Assessing Options for Effective Mechanisms to Share Benefits

Resource

Summary

Since the UNFCCC conference of the parties in Bali (COP13), discussions around the role of tropical forests in reducing emissions from deforestation and forest degradation (REDD+) have revolved around the need for financial incentives and compensation to involve countries in critical climate change mitigation measures. Most recently, during the COP 16 discussions in Cancun, parties committed to a Green Climate Fund, which is meant to be capitalized at US $100 billion by 2020, and used to help developing countries finance emission reduction and adaptation. There were also commitments to provide new and additional resources of approximately US $30 billion for 2010–12 for investments through international institutions (including in the area of forestry). While these numbers look significant and generate considerable optimism, different experts have estimated that approximately US $20 billion per year will be necessary to prevent 90 percent of deforestation and, therefore, reduce emissions.Numerous challenges are associated with using these resources effectively. One of these is identifying the mechanism for the markets and development partners to make available financial resources for developing countries implementing REDD+. The second, and more critical, challenge is ensuring the financial resources are solely used to effectively deliver the specified goals of REDD+. The latter depends on ensuring financial resources associated with such initiatives translate into incentives for those who use and manage forest resources.Recent work in this area has confirmed that achieving REDD+ objectives will require effective distribution of benefits from the national or subnational level to the local level. Experts have identified various models that offer insights into effectively transferring benefits (see, for example, Costenbader, 2011). These various models provide interesting findings for development partners and national REDD working groups regarding the challenges and lessons for designing benefit sharing schemes.