Policies to Reduce Emissions from Deforestation and Degradation (REDD in Tropical Forests:An examination of the issues facingthe incorporation of REDD into market-based climate policies

Deforestation and forest degradation account for 20 percent of annual total greenhouse gas (GHG) emissions. The vast majority of these forestry emissions come from deforestation in developing countries. Currently, there is significant dialogue at the international level about how to integrate reducing emissions from deforestation and degradation (REDD) into the existing climate change regime through market-based incentives. This paper examines the issues that arise when trying to create an economically and environmentally robust market-based REDD policy. The paper begins with an overview of the role of forests in climate change, and is followed by an examination of design elements that will affect the integrity of a REDD policy, including issues of scope, monitoring, baselines, leakage, stakeholder interests, permanence and liability, and the potential impact of REDD credits on the carbon market. The paper closes with an overview of the issues facing developing countries that would host REDD activities.

When climate negotiators meet in Copenhagen in late 2009 to craft a new agreement on global greenhouse gas emissions, they will be tasked with creating incentives to curb carbon dioxide released through deforestation in the developing world, where vast tropical forests are being cleared for agriculture and timber.

The need to reduce deforestation-related emissions is fast becoming one of the major drivers of global climate policy. A new RFF Report by Erin C. Myers Madeira entitled Policies to Reduce Emissions from Deforestation and Degradation (REDD) in Developing Countries notes that 60 percent of all carbon consumed naturally by forests is emitted back into the atmosphere because of deforestation practices.

To counter the loss of millions of acres of trees, Myers Madeira analyzes the inclusion of “REDD credits” in international climate treaties – credits that could be sold on global carbon markets. REDD Credits could ensure preservation of forests by providing landowners with an economic incentive to leave the trees standing. “Any REDD policy must ensure that emissions reductions are real, measurable, and verifiable,” the report says, “and any market-based mechanisms must ensure the integrity of both the emissions reduction and the carbon market.”

The report concedes that implementing such credits will be a major challenge, but also notes that “the potential rewards from getting it right stretch beyond the emissions reductions themselves and include the sustainable development of forest-dependent communities and the conservation of some of the world’s richest forest ecosystems.”