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

Tropical deforestation and forest degradation contributes to global greenhouse gas emissions. Reducing emissions from deforestation and forest degradation (REDD) is an important component of a viable global climate policy framework. This report focuses on national and sub-national aspects of REDD activities and the role of performance-based payments for avoided deforestation and forest degradation in developing countries. The study reviews lessons for REDD from experiences gained with payment for ecosystem services (PES) in developing countries. It is based on available literature and 13 case studies including two wildlife-based programmes and a forestry-based programme.

The following are the report's conclusions and recommendations:

• this analysis finds that payments for ecosystem services do have a role to play, with regional differences, in the reduction of deforestation and forest degradation

Recommendation: PES is an important element of REDD mechanisms and it calls for development of an operational framework of minimum conditions to determine the effectiveness of payments and the likely required investments.

• there is no evidence of adverse effects on livelihoods and equity of poor people. In making REDD payments where governance is weak, facilitators have to guard against elite capture and efforts should be made to strengthen the land tenure of local communities

Recommendation: the direct and indirect socio-economic impacts on poor households of REDD activities should be monitored and REDD strategies should be tailored to country-specific conditions and needs.

• paying landholders to conserve forests is likely to be a cost-effective greenhouse gas mitigation option

Recommendation: more cost-effective PES-type REDD schemes should be designed after surveying the transaction costs and options to keep costs down.

• effective and equitable governance frameworks pertaining to land rights and quid pro quo payments should be in place. 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

Recommendation: a comprehensive framework for assessing the minimum governance standards of forests in relation to REDD should be put in place.

• cost-effective, acceptable and appropriate tools and methodologies to measure carbon stocks are essential in establishing permanent and additional reductions in deforestation and forest degradation

Recommendation: Regional partnerships should be developed for sharing, acquiring and developing appropriate methods and experiences for monitoring, verifying and reporting changes in forest carbon stocks, supervised by an unbiased international forest carbon monitoring institution.