake large-scale proofs of concept in a few tropical countries, says Jonah Busch from the Center for Global Development. 

“Rich countries should make sure REDD+ works this time by committing to purchase verified emission reductions, at large scale, in a few places.”

Governments face a clear choice, says Leggett. “Act now to commit sufficient finance to incentivize REDD+ [estimated at US$12bn in a recent report by the Interim Forest Finance project] and plug the demand gap before 2020, or risk derailing the whole system.” 

Why should governments act? First, to keep their word, and second, to prime the pump for more private-sector investment down the road, argues Steve Zwick of Ecosystem Marketplace.

Small, individual REDD+ projects have made huge progress in the face of regulatory uncertainty, Zwick says. “Countries that have nurtured them are in danger of being short-changed, and private-sector investors who put their faith in the good intentions of governments are deep in the red. This is hardly the way to encourage support for REDD moving forward.”

Henderson agrees, providing some words of wisdom from outside the blinkered confines of REDD+. 

“Many captains of industry are on record stating that their ultimate success was built on the value generated by ideas that didn’t always work out.” 

“These experiments are not buried shamefully from view. They are often taken as a treasure trove of knowledge and experience that allowed the ultimate scaled-up version to be more efficient and effective.”

Over the past few years, we have learned a huge amount that will ultimately improve REDD+, Henderson says.

“We should not throw those who have contributed to this, and the communities that depend on the associated revenue, to the wolves. We will need this knowledge in the years to come and are in danger of allowing what will be an important pool of knowledge and experience evaporate.” 

Don’t be short sighted

But a short-sighted government bailout now won’t save those REDD+ projects or the REDD+ scheme in the long run, argues James Griffiths of the World Business Council for Sustainable Development.

Rather, REDD+ investment should focus on creating enabling conditions that not only enhance carbon stocks but also support other investments that can generate incomes for local economies such as secure land tenure, clear resource use rights, transparency, free access to information and strong capacity for sustainable forest management down to the community level, he says.

Incentivizing REDD+ benefits beyond carbon will “in turn reduce the risks and build a stronger business case for the private sector to get engaged and stay “involved” in REDD+: either as buyers of carbon credits, suppliers of credits through sustainable forest management projects; or investors in other incomes streams coupled with carbon benefits,” he says.

Choose carefully

Providing the donor country perspective, Donna Lee, a former US negotiator on REDD+, rounds out her view of the role of the government by pointing out that there are both appropriate and inappropriate times for governments to provide a bailout. 

“The role of government is to create a system that protects us from dangerous global warming and internalizes the values of forests”, she says, but points out that a decision by government to bail out a project can send messages that prove counterproductive.

“Many economists believe that using government funds for bailouts creates a ‘moral hazard’ that encourages further unnecessary risk-taking,” she says.

Governments have to be strategic in their use of limited public funds and be sure that investments go only to those initiatives that genuinely serve the public good, she says.

Is there more to this discussion?

Add your views to this ongoing debate by commenting on the posts, or sending your contribution to editor@forestsclimatechange.org.

The Ring: A science policy debate is an ongoing series on ForestsClimateChange.org. The views expressed in this series do not necessarily reflect those of the Center for International Forestry Research.

Scroll To Top