“Cash is king”: Forested countries must see REDD+ financial rewards

Developing countries will not be incentivised to change business -as- usual practices and invest in REDD+ schemes until there’s certainty that the financial rewards that have been used to promote the forest carbon mechanism will materialise in the future, said experts at the sidelines of the climate change talks in Bonn.

“Cash is king,” said Maria Brockhaus, a scientist at the Center for International Forestry Research (CIFOR), at a side event held alongside the meetings of the UNFCCC’s Subsidiary Bodies. “The prospect of REDD+ financing is already a game changer, but if we want the change to be transformational and not just on the surface, there needs to be certainty on what forested nations will receive under REDD+.”

Talks on Reducing Emissions from Deforestation and forest Degradation (REDD+) has prompted countries to draft supporting regulations, embark on pilot projects, and bring about new actors into the arena, according to a comparative study conducted by CIFOR. The study is part of a forthcoming book on REDD+ that CIFOR will launch in mid-June.

REDD+, a global scheme that aims to cut emissions by compensating developing countries to keep their forests, is not part of any legally-binding climate treaty and thus far has been supported by bilateral and multilateral funds, with an estimated $7.2 billion committed since 2008. Experts have said that REDD+ financing has to be scaled up significantly to ensure that forest-rich nations feel that their investment in the scheme will pay off, and that compensation payments will be available long after the initial preparatory phase is over.

“What we need is the long term certainty that REDD+ will be funded; that is more important than the question of immediate funding needs” said Louis Verchot, CIFOR’s leading climate change scientist, in response to a participant at the event who raised concerns that developing countries were already struggling to spend the funds given to build capacity and the institutions needed to apply REDD+.

The anxieties of both developed and developing countries, with the first having problems to raise climate funds amid a financial crisis and the latter facing increasing vulnerability from the impacts of global warming, can very quickly turn into a downward spiral of mistrust, Monica Araya, climate finance advisor to the Costa Rica government, said in a separate session. “One side will be saying ‘I am delivering the money’ and the other half will be saying ‘well, the money is not being delivered.’”

There needs to be more “factual conversations” on the flow of climate funding, namely how much, where to, and why they were given for the specific projects and countries, said Araya. Developing countries also need to be transparent in how the money is being spent and whether it’s making a difference in terms of reducing emissions, she said.

The CIFOR study, part of a four-year Global Comparative Study on REDD+, notes that the availability of information and new ideas can also initiate change. Combined with economic incentives, they can lead to shifts in power relations among existing key players, for example the ministries involved in forestry planning and businesses operating in and around forests, and bring into the arena new actors, who can also use the tools that they have to alter specific interests.

REDD+ has already brought about change in forested nations, with Indonesia imposing a two-year moratorium on new concession licenses on primary and peatland forests, and Brazil slowing deforestation rates by more than 70 percent. Norway, who has pledged up to US$2.8 billion of REDD+ funding, according to a November 2011 report from the Overseas Development Institute (ODI) and Heinrich Boll Stiftung, has called the scheme “the biggest story so far in climate change negotiations”.

Still, transformational change beyond the forestry sector is required to realise the full mitigation potential of REDD+, said Brockhaus. “REDD+ requires change before it can induce more change, including in other sectors. This ‘chicken and egg’ problem will be the ultimate barrier if the changing ideas and incentives are not convincing and reliable.”