1. New Studies Challenge Basic
Assumptions of REDD: Time for
-s
Mid-Course Corrections
Independent Civil Society Advisory Group
UN-REDD Programme
Sixth policy Board Meeting
Da Lat, Vietnam
22 March 2011

2. Structure of Presentation
New Analyses of Assumptions that Frame REDD
1. Who Drives Deforestation?
- Fundamental to stopping deforestation*
2. What Countries Are Achieving Protection and
Restoration at a National Scale?
- Reversing deforestation and achieving national scale
restoration
3. Will there be a market for Forest Carbon?
- Promised investment from private sector depends on it
* Also opportunity cost and its application

3. Findings from Four Studies
1. Who Drives Tropical Deforestation? Jane Bryant, Phil
Shearman et al. Forthcoming, RRI.
2. Does the Opportunity Cost Reflect the Real Cost of
REDD+? Rights and the Realities of Paying for REDD+.
Hans Gregersen, Hosny El-Lakany, Alain
Karsenty, Andy White, 2010, RRI.
3. The Greener Side of REDD: Lessons for REDD+ from
countries where forest area is increasing. Hans
Gregersen, Hosny El-Lakany, Luke Bailey.
Forthcoming, RRI.
4. REDD and Forest Carbon: Market Based Critique and
Recommendations. The Munden Project 2011

4. Direct and Indirect Causes of Deforestation
AGENTS OF DEFORESTATION
• Logging/loggers
• legal and illegal logging
• Commercial agriculture/agriculturalists, ranchers
• local, national and global market focused
GOVERNMENTS ARE • Infrastructure developers
THE BIGGEST • Mining companies
•“Poverty agriculture”/migrant and other poor
DEFORESTERS farmers
• Etc.
• Industrial Logging
Responding to:
• Industrial Agriculture
INCENTIVES WITHIN A GIVEN POLICY ENVIRONMENT SET BY
GOVERNMENTS
• Poor enforcement * Incentives or motivation to deforest come from:
of policies • Market forces/profit potentials
• Illegal logging • Govt. (national/local) development goals
• lack of, or poor enforcement of policies/laws
Results in:
DEFORESTATION AND FOREST
DEGRADATION

5. What REDD Projects are Identifying As
Drivers of Deforestation
- Actual REDD country proposals focus on identifying
direct agents in deforestation process
- Easier to identify – mostly identified by government officials
- Little attention to deal with underlying policy failures
and associated incentives that actually drive the
actions of agents of deforestation
- Governments not prone to assessing themselves, may even
directly benefit

6. Implications for REDD
- Merely eliminating the current direct causes of
deforestation will not achieve permanence. There are
reasons why they deforest.
- We could get rid of all the current direct agents – that would
change nothing in the long run.
- If the enabling policy environment and its associated
incentives to deforest remain new agents will enter the
arena and continue deforestation.
- Need to shift attention to enabling policy environment
and the associated incentives for permanent impact.

7. What About Opportunity Cost?
Opportunity cost provides a theoretically satisfactory
indicator of what will be needed in a well-
functioning, competitive market economy to entice entities
that intend to deforest to reverse their decisions.
Some questions about its applicability to REDD:
– What is a legal use and what is illegal (in absence of clarity of
tenure – a difficult question to answer)
– Currently (since governments claim ownership of most of
forests), both – a shifting cultivator and an illegal logger are at
par – estimate of benefits foregone will not be accurate and
justifiable
– governments themselves are biggest deforesters – who do
you pay – governments to change policy or concessionaires who
are beneficiary of the policy

8. While REDD is being Developed
1. In 2007 emissions from deforestation and degradation
were estimated as some 20% of global carbon
emissions; (subsequently revised to 12-18%)
2. A recent report by Winrock International estimated
contribution of forests to overall emissions is now as
low as 8%;
3. Clearly the global deforestation is declining, industrial
emissions are going up, while the world is still
struggling to develop REDD.

9. Which Countries are Protecting &
Reforesting?
1. Recently released UN figures show that from 1990 to
2010, 76 countries with more than 200,000 hectares of
forests were either maintaining or increasing their net
forest area;
2. 58 of these countries are adding forests;
3. 62% of the 76 countries, by IMF classification, are
emerging or developing countries while 8% are classed
as Highly Indebted Poor Countries;
4. Countries - rich and poor –are protecting and restoring
forests long before REDD.

10. What Lessons Reforesting Countries Provide
1. The attention and sustained support of government is
needed at the highest levels - Building up the forest sector is not
a one-time event that occurs in a short period of time;
2. Improvement in forest governance is usually needed
before the pieces can be put in place for the forest
transition - most afforesting countries went through positive
adjustments in their governance structures and processes during the period
of the forest transition
3. Forest-tenure reform and efforts to secure the rights
of forest dwellers are needed in most countries - crucial
in keeping countries on the net-forest-adding path over the long term
4. Investment in Reforestation, Restoration, and
Employment in Forest Areas - a market-based approach based
on outputs rather than carbon offset credits

11. Will Private Sector Investment in
REDD Materialize?
A new study by the Munden Project shows that a global
forest carbon market can’t work for the following
reasons:
1.Poorly defined asset – forest carbon is ill defined to the point of
being unacceptably risky - scientifically unreliable;
2.Unclear ownership of assets – do the people selling forest
carbon have a right to do that;
3.Intermediaries will obtain monopsony power -
bulk of benefits from forest carbon will not go to REDD projects, the communities
that live within them or the countries where they are located,
4.Unsolvable clearing problems - will result in the creation of
a substandard, risky and ultimately destructive forest carbon

12. Key Conclusions
1. REDD is dealing with agents of deforestation rather than
altering the incentive structure and policy environment
that attracts these agents;
2. Monetary compensation based on opportunity costs will
not work in many real cases and may end up as a
perverse incentive;
3. Many countries – rich and poor – are reversing
deforestation trends without REDD;
4. Promises of huge private investment in forest carbon
market are unlikely to materialize in the present
situation.

13. Time for Mid-course Corrections
1. Focus on incentives within a given policy environment
set by governments rather than proximate causes of
deforestation;
2. Build on what has worked – government commitment,
improvement in forest governance; forest tenure
reform, and investment in other market-based
approaches based on outputs;
3. (1) and (2) will lay the foundation for future
investment in forests , from local owners, private
investors in forest products and services (including
carbon);