REDD+, So Long as “the Poor Sell Cheap”

Jacob Phelps, National University of Singapore, discusses his recent research on the costs of REDD+ in the context of increasing opportunity costs among small-scale and subsistence farmers.

There are a number of reasons why REDD+ forest carbon has received such widespread attention. Perhaps the least romantic reason…

Low-cost REDD+REDD+ is cheap (at least on the surface).

There are strong economic arguments for implementing REDD+. Forest conservation and sustainable management are potentially large-scale, arguably low-cost strategies for reducing greenhouse gases to mitigate climate change. Low agricultural yields, geographic isolation and widespread poverty in many tropical developing countries often mean that small incentives can motivate governments and individual landholders to protect land for conservation.

Financing a large-scale REDD+ mechanism may depend on these comparatively low costs, driven by efforts to find lowest-cost emissions reductions. This potentially places subsistence farmers, smallholders, and community forestry groups at the center of REDD+ initiatives, particularly where they are willing to “sell cheap.”

Swidden agriculture, northern Vietnam (Courtesy A. Ziegler, 1998)

Swidden agriculture, northern Vietnam (Courtesy A. Ziegler, 1998)

But the poor won’t sell cheap forever.

In a recent study, my co-authors and I considered the costs of REDD+ in the context of increasing opportunity costs among small-scale and subsistence farmers.  We used the Democratic Republic of Congo (DRC) as an example for considering how costs among smallholder farmers can change over time.  The trends we uncovered are particularly relevant in the context of the current Asian agricultural boom.

Cassava farming, DRC (Courtesy Ollivier Girard, CIFOR, 2012)

Cassava farming, DRC (Courtesy Ollivier Girard, CIFOR, 2012)

Our analysis confirmed that many small holders in the DRC would potentially be willing to participate in conservation given very small incentives.  Indeed, many subsistence farmers in the DRC suffer from low farm yields, low incomes, and high food insecurity, similar to smallholder and subsistence farmers across much of the developing tropics.

At the same time, however, many smallholder farming communities in the DRC are being targeted for agricultural support.  As in many other developing countries, farm yields could radically improve with the introduction of new disease-resistant plant varieties, increased fertilizer use, and improved transportation and market access.  This support could bring dramatic, necessary benefits to local farmers.

“Hidden” costs of REDD+

However, increasing farm yields would also increase the costs of conservation.

Farmers who were once willing to protect forests for a pittance could begin to demand more for their conservation actions. Small-scale farmers might also be displaced by immigrants and larger commercial agriculture as farming becomes more lucrative in areas that were previously less productive and/or isolated from markets.

Based on our scenarios of agricultural improvements among small farmers in DRC, we modeled that conservation costs could increase 8-20 fold within 30 years. While these were hypothetical scenarios, they illustrated how, as farmers’ costs increase, so too must REDD+ payments.

While our focus was on the Congo Basin, the findings are easily reflected and magnified in the Asian context. Rapid agricultural expansion and the recent boom in high-value coffee, oil palm, and rubber production mean that farmers’ opportunity costs in Asia are already increasing.

Further intensification of these high-value crops could reflect even greater increases in the costs of conservation.

Conservation spending may have to dramatically increase to compete with future agriculture.

Many conservation groups are actively linking agricultural improvement programs to conservation policies.  These are attractive because they promise win-win solutions for conservation and rural development, at least in the short-term. We suggest that these efforts may be overlooking the impacts of these policies on long-term conservation.

Will REDD+ still be attractive if costs increase in the future? Or will tropical developing countries and small-scale farmers only prove viable REDD+ and conservation partners while they sell cheap?

Linking conservation to agricultural intensification

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The $30 billion Question at Doha

Jim Stephenson, Program Officer, provides an update on early side events at COP 18, Doha.

Welcoming session at COP 18 in Doha. Photo from UN climate change’s Flickr photostream.

As we look to the future of REDD+ finance in the COP negotiations, it is worth reflecting on what has been achieved so far – a subject which provided a fascinating contrast in messaging at yesterday’s side events.

At the Fast-Start Finance Information Event we heard from the Parties that, to some peoples’ surprise, the US$ 30 billion target for ‘Fast-Start Finance’ from 2010-2012 had been surpassed. While this is open to further research and clarification, huge numbers were reported even by individual countries, ranging up to US$ 17 billion, with a healthy chunk of this funding reportedly going towards REDD+. From the snapshot of Parties reporting, it was difficult to calculate whether the approximate REDD+ partnership target of US$ 4.5 billion in REDD+ Fast Start Finance had been reached, but it did not seem far off and was comfortably at 10 digits.

So three years and billions of dollars later, are we any nearer to tackling some of the “Persistent Issues” which face REDD+? The Ecosystem Climate Alliance’s side event of the same name suggested not, and questioned why, despite the large amounts of bilateral, multilateral, and private funding directed at REDD+, we have not seen much in the way of expected results (though there are clearly some important exceptions).

One of the Alliance members, The Rainforest Foundation Norway, claimed that far too much REDD+ readiness funding and time had been directed towards MRV (Measurement, Reporting, and Verification – in their estimation 40% of REDD+ funding to date) when more fundamental issues such as land tenure and governance do not receive these levels of attention. A question I myself asked last year.

At the same event, Dr. Tim Cadman made good on his promise not to send the audience to sleep by giving a fresh perspective on how REDD+ efforts do not yet recognize and support what he terms ‘stakeholder driven governance’. Using Arnstein’s Ladder of citizen participation he showed how current REDD+ standards and safeguard systems only amount to what Arnstein describes as ‘Tokenism’ (i.e. informing, consultation, and placation). Dr. Cadman points out that we need to be aiming higher if REDD+ is to support good governance principles, moving from consultation and placation to partnership, delegated power, and even citizen control over REDD+. I would suggest that some of the leading standards and principles do aim at partnership with local stakeholders, but it is certainly agreed that we should be aiming higher.

RECOFTC has long believed that community forestry is an excellent way to aim higher and achieve partnership, delegated power, and citizen control over REDD+, allowing it to be locally driven rather than imposed by external actors.  During the Q&A session indigenous representatives repeatedly pointed to the fact that in their home countries REDD+ is being ‘pushed aggressively’ onto them by developers and governments. This is a fertile breeding ground for misunderstanding, manipulation, and eventually the failure of REDD+, ignoring the fact that ultimately local people hold the key to its success.

We hope that as Parties in Doha look beyond Fast Start Finance and begin to program the intended increase of climate funding to $100 billion per year by 2020, much more attention is paid towards supporting good governance and the meaningful participation of local people.

Bangkok UNFCCC Sessions Kick-off with REDD+ Finance Debate

Jim Stephenson comments on the first day REDD+ discussions at the Bangkok Climate Change Conference.

The additional sessions of the Ad-Hoc Working Groups began yesterday in Bangkok, with REDD+ finance taking up two conference halls’-worth of attention through the snappily titled ‘Workshop on financing options for the full implementation of results-based actions relating to REDD-plus, including modalities and procedures for financing these result-based actions’.

An area where progress is urgently needed in the run-up to COP 18 in Doha is how ‘results-based’ REDD+ will be financed. The good news is that there has clearly been much work put into debating and analyzing the options, backed up with formal party and observer submissions in March, work-shopping and a UNFCCC technical paper published in July.

During the final session, the Chair was moved to remark that each Party was beginning their statement with ‘as has already been said’ or ‘we are in full agreement with’. Typical workshop idiom – but in UNFCCC discussions, Parties have a duty to defend their interests. Perhaps the consensus on these issues, at least at this stage, is building.

The areas of consensus are fairly non-contentious issues – such as the need for diverse sources of both market and non-market based finance for REDD+, including the need to determine the role of the Green Climate Fund in REDD+ financing in time for Doha. Though not contentious, this is very important. The $4.5 billion in public funding promised as part of the 2010-12 ‘fast start finance’ for REDD+ readiness has under-delivered, and achieving progress towards results based finance clearly requires a diversified financing base to reach the scale needed. Coordinating the diversification process would be the real challenge – Parties point out that managing and reporting so many different finance flows could add another burden onto the governments receiving these funds.  To address this potential issue, the need for a well organized and transparent UNFCCC REDD+ mechanism was highlighted, in order to unify these funding streams and simplify the finance disbursal process.

Another area highlighted by the Parties was the need to recognize the diversity of what REDD+ ‘results’ are, which has large implications for the scaling up of REDD+ finance in lieu of a compliance carbon market.  Some feel that the ‘co-benefits’ of REDD+ should attract their own funding regardless of the carbon market, such as watershed services, biodiversity conservation, poverty alleviation and sustainable commodities. The norm is now to put the ‘co’ in co-benefits in quotes, recognizing that these benefits should gain equal footing to the carbon emission reductions in REDD+. If this happens these benefits could be mainstreamed in the ‘payment for results’ framework, hence expanding the potential funding pools for REDD+.

Better still would be the recognition of improved governance in the forest sector, including advances made in community forestry law and implementation, as ‘results’ to be rewarded.  This would also reinforce the incentives for Parties to properly implement or even exceed social and environmental safeguard standards, something very much welcomed by RECOFTC.

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