REDD+: An incentive structure for long-term performance

Reducing emissions from deforestation and forest degradation (REDD+) was agreed at the UNFCCC as part of the 2010 Cancun Agreements, with an objective to ‘slow, halt and reverse forest cover and carbon loss’. Many aspects, in particular what determines results for REDD+ and how they will be financed, are still being negotiated. The long-term incentive structure for REDD+ will guide actions not only in the ‘full performance phase’, but also in ongoing ‘readiness’ processes.

There is broad agreement that to ensure sustainable reductions in forest loss and address the drivers of deforestation, there must be structural reforms taking account of key governance, social and environmental aspects. An incentive structure based on a narrow definition of results in terms of carbon is unlikely to prove adequate for these reforms, and could lead to a disproportionate amount of resources in the readiness phase being directed towards costly systems for the measurement, reporting and verification (MRV) of carbon.One of the problems with using carbon as the sole determinant of performance is that it is difficult to prove causality, leading to risks of windfall effects, or of not rewarding genuine efforts. An improved incentive structure, which defines performance criteria more broadly, monitors progress towards a broad range of outcomes, and makes use of existing commitments and monitoring approaches, may help bring about the transformational change needed to reverse forest loss.

In this discussion paper we outline a pragmatic approach to reliable monitoring of performance which could help to deliver effective forest protection with the limited resources available. Drawing on published research, we explain what broader performance means and how it could be monitored cost-effectively, providing a basis for further discussion.

Download the report: REDD+: An incentive structure for long-term performance