Financing REDD: meshing markets with government funds

Deforestation is a major driver of climate change, releasing billions of tonnes of carbon dioxide (CO2) and other greenhouse gases into the atmosphere. The Intergovernmental Panel on Climate Change (IPCC) – the 2000-plus scientists who analyse the evidence on climate change – estimates that the forestry sector is responsible for 17.4 per cent of global greenhouse gas emissions, putting it above global emissions from the transport sector of just over 13 per cent.

1 So it is clear that to reduce emissions of CO2 and other greenhouse gases to safe levels (see ‘Two degrees’), action to halt deforestation will be necessary.

2 The first commitment period of the Kyoto Protocol (2008-2012) did not include any targets or credits for emission reductions from deforestation. Ongoing negotiations for the second commitment period, Deforestation accounts for roughly 17 per cent of global greenhouse gas emissions. So it is no surprise that in the runup to the December 2009 climate talks in Copenhagen, REDD – reduced emissions from deforestation and degradation – is emerging as a strategy with big potential for mitigating climate impacts. With REDD, local communities can be rewarded for conserving their forests, so the approach works for poverty alleviation as well as emissions reduction. Evidence is showing that REDD is simple and workable. Funding is an altogether more complex issue, however. Looking at the roles of market and government, is a combined approach to financing REDD feasible?

Financing REDD