Alternatives to carbon markets to finance REDD

At the beginning of the UN climate negotiations in Durban (COP17), FERN published a short report looking at carbon markets as a means of financing REDD. The briefing, which was signed on to by 28 organisations explains why carbon markets will not deliver for southern governments, forests and people.

It starts with the question, “How much money is needed?” and explains that although this has been a primary focus of discussions on REDD, it is the wrong question. More important than the amount of money needed, is “a clear action plan to address the underlying drivers of forest loss coupled with sufficient political will to implement the plan”.

In the period 2010-2012, more than US$8 billion has been promised or is expected from government funds for REDD, compared to US$600 million from voluntary markets and nothing whatsoever from compliance markets. This is unlikely to change much before 2020, the briefing argues, because the largest carbon market, the EU Emissions Trading Scheme does not currently accept forest offset and will not do so until at least 2020.

Even with a forest carbon market, little money would actually reach the forests. Most of the money would end up in the hands of intermediaries: speculators, banks, consulting firms, certifying firms and so on. It is also unlikely that a carbon market would finance forest conservation in countries where the risks of corruption are high. More than 75% of CDM projects are in three countries: China, India and Brazil. A similar pattern is likely with REDD finance via carbon markets.

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