Incentive Based Mechanisms for Reducing Greenhouse Gas Emissions

Reducing Emissions from Deforestation and Forest Degradation (REDD+)

A more recent UNFCCC-sanctioned program, not formally tied to the Kyoto Protocol, is REDD+ which provides funding to developing countries for the protection and better management of tropical forests. REDD+ programs seek to reduce the loss of carbon (and release as GHGs) stored in healthy tropical forests due to deforestation. The program is in its pilot phase (REDD readiness programs) with all signs pointing away from carbon credits being produced through avoided deforestation and more toward a program by which governments and companies in the industrial world underwrite incentive payments to those developing countries who document avoided deforestation through the program (e.g. through a Green Climate Fund).

The way the program is presently envisioned is that the potential release of carbon into the atmosphere due to deforestation is estimated from measurements of the amount of carbon stored in forests and current deforestation trends within the project area. This information coupled with monitoring of project areas forest (on-the-ground fieldwork plus remote sensing) will, in theory, allow the estimation of the avoided loss of forests due to REDD+ program management.



CDM and REDD+ programs are new, evolving, and controversial. Below is a list of advantages and limitations of these approaches


  1. Facilitates the reductions of GHG emissions at lowest economic cost
  2. Can be seen a North-South compromise — provides funding to developing countries where most cost-effective reductions can occur
  3. REDD+ addresses the perverse incentives tied in part to CDM of allowing deforestation to occur in order to claim credits for reforestation


  1. Are these programs producing changes or are these subsidies for activities already occurring?
  2. Difficulty of certification and compliance monitoring (what is happening on the ground and for how long?)
  3. Resources (garbage, natural forests) are suddenly of higher value for governments which may result in the poor being excluded from these resources. An example is described in the article “The Waste-Pickers of Delhi”¬†about a CDM project in India. Similarily, REDD+ projects may lead to a recentralization of forest governance to the detriment of the rural poor.

These programs may cause improvements in the project area but on a broader area have little impact since GHG emitting activities are simply displaced from project area. This is referred to as leakage in the context of REDD+.



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