Post on 20-Jan-2023
“REDD Blues”:
Trading in Forestry Carbon Credits without Trading off Sustainability
Prakash Kashwani,ii,*
Robert Holahani
Citation: Kashwan, Prakash and Robert Holahan. 2011. ‗REDD Blues‘: Trading in Carbon Credits without Trading off Sustainability. Working Paper-W11-16. Bloomington, Workshop in
Political Theory and Policy Analysis
i Workshop in Political Theory and Policy Analysis, Indiana University, 513 N Park Ave,
Bloomington, IN 47408
ii School of Public and Environmental Affairs, Indiana University, 1315 East Tenth Street,
Bloomington, IN 47405-1701
*Corresponding author: Prakash Kashwan; e-mail: prakash.kashwan@uconn.edu
Acknowledgments
We would like to thank Shanna Dietz, Kerry Krutilla, Elinor Ostrom, Jacob Phelps, Achim
Schlüter, Edward Webb, and the participants at the Indiana University Political Science Graduate
Student Annual Conference 2007 and the Workshop Mini-Conference 2007, both held at
Bloomington, Indiana, and the fifth biennial conference of the Indian Society for Ecological
Economics at Ahmedabad, India in January 2009, for their comments on earlier drafts, and
Joanna Broderick for her editorial comments. Usual disclaimers apply.
Role of the funding source
Funding source(s) had no involvement in the conduct of the research, in study design, in the
collection, analysis and interpretation of data, or in the decision to submit the paper for
publication. Research assistantships from the Workshop in Political Theory and Policy Analysis,
Indiana University, Bloomington supported the authors during the writing of this article.
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 1 of 35
Summary
Internationally funded carbon forestry projects have become a central concern of scholars and
policy makers working on global climate change mitigation. The anticipated impacts of carbon
forestry projects on forest-dependent communities have been debated in terms of normative
concerns of equity and justice. We offer a positive and arguably more robust theoretical
argument supported by case-study evidence to demonstrate that for effective emission
reductions, the stakes of local communities must be built into carbon forestry projects. We also
contribute new insights and suggest specific institutional mechanisms to restructure the
monitoring arrangements for effective and efficient carbon forestry.
Key words: Climate Change, Carbon Forestry, Payment for Ecosystem Services, Common
Property Theory, Cases from Asia, Africa, and Latin America (Location)
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 2 of 35
1. INTRODUCTION
In this paper we employ theories of institutional analysis, in particular common property, to
analyze past carbon forestry projects and the ongoing debates about the United Nations‘ program
Reducing Emissions from Deforestation and Forest Degradation and its added role of
conservation, sustainable management of forests, and enhancement of forest carbon stocks
(REDD+). Basing our arguments on the fundamental theoretical premises informing REDD+ we
point out critical gaps between the theory and the broader focus of current policy debates. By
synthesizing lessons from four well-documented carbon forestry projects implemented in recent
times, we illuminate and contextualize the importance of institutional aspects that the ongoing
policy debates gloss over. We argue that the various proposals put forward for REDD+ need to
focus on the key task of ensuring emission reductions through forest conservation and
sustainable local development. Failing this, the global environmental policy community may risk
promoting carbon trade at the cost of sustainable development. Achieving the closely tied twin
agenda of successful REDD+ programs and sustainable development, we argue, is closely related
to making critical property-rights reforms mandatory for participating governments. We argue
that a nested governance approach to REDD+, in which local ownership of forestry resources is
paired with national policy objectives, is the most fruitful approach to achieving the core
missions advanced by REDD+ advocates.
The financial stakes involved with REDD+ are significant. Advocates of the program argue
that it could lead to a transfer of more than $10 billion from industrialized nations to tropical
forest countries by 2020, with a goal of reducing annual carbon emissions by 17–20% (Vidal,
2010). These volumes may explain why the debates over REDD+ are focused largely on the
development of financing mechanisms and national reporting requirements. The prevailing fund-
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centric view of REDD+ ignores the lessons of past failures at forest conservation, including
those where the World Bank, one of the key actors in the emerging REDD+ initiatives, invested
billions of dollars on afforestation and reforestation programs globally. Not only did some of
these investments fail to pay off, a major review commissioned by the World Bank revealed that
in many cases it actually worsened the emissions problem by creating monocultures, and
promoting increased deforestation (Lele et al., 2000).
The foremost challenge in implementing REDD+ is to ensure that these investments actually
lead to the promised carbon emission reductions and that the communities benefit from the
program as much as government bureaucrats. To this end, the recent experiences of carbon
forestry projects supported under the Clean Development Mechanism (CDM) of the Kyoto
Protocol and similar voluntary carbon forestry initiatives provide valuable lessons. The CDM has
similarly stated goals to REDD+, and the conceptual and operational challenges experienced in
existing carbon forestry projects are also likely to be faced at some stage in REDD+. Yet, to our
surprise, few studies have made this connection (cf. Corbera and Brown, 2010). Even fewer have
undertaken a systematic theoretical analysis of the fundamental theoretical link, a significant gap
that this paper addresses. Drawing upon the rich common-property literature from around the
world, we present a theoretical analysis of the institutional conditions that lead to successful
forest conservation efforts. The theoretical evidence is then combined with empirical case studies
to demonstrate how a failure to account for the key findings from our theoretical analysis was
linked to the challenges faced in the existing carbon forestry projects.
In the next section, we discuss the organizational structure of CDM and draw parallels with
ongoing debates about the institutional structure of REDD+. We then provide a theoretical
framework informed by the large literature on common property and forest governance in section
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3. This is followed in section 4 by a summary of key experiences and lessons from four different
case studies of carbon forestry projects located in a variety of sociopolitical, geographical, and
institutional settings. In section 5, we synthesize the findings from these case studies in light of
the theoretical framework we propose. We conclude this paper in section 6 with key findings
from the analyses presented in the paper.
2. KYOTO TO COPENHAGEN: ORGANIZATIONAL STRUCTURES FOR REDD+
Kyoto Protocol‘s CDM was created as a market-based program to reduce global carbon
emissions from energy production by encouraging firms or public agencies in industrialized
countries to buy carbon offset credits in developing countries. The hope for CDM was that it
would reduce emissions, and make ―contributions to the host country‘s sustainable development‖
(Hardner, Peter, & Darren, 2000: 62). While plantation forestry projects were allowed under
CDM, projects with the primary purpose of preventing deforestation or degradation were not
admissible under the protocol (Smith, 2002). By implication, a forestry company in a developing
country could qualify for carbon emission reduction credits by clear-cutting natural forest in
order to establish a tree plantation.
This devaluation of natural forests in favor of artificial forests led some countries to propose
REDD as a complementary program to CDM, focusing on carbon sequestration wholly from
reducing deforestation and forest degradation. Since then a consensus has emerged among policy
makers and scholars to add plantation forestry projects (while not allowing a plantation to
replace an existing forest) to create REDD+ (Angelsen, 2009). The historical link between CDM
and REDD+ and the common theoretical mechanisms that inform each of these allows us to
make use of lessons learned under CDM to inform our discussion of implementing effective,
multiscale REDD+ governance systems. In this section, we compare and contrast three potential
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REDD+ governance structures: full decentralization, full nationalization, and a nested approach
in light of the experience so far.
The organizational structure of CDM operates under the supervision of an intergovernmental
board of governors, which reports to the Conference of Parties to the United Nations Convention
on Climate Change. The CDM Board supervises CDM activities and approves accreditation of
Designated Operational Entities, which are international agencies or corporations 1 that validate
proposed CDM projects, verify the emission reduction occurring from a registered CDM project,
and request the CDM Board to issue Certified Emission Reductions (CERs).2 Designated
Operational Entities work closely with each country‘s Designated National Authority, which are
the country-specific government agencies that serve as primary overseers of CDM in-country
activities. Designated National Authorities, in turn, certify that a project proposed by a
Designated Operational Entity is in conformance with its national sustainable development
objectives.
The Kyoto Protocol does not specify how CER credits and the finances they generate should
be distributed. A quick survey of reports on existing projects under the mechanism suggests that
after the CDM board has approved a CER on the recommendation of a Designated Operational
Entity, funds are exchanged directly between the seller and the buyer without involving
government agencies. In this sense, CDM serves as a project-based, subnational arrangement, as
it is referred to in the ongoing REDD+ discussions (Figure 1), with regulatory oversight from
both international and national organizations (Angelsen, 2009).
[Figure 1 here]
While the responsibility of ensuring that national sustainable development goals are met lies
with the Designated National Authorities, they are usually poorly financed and staffed, and lack
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adequate incentives to accomplish this in practice. CDM is, in many ways, a decentralized
mechanism. In contrast to CDM, if REDD+ takes a more national approach (Figure 2), national
governments will have a fair degree of autonomy in conducting and coordinating their domestic
REDD+ activities.
[Figure 2 here]
Advantages of a national approach include achieving better convergence of policies across
sectors and avoidance of leakage (Vatn & Angelsen, 2009). As opposed to the existing studies
arguing that a national architecture will lower monitoring costs (ibid.), we show below how
monitoring costs can be significantly lowered by involving local users, at the same time creating
synergistic effects toward forest protection. Given the current sociopolitical configurations in
most forested countries, a national approach is likely to lead to recentralization of forest
governance (Phelps, Webb, & Agrawal, 2010). When national governments are given sole
authority to monitor projects and disperse profits from these projects, they may seek to
consolidate direct control over project implementation (Sandbrook et al., 2010). Three
consequences of this approach are likely to adversely affect the incentives of local communities,
and perhaps local public officials, each one of them critical to forest conservation.
First, national ministries are likely to rely on large-scale afforestation projects in areas
currently used by forest users to stock CERs while finding ways of continuing to exploit forest
resources already under its control. It is likely that public agencies claim ownership of carbon in
forests without sharing significant benefits with current forest users.3 Second, by granting public
agencies the authority of distributing REDD+ resources to various stakeholders, projects will
become further subject to rent seeking by government officials at various levels of the public
hierarchy. Third, while national- level aggregate monitoring helps overcome the problem of
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leakage, ignoring intranational variations will almost certainly dampen local incentives for forest
protection. When this happens, the anticipated gains of a national architecture in creating
interregional and intersectoral synergies may be of little use.
In addition to wholly decentralized proposals and wholly nationalized proposals for the
organization of REDD+, some recent attention in the literature has been given to a nested
organizational approach (Figure 3). Under this proposal, REDD+ would operate under a
combination of subnational and national arrangements, in which primary responsibility for
project verification and implementation would take place at a subnational level, involving both
local forest users and regional government officials (Angelsen, 2009). A nested approach also
would result in lower costs for monitoring and verification of project activities since the monitors
would be closer to the project activities than centralized national bureaucrats. Under such an
arrangement, the benefits of carbon trade would be directed to forest users helping protect
forests, while national governments would still have primary responsibility for coordinating
national emission reduction targets.
[Figure 3 here]
Key proponents of a nested approach view such an approach as a short-term stepping stone
to a national approach (Wertz-Kanounnikoff & Angelsen, 2009). Such an approach, however, is
indicative of what Arun Agrawal4 refers to as ―chasing capacity‖—as if the most serious problem
in implementing carbon offset projects is a lack of current capacity on behalf of national
governments. This presupposes that the actors in the national government would implement good
resource policy if they had sufficient capacity. Rather, many national government actors enact
poor resource policies precisely because they stand to benefit from the failed policy either
through increased rent capture or corruption (Ascher, 1999). In light of such evidence, unlike
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previous REDD scholars we argue that treating a nested approach merely as a stepping stone
toward a national architecture will create disincentives for national governments to pursue local
reforms, particularly in the realm of property-rights recognition. We demonstrate that a nested
approach to government is the key to successful implementation of REDD+, not just an
intervening step along the way. The following section further develops the theoretical benefits of
a nested approach.
3. THEORETICAL FRAMEWORK: A NESTED APPROACH TO REDD+
GOVERNANCE
This section presents a concise summary of the theory of common property (Ostrom, 1990;
Agrawal, 2001), with a particular focus on illuminating the complementary role of national and
subnational governments in promoting the dual objectives of sustainable forest use and local
development. At the local level, we focus on the microincentives faced by forest users in
harvesting, monitoring, and enforcing rules governing forest use. At the national and subnational
levels we focus on the role of central governments in defining and protecting property rights. By
coordinating policy across levels of governance and clearly delineating the responsibilities of
different levels of government, REDD+ could help effectively reduce carbon emissions and
provide livelihood opportunities to local communities best placed to contribute to forest
conservation (Minang & McCall, 2008). The theoretical arguments and empirical evidence
presented below would imply that stakeholders exercise caution against assuming that REDD+
can generate emission reductions irrespective of local livelihood benefits.
The core mechanism proposed in REDD+ is to create an economic asset out of carbon
sequestration in the form of a Certified Emission Reduction (CER) unit that is bought and sold in
an international market. A CER is fundamentally dependent on the underlying condition of the
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 9 of 35
physical forest asset for its valuation. In principle, the link between forest condition and the
value of a CER is sufficient to incentivize the owners of the forest to maintain its condition
(Angelsen, 2009). However, in practice, this link is more complex and policy makers may do
well to account for these nuances.
First, it requires that clear and enforceable ownership rights to the forest and to the CERs
exist so that those instrumental in maintaining or improving forest condition accrue the returns
from carbon forestry. Second, the success at REDD+ requires that the forest asset be quantifiably
measurable to ensure both that those protecting forests receive a fair return for their investments
and that the buyers of a CER receive a fair value for their purchase. Third, it requires that the
asset be regularly monitored to ensure the physical asset maintains its value beyond the point of
sale. If any of these necessary conditions are not met, the uncertainty over true forest condition
will decrease the open market value of a CER regardless of true forest condition. Therefore, even
if the eventual goal for REDD+ is to work out national accounting systems in order to avoid
intranational leakages (Vatn & Angelsen, 2009), the task of forest protection will have to be
coordinated locally and across a variety of forest conditions throughout a country. Missing out
on this key distinction may cost the effectiveness of REDD+ in promoting forest protection if a
national architecture leads to increased de facto powers in the hands of national bureaucracies.
Successful forestry management often requires that residents living in or near the forest are
granted rights (or have pre-existing rights acknowledged) to use the forest. It also requires that
those with rights to use the resource acknowledge and follow a system of rules governing
resource use, monitoring, sanctioning, and enforcement (Ostrom, 1990). Commons scholars have
repeatedly found that monitoring by local users is associated with successful resource outcomes
regardless of the ownership (Coleman, 2009; Gibson, Williams, & Ostrom, 2005). Monitoring
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 10 of 35
and enforcement by government agents can also be effective in many settings, especially in the
developed world, but there is growing evidence that endogenous rule enforcement is highly
correlated with success in forest conservation (Coleman, 2009). Because local resource users
interact with one another on a regular basis, and are in the forest relatively frequently compared
to local officials, they are most able to identify rule violations. This form of monitoring can often
occur at much lower cost than central government control and provides a rationale for REDD+ to
emphasize local ownership of forestry resources. However, the success of local monitoring
cannot be achieved in isolation of local users‘ dependence on forests for meeting their livelihood
needs.
In many areas of the world, forests provide mushrooms, herbal remedies, fodder, fuel (in the
form of downed trees or limbs), and numerous other non- timber forest products. Many of these
uses have no consequential negative effect on efforts of carbon sequestration. Policies that
prohibit any form of harvesting from or use of a forest are ineffective precisely because local
residents dependent on the forest are forced into underground or black market activities in order
to earn a subsistence standard of living (Grieg-Gran, Porras, & Wunder, 2005). Instead, REDD+
must recognize the important role multiple uses of forests have and encourage non-timber
product uses for local development. The potential for such synergies has found support in large-
N studies combining data on biophysical, economic, and institutional aspects of local forest
management (Chhatre & Agrawal, 2009).
Community groups organized to protect their forests under locally designed and generally
accepted institutional arrangements may be faced with timber or wildlife poachers. In such a
forest setting, a multilayered governance approach is necessary to ensure that even if poachers
are not susceptible to the rules or sanctions present in the local institutional framework, they can
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 11 of 35
still be held legally liable for their actions at a higher level of government like a municipal or
regional court (Schlager & Ostrom, 1992). When poachers hold an asymmetric power
relationship with local communities, the need for a multilayered approach to institutional
development and enforcement becomes even more important. If poachers can simply bribe
corrupt regional officials or trick local communities into trading or selling away rights without a
full understanding of the legal framework, then these poachers can frustrate institutional
arrangements and must be held liable through some higher- level authority. This underlines the
complementary role that local forest-dependent people and government agencies and officials
working at different levels have in ensuring the overall success of REDD+.
4. LEARNING FROM EXISTING CARBON FORESTRY PROJECTS
A number of carbon forestry projects have been implemented throughout the world in recent
years thereby providing valuable real-world case studies available for those engaged in the
ongoing debates around REDD+. In this section, we discuss four such case studies, with the aim
of illustrating the difficulties in implementing carbon forestry projects without creating
significant stakes for local communities. These cases also demonstrate how carbon forestry
projects influence the incentives of actors involved in the projects implemented in a variety of
property rights in forests and forestlands.
(a) ITC’s social forestry project
The Indian Tobacco Company (ITC), one of the largest paper and pulp companies in India,
has for decades entered into buy-back contracts with local farmers for an assured supply of raw
material that goes into pulp and paper production. Showcasing ITC‘s achievements in
developing private forestry, a company official wrote in 2001 that because of the government‘s
land ceiling law the company was not in a position to develop captive plantations, and the ―only
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 12 of 35
alternative‖ it had was to promote ―farm forestry plantations on marginal agricultural lands‖
(Lal, 2001:33–34). However, the company has since won a CDM project for the same project
that the official described above as the ―only alternative.‖
In this case, ITC has been able to pass on as a carbon sequestration project an activity that is
central to its core business of paper and pulp production and has been in operation since 2001,
and which didn‘t bring about any additional carbon sequestration (Tiwari & D‘Souza, 2009). In
case of commercial plantation, the theoretically expected gains of improved incentives for
afforestation are realized only if the incentives are directed to the landowners who make land-use
decisions. Since ITC neither owns the land planted nor bears any of the costs associated with
plantations, its ownership of carbon credits falls simply in the category of speculative business
transactions (Lohman, 2008). In this case, since the income from carbon trade goes to ITC,
farmers‘ incentives to grow trees haven‘t changed compared to the pre-CDM scenario. Not
surprisingly then, independent assessments suggest that the farmers cut trees sooner than the
claimed project cycle because putting their lands to farm forestry isn‘t sufficiently profitable
(Tiwari & D‘Souza, 2009).
Neither the Designated National Authority nor the project validating agency recognized this
discretion before approving the project. This suggests that significant asymmetries are likely in
the national system of verifying and monitoring emission reduction commitments made by
project proponents. Indeed, it also shows that it is possible to ―game‖ the system (Eastin,
Grundmann, & Prakash, in press). Next, we consider a case of a national wildlife service
collaborating with a private foundation to undertake some carbon forestry plantations.
(b) The UWA-Face carbon forestry project in Mount Elgon
The Uganda Wildlife Authority (UWA) and the International Union for Conservation of
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Nature (IUCN) had been discussing ways of dealing with a long-standing conflict over the
boundaries of Mount Elgon National Park, part of which local residents had farmed and claimed
as their own. These plans were abandoned in 1994 when the UWA and the Dutch Face (Forests
absorbing carbon dioxide emission) Foundation signed a contract for reforesting the foothills of
Mount Elgon—an area with a long history of conflict between local communities who claim
customary ownership of some of the park land and the Ugandan government that created the
park (Lang & Byakola, 2006). As per the contract, the Face Foundation would own the carbon
rights to the pledged forests for the next 99 years, while the UWA retained the ownership of
―trees and other proceeds‖ from the forest.
The park boundaries have been redrawn multiple times since 1993, including the last time it
was done to facilitate UWA-Face carbon plantations. This demarcation cut across several fields
claimed by locals, some of who inherited legal titles from their parents. Others had apparently
―purchased‖ some of the land during the late 1970s from forest guards who were desperate to
make some money after not being paid for months. Legal challenges to plantations began in 1998
when some local communities filed a suit against the UWA, resulting in an injunction to allow
communities to farm parcels of land that they used to cultivate within the park. However, park
authorities continued to prevent locals from farming and harvesting even in the cases where their
claims were supported by the injunction. Some of the families that had been displaced from the
forests deep inside the park in 1993, were displaced a second time in 2002 in preparation for the
UWA-Face carbon plantations.
When contacted by the researchers, the international monitors who verified Face‘s carbon
sequestration claims, refused to discuss the evictions and how they might affect the project‘s
claim for carbon sequestration, suggesting that the information was confidential (Lang &
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Byakola, 2006). While the larger problem of land rights is a major issue, what has prevented this
from becoming an issue related to carbon forestry locally is that communities have not been
informed about the plantations being part of a carbon forestry project. For them, it is just another
instance of the government asserting its control over disputed lands.
The UWA-Face project highlights the issue of contested land tenures that is far too common
throughout the forest areas in Africa, Asia, and Latin America. The national parks and other
reserves have often been set up in forests where indigenous and other forest-dependent
communities have lived for generations with or without statutory recognition of their customary
rights (Brockington, Igoe, & Schmidt-Soltau, 2006). The creation of REDD+ projects at the
expense of resolution of the pre-existing conflicts around land tenure is not amenable to any
long-term benefits of carbon sequestration, let alone sustainable development. Statements of
Mount Elgon communities indicate to the potential for cooperation once their fields have been
marked properly and they themselves are beneficiaries of carbon forestry (Lang & Byakola,
2006). A case that partially exemplifies this potential is discussed next.
(c) Noel Kempff Mercado Climate Action Project
One of the earliest projects that sought to avoid deforestation by purchasing existing logging
concessions, the Noel Kempff Mercado Climate Action Project (NKMCAP), was signed in 1998
between the Government of Bolivia, Fundación Amigos de la Naturaleza (FAN, a national non-
government organization [NGO]), the Nature Conservancy (TNC), and a consortium of energy
companies and electric utilities. The project implemented in the Noel Kempff National Park
explicitly included three key objectives: carbon sequestration, biodiversity conservation, and
local sustainable development. The area of park was almost doubled as a result of inclusion of
former logging areas into the boundaries of the park. Even though the ending of logging
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 15 of 35
activities would improve forest conservation and biodiversity resources in the park, the local
communities stood to lose employment opportunities and faced the possibility of new restrictions
to access their customary lands (Smith & Scherr, 2003).
The most notable success story of the project so far has been the creation of a land-titling
program that has helped to formalize the legal protection of indigenous lands adjacent to the park
totaling nearly 400,000 ha (Boyd, 2009). The title was granted to an indigenous community
organization, which has significantly improved the capacity of indigenous communities to
negotiate with other actors and to craft sustainable management plans.
Carbon rights from the project are controlled centrally by the Bolivian government, which
receives 49% of all carbon credits generated, of which 20% is shared with NGOs. The remaining
51% of carbon credits are divided among the project‘s private-sector investors. While none of
the proceeds from carbon trade go to the communities involved, a project linked to NKMCAP
has undertaken several developmental activities. We do not question the potential success of
these activities itself, but we are skeptical that the benefits of such projects can be sustained over
the long gestation of carbon forestry projects. For instance, studies have demonstrated that the
microcredit activities implemented as part of the project have found limited success (Boyd,
2009). That being the case, while project proponents may consider those funds to have been
spent on ―sustainable development,‖ they are unlikely to contribute toward bolstering local
incentives for forest conservation.
Even so, this is perhaps one of the most promising projects we have come across in the
literature. First, it explicitly recognized the importance of and helped create legally enforceable
property rights in forests that the communities had lived in without formal recognition of their
customary rights prior to the project. Second, the project seems to have successfully created
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 16 of 35
processes of deliberations among community members enabling them to deal with future
community projects in a more efficient manner. Third, the project also involved communities in
monitoring the disassembling/discontinuation of logging operations. However, there is still
significant scope for improvement in the project design (see also Corbera & Brown, 2010). Even
though local communities have benefitted from land titling and some developmental
interventions launched with project funds, communities do not get a share of the proceeds from
carbon trade, thus severing the vital link between carbon sequestration and community activities.
(d) Local monitoring for forest conservation
One of the most consistent findings from studies of community-based forest management is
that monitoring and enforcement are necessary conditions for successful resource management
(Gibson, Williams, & Ostrom, 2005; Coleman, 2009). Yet, the ongoing debates on ―monitoring‖
treat it merely as a synonym for auditing ex post facto. It is perhaps because of such a narrow
understanding of the concept that doubts are often expressed about whether community-based
monitoring is relevant to apparently more technical monitoring and reporting requirements
anticipated under REDD+.
Margaret Skutsch (2005) reports on an action research project titled ―Think Global, Act
Local – Action research to bring community-based forest management projects under the
UNFCCC and the Kyoto protocol‖ implemented across five countries in Asia and Africa in 13
forest sites with 50–250 ha of forest at each site. The project is developing participatory
geographical information systems that are fed with georeferenced base maps. Handheld
computers and global positioning systems are used by community members for real-time
monitoring and data recording. Community members with four to seven years of education have
been trained in user-friendly and IPCC-compliant measurement and monitoring techniques
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 17 of 35
developed by scientists from a region. Key steps in the process entailed the following (Skutsch,
2005:437): (1) create an accurate map of the forest under local management and calculate its
area; (2) classify forests according to their growth characteristics and record this information; (3)
lay out permanent and representative sampling plots; and (4) record basic information such as
species, condition, diameter at breast height, and height of each tree, and weight measures for
ground vegetation.
The initial costs of the program were half of what local professional personnel would charge
for similar services, and the costs are expected to drop as the technology becomes more readily
available. Similar programs have been undertaken elsewhere, for instance in Cameroon (Sonwa
& Minang, 2009) and Mexico. In the Scolel Te project in Mexico, local monitoring has greatly
reduced transaction costs. This in turn led to better returns to participating farmers (Cacho,
Marshall, & Milne, 2005). Skutsch (2005) also proposes that the monitoring and measuring
protocols could find applications in, and we agree that it would greatly improve, the pre-project
and project documentation, and subsequent processes of validation and approva l of carbon
forestry projects.
5. ANALYSIS
A summary of the empirical evidence presented in the previous section is provided in Table
1 below. Notwithstanding that most projects have not fared well due to what could be referred to
as the ―sustainability test‖‘ of CDM/REDD+ (Brown et al., 2004), we seek to draw attention to
the finer institutional issues that seem to have received less attention in the literature. In what
follows, we analyze the implications of the empirical evidence presented above revisited in the
context of the theoretical framework outlined in section 3.0.
[Table 1 Here]
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 18 of 35
(a) No trees without tenure: “carbon rights” as the starting point
One key finding jumps out from the empirical evidence presented in the previous section
and a general survey of the literature on existing carbon forestry projects: Carbon rights are
rarely vested in local forest users. It is relevant to recall that key theoretical argument of REDD+
is that ―it provides strong incentives directly to forest owners and users to manage forests better
and clear less forestland‖ (Angelsen, 2009:xii, italics added). Yet, in many carbon forestry
projects, forest users and local community groups received a lump sum payment, which barely
covered labor costs, and forest users weren‘t even aware of the existence of carbon forestry
projects (Granda, 2005). Similarly, attempts at ―paying‖ communities through ―development
projects‖ without linking them carefully and directly to the returns from carbon sequestration are
unlikely to sustain REDD+ in the long run (Boyd, 2009; see also Sunderlin et al., 2005).
The disjuncture between the theoretical propositions underlying carbon forests, including
REDD+, and the discussion of carbon rights for forest users as an afterthought suggests that
community property rights are not being taken seriously (Angelsen, 2009; Cotula & Mayers,
2009). 5 The readiness plans submitted by national governments are not paying the required
attention to the much talked about issues of tenure security and benefit sharing (Phelps, Webb, &
Agrawal, 2010). On the other hand, given the speed with which REDD+ negotiations are
evolving, there may be a slight possibility of achieving property rights reforms in a realistic time
frame (Sandbrook et al., 2010). The key is to ensure that countries participating in REDD+ have
in place a plan for recognizing and enforcing local rights to forest use.
(b) Beyond command and control: rethinking “monitoring” in REDD+
The theoretical framework we outline in this paper places ―monitoring and enforcement‖ as
key factors contributing to successful forest management. Yet, a scan of debates over
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 19 of 35
monitoring, verification, and reporting in REDD+ reveals that ―monitoring‖ is used merely as a
synonym for ―auditing,‖ which is seen mainly as the role of governments, or even regional
intergovernmental organizations (Herold & Skutsch, 2009; Wertz-Kanounnikoff & Angelsen,
2009; cf. Skutsch, 2005). For example, the Forest Dialogue, a global initiative launched in 2007
to facilitate multisector dialogue and consultation over international carbon forestry agreements,
and UN-REDD (http://www.un-redd.org) emphasize creating government regulations and
structures, managing national inventories through data analysis, and third-party monitors.6
Based on the theoretical and empirical analyses presented above, however, we argue that
ongoing local monitoring offers a double advantage: it is directly linked to local forest
conservation efforts, and in the process reasonable estimates of carbon sequestration can be
culled from data collected by local communities. Local forest users are usually in a better
position to observe activities within the forests than central bureaucrats or external auditors.
When monitoring has been placed exclusively in the hands of external monitors, it leads to high
transaction costs. Moreover, inefficient bureaucratic structures frequently present an inaccurate
picture of forest condition (Nagendra, 2007). Although scholars often point to the technical
nature of carbon accounting procedures, as documented above, several attempts are underway to
simplify the technical aspects of collecting and recording data on carbon sequestration, which
should further improve the chances of community participation in monitoring.
Given the level of scientific uncertainty over precise calculations of carbon sequestration
levels, we suggest that simpler carbon accounting systems based on user monitoring and
accounting activities should receive wider attention and appreciation. More important, these
monitoring activities are, and should be, an integral part of the business of local forest
governance as reported widely. Finer carbon sequestration measurements could be conducted at
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 20 of 35
randomly selected sample sites as part of third-party validation processes. Such a combination of
local and external monitoring is likely to offer synergetic conservation, development, and
governance benefits.
(c) Overcoming the scale disadvantages: a nested enterprise for cross-scale linkages
Local projects and forest communities, best placed to respond to some of the most daunting
challenges of carbon forestry, are at a disadvantage in their inability to achieve economies of
scale. National governments and international agencies may find it challenging to deal with
disparate user groups undertaking forest protection and real- time monitoring and enforcement.
Public agencies and officials located at different scales will have a role in coordinating policy
implementation and in overall monitoring. Yet public bureaucracies, left to their own actions,
may not function efficiently. As scholars have argued in the context of forestry decentralization,
public agencies and governments are likely to perform better when local forest users are
mobilized and cooperate with regional or national bureaucracies (Agrawal & Ostrom, 2001).
The mobilization of forest users and local forestry groups has been achieved in a variety of
contexts. For example, active forest user groups have been mobilized into a national federation in
Nepal, a number of regional federations in India (Wollenberg et al., 2006), and rural producers‘
federations in Latin America (Bebbington, 1996), and efforts are underway to organize
community forest management associations into federations that may participate in
Madagascar‘s protected areas management (Ferguson, 2009). In general, it is clear that the role
of forestry federations has been undertheorized in the literature. Even so, we do not suggest
setting up new government-mandated federations as part of the REDD+ governance mechanism.
Indeed, federations that evolve organically from the ground up are likely to best represent their
constituents‘ interests (Bebbington, 1996). We instead argue that the recognition of existing
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 21 of 35
federations and the establishment of legal frameworks that allow federations to form in new
places are essential to coordinate among multiple levels of government and across wide
geographical areas.
Forest federations can play an important role in various aspects of REDD+. For example,
federations with a wide reach and membership among remote forest communities may also be
well placed to train community members in basic carbon monitoring and measurement
techniques, in line with the success of Skutcsh‘s (2005) experiment. Federations could also
function as aggregating agencies, allowing for multiple communities with independent REDD+
project proposals to enjoy economies of scale in registration and set-up costs A similar approach
has been employed in the Scolel Te project in southern Mexico where a user federation functions
as a market intermediary, aggregator, and the general clearing house on regional implementation
of the CDM agroforestry project (Cacho, Marshall, & Milne, 2005). Additionally, by linking
forest users and external agencies, forestry federations can work as sources of credible
commitment for local users. Notwithstanding the selective success of forestry federations
illustrated here, a vast majority of forest-dependent people live in a world of information
asymmetry and information hoarding, as the current level of awareness about carbon forestry
projects suggests. This often forces them to either stay away from, or participate only
superficially in, many developmental interventions that are not communicated to them through
carefully designed strategies (Huesca, 2006). Since ensuring participation of forest-dependent
people is a key to ensuring REDD+ success, it may be wise to make use of forestry federations
and other endogenous channels of communication.
(d) The REDD architecture
For the most part, discussion on institutional architecture for REDD+ seems to be focused
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 22 of 35
on finances and the trio of monitoring, reporting, and verification (MRV) (Angelsen, 2009). In
several cases we presented above, the extensive national and international hierarchy of monitors
could not detect the problems described by the authors and several others (Corbera & Brown,
2010). Arguably, this could be attributed to a single-minded focus on certifying CERs even when
the additionality or the long-run sustainability of CERs was doubtful to begin with. Therefore,
we would place the tasks of (external) MRV as being secondary to and only a means to
promoting effective forest conservation. Forest conservation requires careful attention to relevant
institutions, which are needed to ―manage information and incentives‖ (Wertz-Kanounnikoff &
Angelsen, 2009:13). We argue that this insight has not been fully internalized in the extensive
debate over REDD+ as it should be.
The core design elements in REDD+ institutional design should be aimed at bolstering the
incentives of forest communities and forest owners to conserve forest resources. Given this, a
nested approach to REDD+ that relies on flexible and adaptive polycentric institutional
arrangements is more likely to be successful. As William Clark has argued, ―we are not smart
enough to manage a system as complex as the interaction of a global economy and the planet as
though we had a blueprint.‖7 Despite such warnings, a blueprint national REDD+ architecture as
the ultimate goal seems to be gaining currency among policy makers and scholars. Such a
national architecture is a clear invitation to centralization of powers and authority (Phelps, Webb,
& Agrawal, 2010; Sandbrook et al., 2010).
Recentralization is not merely a theoretical possibility, and avoidable, as Wunder (2010)
argues. Indeed, one of the original proponents of REDD, the Government of Papua New Guinea,
has in recent times curbed indigenous land rights rendering community groups unable to legally
contest awards of projects deemed to be in ―national interest.‖8 Similarly, India‘s forest
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 23 of 35
authorities have sought to bring under carbon forestry the forestlands long held by indigenous
community groups in North East India under shifting cultivation (Kant & Shuirong, 2008). This
is contentious, to say the least, because the cultivation rights in this case were already recognized
under India‘s Forest Rights Act of 2006.9 It is important to foresee these tendencies of national
ministries and forest agencies to recentralize control over forests. Binding obligations of national
governments to secure tenure rights of local communities and assured benefits to groups
protecting forests can help avoid such recentralization (Sandbrook et al., 2010; Sunderlin,
Larson, & Cronkleton, 2009).
A nested architecture (Figure 3) could serve better in the face of scientific, institutional, and
operational uncertainties over how exactly REDD+ interventions will work on the ground. The
roles of key actors in such architecture could then be proposed as follows:
(1) National governments – responsible for national policy frameworks, particularly in protecting
customary and modern property rights of forest users and forest owners.
(2) Subnational/provincial government – responsible for promoting REDD+ programs with
participation of civil society groups with relevant expertise and capabilities; help liaison between
forestry federations and national policy-making bodies.
(3) Forest users and forestry federations – help evolve and promote grounded and locally
productive REDD+ interventions designed to co-produce multiple forest benefits, in particular
carbon sequestration and other ecological services, local livelihood benefits, and economic
development benefits.
(4) Civil society organizations and private businesses – participate in selective third-party
monitoring; oversee and track adherence to sustainable development principles pledged by world
leaders; build capacities of community groups and federations in improving REDD+
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 24 of 35
performance on the ground; and national and international policy feedback.
6. CONCLUSION: PROPOSING A REDD+ REGIME FOUNDED ON THE PRINCIPLE
OF SUSTAINABLE DEVELOPMENT
REDD+ has come to occupy a central policy and research space in the ongoing debates over
global forest governance (Angelsen, 2009). It is premised on the powerful idea that forest
communities and other forest owners protecting forests contribute to the global public good of
climate change mitigation and ecological resilience, which should be recognized and rewarded.
However, this idea is often being compromised in the zeal to make rapid progress (Sandbrook et
al., 2010). In this paper, we have shown that paying close attention to the incentives that forest
communities and forest users have (or do not have) in conserving forests is fundamental to the
success of REDD+ in bringing about forest conservation and emission reductions. Therefore, the
need to direct significant benefits to forest communities should be regarded as a central
objective, rather than as an afterthought. This will produce improved conservation, secured
livelihoods, and development opportunities to forest communities as means to effective climate
change mitigation. More important, it will simultaneously provide the foundations for local
adaptations (Fisher, Chaudhury, & McCusker, 2010).
We recognize the potential problems in focusing on microincentives (Vatn & Angelsen,
2009). Therefore, we have focused on how the insights from a robust body of scholarship on
common-pool resources and common-property regimes could inform our approaches to specific
elements of a nested REDD+ architecture. For instance, instead of arguing for either a totally
decentralized or a centralized model of property rights with specific funding flows as argued by
Johns et al. (2010), we have discussed the roles that different actors can play at various levels of
governance in effective REDD+ implementation. Second, a focus on rights of local communities
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 25 of 35
may be faulted on ignoring issues of scale in a global program of the size and spread of REDD+
(Minang, McCall, & Bressers, 2007). In response, we argue that forestry federations and other
civil society groups working in collaboration with public agencies can be effective across scales.
Instead of the current emphasis on exclusive carbon forests (cf. Boyd, 2009), we argue that
local communities who depend on forests for their livelihoods should be allowed to continue
subsistence uses that don‘t compete with the carbon sequestration functions of forests. We have
also demonstrated how it is possible to suitably modify REDD+ components, such as
monitoring, to suit the capacities of local groups rather than expecting them to fit into
frameworks that are predetermined at the global level. Thus, we show that the proposition of
nesting need not be seen as the dominance of higher scales over lower scales as some have
suggested (see, for example, Forsyth, 2009). In seeking to involve local community groups and,
wherever possible, forestry federations and other higher- level organizations in monitoring, we do
not ignore the need for third-party monitoring. Instead, we argue that third-party external
monitors could be employed sparingly, and that they can be sponsored by a REDD+ governing
body instead of the monitors employed and paid by project proponents, as was the case with
CDM (Repetto, 2001).
Provincial and national governments have important roles in facilitating suitable reforms
aimed at clarifying and securing carbon rights, and enforcing them when legitimate right holders
are faced with recalcitrant, powerful poachers. As Cotula and Mayers (2009) argue, success of
REDD+ on the ground is going to be affected significantly by how the benefits are allocated
within countries. It is for this reason that we think REDD+ architecture should require national
governments to carry out vital forest tenure reforms where they are missing (Sunderlin et al.,
2009). In the existing debates, national governments are expected to undertake reforms and
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 26 of 35
sincerely implement them, which is unlikely to materialize given the past track of such reforms
not implemented unless national governments were forced to do so (Sandbrook et al., 2010; see
also Tacconi, 2007). Without such mandatory provisions, aggregate REDD+ funds are going to
be significantly attractive for the national or provincial public forest agencies in large forested
countries such as Indonesia, India, Brazil, and China, creating incentives for them to take control
of forests or even to recentralize (Phelps, Webb, & Agrawal, 2010). In fact, the reigning
consensus for promoting the ―national REDD+ architecture‖ in the long run creates additional
incentives for national governments to postpone reforms or even avoid them.
Considering such possibilities, we reemphasize the need to reorient REDD+ as a mechanism
that fits into the broader and ongoing movement for effective forest governance instead of
creating governance arrangements that cater solely to REDD+ requirements (Cotula & Mayers,
2009). Such propositions, we have argued, are borne not merely out of normative preference for
democratic forest governance and equitable ―benefit sharing,‖ as the common refrain is, but out
of our concern for the success of REDD+ at its core business of forest conservation and emission
reduction. By arguing for such fundamental integration of sociopolitical issues with concerns for
program effectiveness, we propose a substantive approach to embedding sustainability within the
core principles of REDD+.
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NOTES
1 The list of approved DOEs include Japan Quality Assurance Organization (JQA), British Standards
Institution (BSI), Spanish Association for Standardisation and Certification (AENOR), Det Norske
Veritas (DNV), and PricewaterhouseCoopers (PwC).
2 These details on CDM architecture are based on the information available on the website of the United
Nations Framework Convention on Climate Change (UNFCCC) at http://cdm.unfccc.int/about/index.html
accessed September 1, 2010.
3 Agrawal, A. (2010). "Seeing REDD Over Forest Peoples." Retrieved September 10, 2009, from
http://news.bbc.co.uk/2/hi/science/nature/8660845.stm.
4 Agrawal, A. (2010). "Seeing REDD Over Forest Peoples." Retrieved September 10, 2009, from
http://news.bbc.co.uk/2/hi/science/nature/8660845.stm.
5 The phrase is inspired by Cotula and Mayers (2009).
6 TFD (2009). Investing in REDD-plus. New Haven, Connecticut, The Forest Dialogue (TFD) Steering
Committee. Retrieved August 5, 2010, from
http://unfccc.int/files/methods_science/redd/application/pdf/tfd_invest ing_in_redd-
plus_en_recommendations.pdf
7 Interviewed by Doug Gavel, June 11, 2009, "William Clark on Sustainable Development." Retrieved
September 9, 2010, from http://www.hks.harvard.edu/news-
events/publications/insight/international/william-clark.
8 Anon (2010). "Papua New Guinea: Indigenous People Lose Out on Land Rights." Retrieved September
10, 2010, from http://www.irinnews.org/report.aspx?ReportId=89322.
9 GOI (2007). The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest
Rights) Act, 2006. No.2 of 2007. New Delhi, Ministry of Law and Justice, Government of India.
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 1 of 35
Linkages: CERs ( ), finance ( ), governance ( )
Figure 1: The CDM Structure (project-based/sub-national architecture)
Buyers in Developed
Countries
COP & CDM Board
Designated
Operational
Entities National Governments &
Designated National
Authority Sellers
(Actors & Agencies in
Developing Countries)
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 2 of 35
Linkages: CERs ( ), finance ( ), governance ( )
Source: Adapted from Wertz-Kanounnikoff & Angelsen (2009)
Figure 2: State Centric REDD+ Mechanism (National Architecture)
COP & REDD Board
National
Governments &
Designated National
Authority
Sellers
(Actors & Agencies in
Developing Countries)
Buyers in Developed
Countries
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 3 of 35
Linkages: CERs ( ), finance ( ), governance ( )
Source: Adapted from Wertz-Kanounnikoff & Angelsen (2009)
Figure 3: Nested REDD+ Architecture
COP & ‘REDD Board’
‘Subnational
Activities’
Buyers in Developed
Countries
National
Governments &
Designated National
Authority
Sellers
(Actors & Agencies in
Developing Countries)
―REDD Blues‖: Trading in Forestry Carbon Credits without Trading off Sustainability Page 1 of 35
Table 1: Key Issues in the Carbon Forestry Projects Surveyed
Project Legal Land
Ownership
Who Owns
Carbon
Credits
Role of State Key Issues Lessons/Suggested Improvements
ITC Social
Forestry,
India
Private
Landowners
Indian Tobacco
Company
(paper
manufacturer)
None 1- CDM funds went into supporting ‗business as
usual scenario‘
2- Individual farmers have no additional
incentives to protect trees
3- The project documents padded up with proposal of activities irrelevant to improving
success of private plantations
1- Directing incentives to those who make land-
use decisions.
2- Direct participation of local communities in
project formulation and monitoring
3- Concerted efforts to disqualify speculative trade in carbon credits
UWA-Face
Plantations,
Uganda
State
(national
park)
Face
Foundation
(private)
Repressive
enforcement of
park boundaries contested for a
long time
1- Carbon forestry reinforced conflicts over
customary lands declared as a park
2- Violent evictions led to hardships and human-rights violations
3- Obvious threats to the plantations and
significant leakages
4- Violations of injunctions issued by a court of
law
1- Proper vetting of proposals for implications
for historical/ongoing conflicts
2- Building community stakes in the project instead of displacing them by force
3- Avoiding concentrated finances being made
available to public agencies, which might create
incentives to recentralize/gain control
4- Focusing attention on broader forest governance
Noel Kempff
Mercado
Climate
Action
Project, Bolivia
Government
of Bolivia
Government of
Bolivia, an
NGO, and a
number of
private investors
Establishing
linkages between
different actors;
supporting land-
titling program and creation of
community
forests
1- Logging operations bought over
2- Statutory recognition of indigenous land rights
community-forestry programs for the
communities
3- Partially successful development interventions, not directly linked to carbon sequestration
4- Carbon rights owned by non-community
agencies
1- Secured tenure rights over indigenous land
2- Building capacities of local community
organizations/federations
3- Project benefits to be tied directly to carbon
sequestration instead of being delivered through traditional donor-sponsored approaches
4- Community involvement in monitoring of
surrounding forests
Community-
Based Carbon Monitoring
Projects
Public
forestlands
NA NA 1- Technological collaboration between scientists
and local community groups 2- Developing user-friendly/low-skill demanding
protocols and handheld instruments
3- Sustained training and motivation
4- Appropriate payments for monitoring and data
collection 5- Better options for scaling up to be explored
1- Involves communities directly in the
institutional structures for REDD+ 2- Works as a double motivation for forest
protection and measurement of the success of
forest protection and carbon sequestration
3- Savings in monitoring costs
4- Can be replicated with the help of regional scientific/civil society organizations, or with
assistance from existing forestry federations