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Incentives to sustain forest ecosystem services. A review and lessons for REDD.

Incentives to sustain forest ecosystem services. A review and lessons for REDD.

A report by Ivan Bond, Maryanne Grieg-Gran, Sheila Wertz-Kanounnikoff, Peter Hazlewood, Sven Wunder och Arild Angelsen commissioned by Norway.

Summary conclusions

1. Can PES be an effective instrument for REDD?

Despite the limitations in the case studies and literature that has been reviewed, this analysis has found that payments for ecosystem services do have a role to play in the reduction of deforestation and forest degradation. There are, however, regional differences in the adoption of PES that need to be recognised. In Latin America, PES is a known tool that is being used. In Southeast Asia, it is a tool that is starting to be developed while in Africa there are very few examples of PES projects and programmes. The key innovation that differentiates PES from other conservation tools is the element of conditionality.

2. Can payments for REDD also improve equity and livelihoods?

Concern has been expressed that PES schemes could have negative impacts on poor people. This review finds no evidence of adverse effects on livelihoods and equity. Where schemes have made concerted efforts to target poor and marginalised groups, there have generally been positive, if somewhat marginal, benefits. However, if and when REDD payments are implemented at much larger spatial scales and/or where governance is weak, facilitators and brokers will have to guard against elite capture and more attention will have to be given to strengthening the land tenure of local communities.

3. What are the costs of reducing forest emissions?

Opportunity costs for landholders are an important component of the total cost of implementing a PES-type REDD scheme. There is much variation in cost estimates, but there is general agreement that paying landholders to conserve forests is likely to be a cost-effective greenhouse gas mitigation option – although overall costs are likely higher than suggested by the Stern Review. For an indication of total costs of REDD as a climate change mitigation option compared to alternatives, the use of global simulation models seems adequate. Local models are useful complements to global estimates, in particular for capturing sub-national or subregional variations in opportunity costs.

4. What is the role of forest governance?

A PES approach to REDD requires effective and equitable governance frameworks and systems, such as clarity of land rights and functioning monitoring to enable the enforcement of conditionality and quid pro quo payments. However, in many areas where deforestation and degradation are at their highest, governance is weak and is an underlying cause of deforestation and forest degradation. Importantly, governance can vary considerably across a single country (e.g., Brazil).

5. How will reductions in forest emissions be measured?

Cost-effective tools and methodologies to measure carbon stocks are essential in establishing permanent and additional reductions in deforestation and forest degradation. There are sound reasons to believe that the remaining technical challenges are likely to be overcome in the near future. While remote sensing plays an important role for deforestation monitoring, ground-based measurements are needed for validation and assessments of degradation.

Establishing baselines or ‘reference levels’ is both a technical and a political issue. The major political challenges refer to the decision on the time period or time point to be used in estimating reference levels and for the establishment of crediting lines. Transparent baseline rules are needed. The more universal the rules the more transaction costs can be reduced. Our review of PES case studies revealed that baseline studies were mostly cursory or even completely absent. While the use of such ‘implicit baselines’ (where a continuation of the ‘business as usual’ scenario is assumed) may work in the context of PES, this is very unlikely to work for REDD.

The full report can be downloaded from the IIED web site. (Click here)

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