Legal clarity on REDD benefit sharing mechanisms critical to avoid future disputes, says study

Legal clarity and consensus on which government institutions have the authority to make regulations on how to share benefits from REDD+ among stakeholders are critical to ensure the process’ legitimacy and avoid future disputes, recommended a study conducted by the Center for International Forestry Research (CIFOR).

Many developers of REDD+ pilot projects have designed their own benefit sharing mechanisms independently of state regulations, mainly due to the fact that many projects started before host-country governments put in place any formal regulations on who and how various benefits of REDD+ would be distributed, said Lasse Loft from the Biodiversity and Climate Research Centre in Frankfurt, who co-authored the study.

“These pilot projects are operating under insecure legal and policy frameworks,” said Loft, who reported on CIFOR comparative research on 22 REDD+ projects in seven forest-rich nations. “Once the formal benefit sharing mechanisms are put in place, the ad-hoc arrangements put by REDD+ developers thus far may be subject to upheaval.”

The comparative study, which was presented in a side event at the climate change talks in Bonn recently, is part of a forthcoming book on REDD+ that CIFOR will launch in mid-June on the sidelines of the Rio+20 conference.

Since international agreement that Reducing Emissions from Deforestation and Forest Degradation (REDD+) schemes will be included in a future climate treaty, forest-rich nations have been drafting regulations to protect the carbon stored in their forests. Decisions on the implementation of REDD+, including safeguards, monitoring, verification and reporting (MRV) systems, and benefit sharing, are part of ongoing negotiations.

“The lack of legal clarity of benefit sharing could stall the development of the mechanisms themselves and consequently REDD+ implementation,” said Loft.

In Tanzania, for example there are debates over whether the Department of Environment, or the natural resource or finance ministries have the authority to make decisions in regards to REDD+ implementation that includes the transfer of money, the study said.  In Indonesia, a REDD+ benefit sharing regulation developed by the Ministry of Forestry was challenged by the Ministry of Finance who argued that the first does not have the authority to issue regulations related to fiscal policies and state revenues. A new benefit sharing proposal is currently being drafted in a working group under the REDD+ Task Force, an ad-hoc body reporting directly to President Susilo Bambang Yudhoyono.  

Although REDD+ is essentially a payment-for-performance mechanism, only one of the 22 projects in the study has started handing out cash to local communities for protecting forests. Addressing a number of key issues such as who should receive REDD+ benefits, which not only includes direct monetary compensation, but also access to forest products and improved forest governance, will be vital said Loft. 

A major issue in the benefit sharing debate is whether benefits should go only to forest actors who successfully reduce emissions, or those who have the “right” to benefit from REDD+, for example, by rewarding people with legal rights to the resources, a record of good stewardship or those who have incurred costs as a result of REDD+ regardless of their carbon emission contribution.

Aside from clarifying and achieving consensus on who holds the authority to regulate benefit sharing, the process in designing and implementing the mechanisms could benefit from being transparent, participatory and adhere to free, prior and informed consent principles to ensure legitimacy, the study concluded.