The Road to REDDR H I T U C H A T T E R J E E

Paying countries to reduce emissions from deforestation andforest degradation could help mitigate climate change, but theroad to that solution is rocky.

It wasn’t hard for Debra Moskovits to convince the Peruviangovernment to protect the rain forest in Cordillera Azul. Oneof the last continuous stretches of forest in the Andeanfoothills, Cordillera Azul is home to a rich assortment of plantand animal life. Three weeks into her fieldwork in the region,Moskovits, senior vice president of Environment, Culture,and Conservation at the Field Museum in Chicago, had found“30 species new to science.” On May 22, 2001, only 9 monthsafter Moskovits’s team finished the inventory, the Peruviangovernment declared the forest a national park.

The reality of saving Cordillera Azul from deforestation,however, turned out to be more challenging. “Although theland is set aside for protection already, it means nothingunless you can implement that protection,” says Moskovits.That implementation requires money, and Peru had nomoney to spend on conserving protected landscapes likeCordillera Azul in addition to its other parks. Moskovits andher Peruvian colleagues at a local nongovernmental orga-nization called the Center for Conservation, Investigation,and Management of Natural Areas (CIMA) received initialfunding from several international agencies. But as thosefunds began to run out, they turned their hopes to a newmechanism people were talking about, by which developedcountries would pay developing countries to reduce carbonemissions through “avoided deforestation”. The mechanismis now best known as reduced emissions from deforestationand forest degradation, or REDD.

As forests are wiped outscut down for timber or firewood,burned to clear land for agriculture, or destroyed for mining

or oil and gas extractionsthe carbon stored in the trees isreleased as CO2; this adds to the concentration of greenhousegases in the atmosphere. Twenty percent of global greenhousegas emissions are thought to be from deforestation.

Lawmakers and businesspeople around the world areseriously considering investing in avoided deforestation asa way to mitigate climate change. The idea behind REDD isthat developing countries like Peru would get paid to protecttheir forests and reduce emissions associated with defor-estation. The funds could come as voluntary donations fromfoundations, governments, or financial agencies such as theWorld Bank. Alternatively, industries in developed countriescould get credits for saving trees in developing countriesthrough a carbon marketsa kind of specialized commoditymarket. Carbon markets, already in place for industrialemissions, work like this: industries or other polluters indeveloped countries pay companies or communities indeveloping countries to reduce emissions.

At the 13th UN Climate Change Conference held in Bali inDecember 2007, the 192 countries that ratified the UNFramework Convention on Climate Change agreed that REDDought to be part of the post-Kyoto international treaty formitigating climate change. This was part of the Bali Action Plan,a document that outlines the important issues in internationalclimate negotiations. As nations gear up to mitigate climatechange, several of them, including Peru, Brazil, Mexico, PapuaNew Guinea, and Kenya, are trying hard to figure out how tomake REDD projects effective and incorporate them into futureinternational climate agreements.

Moskovits and her colleagues in Peru received funds fromthe utility company Exelon to figure out how a REDD projectcould be implemented in the region. They started the projecthoping to be in the market by 2010. But the reality ofimplementing a REDD project, as Moskovits has learned overthe past few years, is much more complicated than sheexpected. “It’s all going to take a lot longer than I thought,”she notes.

It’s all about the moneyResearchers like Moskovits, and others in environmentalgroups around the world, have been struggling for decadesto stop deforestation in developing countries. But the driversof deforestation are strongsincreasing demand for food,timber, and energy (biofuel and oil and natural gas)sandcountries have found it economically more beneficial to cutdown forests because markets do not value standing forests.

Stretching eastward from the Andean foothills, CordilleraAzul lies in what Moskovits describes as the “breakfast belt”of Peru. The region is full of coffee and tea plantations andfarms that grow cereals. “This is an area of Peru where therate of deforestation is extraordinarily high,” she says.Proposals for growing such cash crops and for building roadsin the region continue to pour in, threatening the long-termsustainability of the park. Such changes in land use bringmuch-wanted money into a country or region but also havegrave environmental consequences. Besides the countlesstons of CO2 released from deforestation, the intensive

NAN

CYST

ONE

Cordillera Azul is Peru’s second largest national park, but thecountry cannot afford to fund conservation of the park.

Environ. Sci. Technol. 2009, 43, 557–560

10.1021/es803353g 2009 American Chemical Society VOL. 43, NO. 3, 2009 / ENVIRONMENTAL SCIENCE & TECHNOLOGY 9 557

Published on Web 01/29/2009

agriculture has eroded soil, polluted waters, and broughtdroughts to the region. But the cash flow generated by thesecrops makes stopping deforestation a difficult and ongoingchallenge.

Conservation of Cordillera Azul requires continuousstabilization of land use in the area, which means encouragingamong local communities sustainable land-use practices thatalso help improve their quality of life. Moskovits calculatesthat such incentives cost about 50¢ per hectare. That mightnot sound like much, but it adds up to $2 million annuallyfor this one park, and Peru has eight national parks and 41additional protected areas. From a practical standpoint,conservation efforts will need money from the private sector,she says, “because Peru just cannot keep carrying more andmore and more parks.” This is where REDD comes in.Moskovits hopes that REDD will allow the Peruvian govern-ment to invest in standing forests, which will benefit bothlocal and global communities.

Recent spurt of activityThe idea of paying developing countries to prevent defor-estation has been around for a long time, but it was notincluded in the Kyoto Protocol because of concerns over theeffectiveness of such a mechanism. The international treatydid have a Clean Development Mechanism (CDM) forforestry, which allowed companies to get credits for plantingnew forests in open spaces or in deforested areas (affores-tation and reforestation, respectively) but not for avoideddeforestation. However, the forestry CDMs were unpopularbecause the project criteria and calculations of emissionsand credits were too complicated to be implemented.

Now, “REDD is part of the big picture,” notes FedericaBietta, deputy director of the Coalition for Rainforest Nations,a nonprofit group representing tropical countries, such asPapua New Guinea. Kevin Conrad, the executive director ofthe coalition, conceptualized REDD and argued for it ininternational forums, including the climate conference inBali in 2007. To finance such projects, the coalition promotesboth market-based and non-market-based mechanisms,notes Bietta.

Several international agencies and financial organizationsrecently have invested in REDD. In the summer of 2008, theWorld Bank launched a Forest Carbon Partnership Facility.Fourteen countries, including Bolivia, Costa Rica, andVietnam, will receive funding to pursue REDD projects. InOctober 2008, the UN Environment Programme (UNEP),along with the government of Norway, invested $350 milliontoward several REDD pilot projects around the world.

In December 2008, at the 14th UN Climate ChangeConference in Poznan, Poland, policy makers, researchers,and environmentalists discussed the opportunities andchallenges of REDD. Brazil, which committed to cuttingemissions at this meeting, also pledged to halve Amazondeforestation by the year 2018. Some of the funds to conservethe Brazilian Amazon will come from the $1 billion that theNorwegian government pledged to a new Amazon Fund. Butfor most people who think and breathe REDD, the realdeadline is next year’s climate change conference in Copen-hagen (often called COP-15), where leaders are hoping toformalize an agreement on how to move forward with thismechanism.

With numerous pilot projects under way, the participantsare trying to iron out the details and find appropriate waysto implement REDD, should it be incorporated into futureinternational climate mitigation treaties.

Road bumpsFirst and foremost, “we are trying to get a handle on referenceemission levels,” says Tim Kasten, deputy director of UNEP’sDivision of Environmental Policy Implementation. Mostcountries interested in implementing REDD projects aredeforesting at a certain rate, and the emissions associatedwith the existing rate provide the reference emissions level.Once a reference level is established, researchers can use itas a benchmark against which to compare future changes.“Where you set that line, that baselinesthe referencescenariosmakes a big difference about how much you couldget credited for reducing your emissions,” says FlorenceDaviet, a climate expert at the World Resources Institute, anonpartisan think tank in Washington, D.C. “That is [a] prettycomplicated thing to do, because they [the countries] wantit to somehow be based on historical emissions. There’s verylittle good data on historical deforestation rates.”

Setting a reference emissions level is difficult even forcountries, like Brazil, that have collected fairly good annualdata for at least a decade, Daviet notes. “If you look at therates of deforestation in Brazil since 1988, it’s all over theplace. It goes up, it goes down. It goes way up, it goes waydown, it goes a little bit up. And so how do you project thatforward? This is going to be a question...[and] a source ofuncertainty.”

Monitoring forestssin terms of acreage as well asqualitysis also crucial for establishing the baselines andlooking at future changes. Although the quality of forestsremains hard to monitor remotely, advances in technologieshave made monitoring easier, notes Douglas Boucher of theUnion of Concerned Scientists, an advocacy group forenvironmental issues and scientists. For example, a remotesensing technology called LIDAR (light detection and ranging)has improved the monitoring of carbon density, he says.

When a country decides to join REDD, it must be able to“demonstrate that forests have increased or that it hasdecreased deforestation,” says Bietta. And therein lies oneof the toughest challenges of REDD, say most experts. Inorder to get credits for reducing emissions, countries needto reliably and verifiably demonstrate that their projects willreduce emissions beyond what would have occurred withoutthe extra funding. In the language of carbon markets, this isreferred to as “additionality”.

In Cordillera Azul, too, proving additionality has been along and painstaking effort. Consider this complication:companies and other parties who want to do business indeveloping countries like Peru propose one road project afteranother. “There are schemes that come from everywhere,not just from within Peru but from Europe and othercountries, in other continents,” says Moskovits. “Schemes ofsugarcane plantations or palm plantations or tobacco or youname it.”

NAN

CYST

ONE

Businesses continue to submit proposals for building roadsthrough Cordillera Azul national park. “As soon as you get intoany of these valleys, it’s over,” says Moskovits, referring to thedamage roads can do to the integrity of the forest.

558 9 ENVIRONMENTAL SCIENCE & TECHNOLOGY / VOL. 43, NO. 3, 2009

To prove that the forest would be more vulnerable todeforestation without the external funding, “we have to findthe designs for the road; we have to find a budget for theroad,” she says. Such data are crucial to proving that thethreats to conservation of Cordillera Azul are real and not anexaggeration, she adds.

Another concern that some experts raise is the oversim-plification of realities at the local level. The concept of REDDis that if you provide an economic incentive, it will auto-matically induce conservation, says Elizabeth Shapiro, agraduate student at the University of California Berkeley whohas studied the Mexican federal payment for ecosystemservices program as part of her Ph.D. thesis.

When the Mexican National Forestry Commission firstimplemented the payment for ecosystem services project,the agency gave money to the local communities and simplyasked them not to cut down the forests, she says. Ratherthan require active forest management, it simply set asideareas for conservation, which left these forests open to threatsfrom forest fires, pests, and illegal logging. Only afterpersonnel in the regional offices of the forestry commission,along with members of a nationwide rural social movement,persuaded local community members to sign a contractagreeing to fence the forest to keep cattle out and to createfirebreaks, did the conservation efforts prove effective. “Whenyou apply basic [economic] principles to the realitysthe very, very complicated realitysof trying to implement aconservation program in a rural community, just payingpeople, just providing economic incentives, is not enough,”Shapiro notes.

Rights and ownership issuesTropical forests are inhabited by poor peoplessome indig-enous to the area and others migrants. And yet, they rarelyown the land that they live on. Conservation efforts aroundthe world are already plagued with conflicts over land rights,and experts warn that recognizing the rights of forest dwellerswill be key to the success of forest carbon projects.

The core question is, Who owns the forest?, says Shara-chchandra Lele, a forest policy expert at the Centre forInterdisciplinary Studies in Environment and Developmentin Bangalore (India). “If the rights around forests are not welldefined, if you do not clarify those rights, how do you ensurethat the right people get the payment?”

Forest ownership remains central to the concerns raisedby groups representing indigenous people and organizationslike the Rights and Resources Initiative, a Washington, D.C.-based global coalition of associations that promote policyand market reforms to benefit the poor. In October 2008, astudy released at the Rights, Forests, and Climate Changeconference in Oslo used data from 325 sites in 12 countriesto show that community ownership of forests can be thebest possible way to sequester carbon and alleviate povertyin forest areas.

In Cordillera Azul, the problem of accountability is slightlyless complicated because a single agency, CIMA, is respon-sible for managing the park, and all the funds must thereforebe funneled through it, says Moskovits. But ultimately, thequality of life of the poor people living in these areas is atstake because their well-being depends on the health of thenatural resources. “The local people are losing and losingand losing! They’re losing resources, and they’re losing land,”Moskovits states. Unless their rights and livelihood areensured, such projects cannot be effective, she adds.

“Implementing REDD is complex,” admits Bietta. It willinvolve changes to many institutions in the developingcountries. It will require a good understanding of issues, suchas the drivers of deforestation inside the countries, andappropriate revenue distribution. “So it’s quite complex. It’s

not like implementing a legal project.” But that’s no reasonnot to pursue the opportunities, she says. Other experts agree.“We may not have all the i’s dotted and all the t’s crossedby the time Copenhagen comes around,” says Kasten. “Butin my view, the complications can be overcome.”

From REDD to PINC?

As Moskovits irons out the details of her REDD project inCordillera Azul, she admits that protecting forests for theircarbon actually undervalues the services that the forestsprovide. Her concerns are shared by many others, includingAndrew Mitchell, director of the Global Canopy Programme,an international alliance of scientific institutions involved inresearch on forest canopies. “It’s not just about carbon,”says Mitchell. “It’s about water, it’s about cooling theatmosphere, it’s about maintaining biodiversity, and it’sabout maintaining the livelihood of the poor who depend onthese forests.” And these are services that the forests providefor free, notes Mitchell. “We don’t quantify that economicallyin any way.”

Forests can be thought of as savings accounts, saysMitchell. “If you weren’t getting enough interest in yoursavings account, you wouldn’t feel it was working very hardfor you. And it’s the same thing with these big standing forestsin these countries.” In today’s world, a forest cut downsforagricultural production, timber products, oil and gas extrac-tion, or miningshas more cash value than a forest leftstanding. If, however, countries could be paid for all theecosystem services that their forests provide, conservationwould become more profitable than deforestation, he says.

“If we’re going to halt the destruction of tropical forests,we have to look at them in a new way,” says Mitchell. “Thenew way that we’ve come up with is seeing them as globaleco-utilities, if you like. And what these utilities do is provideus with ecosystem services that we are using right aroundthe world but we’re not paying for.” And that led Mitchellto introduce a new concept called proactively investing innatural capital, or PINC. “We started to think of PINC as amechanism for these forests which could be regarded not[just] as a source of emissions, or merely as a store of carbon,but as a public utility,” he says. “Even though they are justsitting there, we should find a way to add value to them,because otherwise countries will have no financial incentivesto maintain them.”

Mitchell and his colleagues hope that PINC will comple-ment REDD. “As REDD payments decline over time andemissions decline...eventually, if it was a perfect situation,

NAN

CYST

ONE

Nearly 200,000 people live in more than 100 different villages inand around Cordillera Azul. Giving land tenure to the local forestdwellers can ensure that they don’t migrate from one area toanother, working dangerous and poorly paid jobs that ultimatelylead to deforestation, says Moskovits.

VOL. 43, NO. 3, 2009 / ENVIRONMENTAL SCIENCE & TECHNOLOGY 9 559

then REDD should decline to nothing, and you will end upwith everything graduating into PINC payments.”

Numerous regional and local projects already pay peopleto conserve individual ecosystem services. For example, CostaRica has established a system to pay landowners to protectforests for carbon sequestration, biodiversity, and watershedservices. But Mitchell envisions something much larger inscale: he wants global efforts that make conservationprofitable for countries. The payment mechanisms will needto be worked out, but he sees many options, like levying atax for conservation or setting up forest bonds.

However, PINC is only a concept so far. Mitchell hascirculated the idea among his peers and is conducting

workshops, including one at the recent UN Climate ChangeConference in Poland. But the idea is already catching on.Moskovits gives it the status of a “movement” and calls it awonderful effort to proactively invest in the environment.

“In a way, I see it [as] a bit like where the carbon marketwas 15 years ago, 16 years ago, when people were saying,‘How do we create a market for carbon dioxide, that onecan’t feel, touch, see?’” Mitchell says. Today, “we havesuccessfully created a market in a public poison. What we’retrying to do with PINC is create a market in a public good.”

ES803353G

Rhitu Chatterjee is an associate editor of ES&T.

560 9 ENVIRONMENTAL SCIENCE & TECHNOLOGY / VOL. 43, NO. 3, 2009