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Something to be written in the state of Denmark – but what will it offer the forest-dependent poor?

Written by Leo Peskett

By David Brown and Leo Peskett

As an ODI event examines 'Forests in a future climate regime', this blog argues that efforts towards ‘reduced emissions from deforestation and forest degradation’ (REDD) should be implemented in a way that, at the very minimum, is ‘no-cost’ for the poor.

The prospect of ‘reduced emissions from deforestation and forest degradation’ (REDD) becoming part of the post-Kyoto ‘Copenhagen agreement’ in December offers real potential for the poor. The financial flows could be substantial and, because they are targeted on the forest custodians, the poor could benefit. The performance element could consolidate this link, if well handled within an effective market instrument. The Eliasch Report, for example, estimates that carbon markets could deliver $7 billion in REDD benefits per year in 2020.

However, the risks are also significant. Experience warns of the dangers of well-intentioned but inappropriate policies that end up oppressing the poor rather than improving their wellbeing. This is likely to come about in a number of ways:

  1. Failure of REDD implementation to address the underlying causes of deforestation, with efforts being displaced onto the peasant economy;
  2. A shift in the balance of interventions away from extension and support activities towards disciplining the poor as a low-cost control strategy;
  3. Decreased access by the poor to forest lands;
  4. Non-respect of local claims to land, trees and other property, and the improbability of such respect in the future, in the face of the major financial gains becoming available to governments from retaining central control;
  5. Non-recognition by governments and their donors of the complexities of rural social structures.

Other potential outcomes of REDD initiatives are more uncertain in their impacts, such as the effects on employment, wages and prices and changes in the values of assets.

The economic logic of REDD is well laid out in the Eliasch Report. The global economic cost of climate change caused by deforestation could reach $1 trillion a year by 2100, while the net benefits of halving deforestation could amount to $3.7 trillion. The finance required to halve forest emissions up to 2030 could be c. $17-33 billion per year, if included in a global trading mechanism.  But some recent analyses point to the risks for the poor. For example, a study by McKinsey on pathways to a low-carbon economy identifies ‘reduced slash and burn agriculture conversion’ as the lowest cost abatement measure in the tropical forest sector. All very well, but what other land use systems are on offer for shifting cultivators? Decades of research and investment in ‘alternative livelihood opportunities’ have delivered very little; attempts to modify those systems would have to be handled very carefully indeed.    

It is the very fact that REDD is a low cost way of reducing global emissions that gives such cause for concern. The forces that make it attractive to investors relate to the low opportunity costs of the peasant economy on lands which have, since colonial times, been taken over by the state. These facts have been responsible in large measure for the unrealistic conservation policies, and REDD investments are likely to be focused on the same areas for the very same reasons: lack of adequate valuation and weakness of counter-claims against the interests of the state.

What is needed to ensure that REDD does benefit the poor?   

What are the chances that Copenhagen will deliver a REDD package that is not only progressive in terms of climate change mitigation but also able to deliver co-benefits? This is largely unproblematic in those forest-rich states that are functioning and healthy democracies, but several of the countries that are prime targets for REDD payments are beset by poor governance. It may be unrealistic to imagine that significant international payments will be made with no guarantees of the welfare of those they are intended to help.

The tools available to the international community are few in number. International equity standards could be applied, but in an era of country-led development, aid donors are loath to apply conditionalities that have, in any case, a poor record as a development assistance tool. The performance element in a market mechanism would provide an incentive in the longer term, but this depends on attracting clients. Experience of the Clean Development Mechanism (CDM) shows that mitigation measures tend to reward capacity rather than need, and forest-rich states are often lacking in capacity.

As regards options within the international process, social principles might be included in the legal text of a REDD agreement (for example, general guidance for Parties and guiding principles for projects). There may also be possibilities for more indirect influence, for example as regards programme design and monitoring. Outside of the international process are international human rights instruments, voluntary standards, civil society advisory inputs, as well as national level options such as rights and governance reform.

In reality, the challenges are likely to be as much intellectual as legal if sceptical sovereign states are to be convinced of the benefit of a socially inclusive approach. The perspective that Frances Seymour adopts in her paper ‘Forests and Climate Change’ (2008 - see pages 28-32) is encouraging. Seymour emphasises the importance of healthy forest cover to the adaptation strategies of many forest-rich nations, and calls for greater attention to be given to keeping forests healthy to resist the negative effects of climate change. She advocates focussing international attention primarily on the industrial drivers of deforestation and sees major opportunities in payments for environmental services that compensate communities for their forest stewardship. Neither of these is unproblematic in a developing country context, though both are highly desirable.

The starting point should be a commitment to REDD implementation in a way that, at the very minimum, is ‘no-cost’ for the poor. Many of those who are most forest-dependent have no wish to remain at the margins of the economy and would be only too happy to improve their livelihoods. REDD provides an important opportunity for this to be achieved.  But it is clear that whatever is written in Denmark in December 2009 will require enormous and concerted international effort and commitment if the future of REDD is to be laid out only in such positive terms.