'REDD' at the Convergence of the Environment and Development Debates - International Incentives for National Action on Avoided Deforestation

Developing countries would be more likely to participate in any new international climate change agreement if they could earn and trade carbon credits from avoided deforestation, also known as 'REDD'. This paper argues that REDD should be included in any new agreement but, unlike the Clean Development Mechanism, its credits should be accounted for at a national-level, rather than on a project-basis. Experience with the Kyoto Protocol and development assistance over many decades shows that to have effective and sustainable environmental and development benefits, a national-based approach to REDD would be needed to transmit international financial incentives into national development planning. Indonesia is used as an example to show how a national-based approach to REDD could be effectively implemented in the country with the highest deforestation rate in the world. After a brief discussion of REDD and its status in the international climate change regime post-Copenhagen in Part I, Part II examines the different approaches to the scale of REDD being mooted in the negotiations for a new international agreement. Part III shows that many arguments against including REDD could be addressed with a national-approach. For remaining issues, particularly challenges in transferring profits from the sale of REDD-generated credits to local level incentives to protect forests, development lessons internationally and from Indonesia show that such transfers could be structured in an effective way not only to achieve environmental benefits, but also to achieve broader development and poverty reduction aims. These lessons, discussed in Part IV, further bolster the case for any post-2012 agreement to incorporate a national-based approach to REDD, integrated into national development plans.