The Center for International Forestry Research (CIFOR) today released a comprehensive analysis clarifying major challenges and offering an assortment of options that could help negotiators reach a global agreement on reducing carbon emissions tied to forest destruction and degradation.

The report, Moving ahead with REDD: Issues, options and implications, is set to be released as officials from around the world have gathered here under the auspices of the UN Framework Convention on Climate Change (UNFCCC). Negotiators are seeking to outline a new global agreement for reducing greenhouse gases, which will set the stage for final decisions scheduled for 2009 in Copenhagen.

Central to the process is the effort aimed at reducing emissions from deforestation and forest degradation, or REDD, which will involve financial incentives and compensation for developing countries to conserve their forests. The idea is that REDD will enable forest conservation to compete financially with the economic drivers of deforestation and forest degradation, which currently favor destructive logging practices and conversion of forest land to other uses, such as cattle pasture and plantation crops.

Estimates suggest that forest loss and degradation account for up to one fifth of the annual global greenhouse gases attributed to human activity, and calculations indicate that REDD will be more cost-effective than most climate mitigation measures. The CIFOR report suggests that integrating REDD with tighter overall emissions targets will enable negotiators to deliver a more ambitious global climate strategy for little or no extra cost.

But there are a range of complex issues facing the talks, such as: the appropriate scale for implementing REDD projects; how to incorporate forest degradation (as opposed to simply deforestation) as part of the agreement; whether or not technology is sufficiently advanced to measure and monitor forest-based carbon; how to guarantee that forests conserved for carbon are not subsequently lost; and how to ensure that the rights of forest-dwelling communities are recognized and respected.

"Our analysis allows negotiators to see that while the REDD process is indeed complicated, there is a clear set of options available for the issues under discussion," said Frances Seymour, CIFOR's Director General. "And each option usually involves some trade-offs related to effectiveness, efficiency and equity. These talks are too important to fail, but given the solutions available, there is ample opportunity for success".

"Many are concerned that the global financial crisis will not only undermine industrialized countries' commitments to reduce emissions – which are essential to the overall objective -- but also their willingness to pay for carbon offset initiatives in developing countries," said Seymour. "The willingness to play on the part of developing countries will depend on the perceived fairness and accessibility of these schemes."

The CIFOR report examines a wide range of issues related to the design of REDD, including the ongoing debate over the appropriate geographical scale of such initiatives. Overall, most countries are favoring implementation of REDD at a national level, arguing that, among other things, it would deter what is known as "carbon leakage." Carbon leakage occurs when a reduction in forest emissions achieved in one area simply prompts the deforestation or degradation activities to shift to another area.

"A national approach would account for all domestic leakage, and governments would be stimulated to use a broad set of policies to reduce forest emissions," said Arild Angelsen, CIFOR scientist and Professor at the Norwegian University of Life Sciences. "But, focusing strictly on this option means that, in the near-term at least, REDD programs would be feasible for only a few middle-income countries, and also carries high risk of governance failures and 'nationalization' of carbon rights – leaving less for local communities. On the other hand, a sub-national or project approach allows for early involvement and wide participation and is attractive to private investors." Angelsen, who edited the report, which includes contributions from 20 scientists, favors a "nested approach", where countries can commence initiatives at the sub-national level, and transfer to national level accounting within a certain time period.

"Negotiators also need to establish clear and appropriate reference levels – or baselines – from which to measure emission reductions," added Angelsen. "They have to balance the risk of paying for credits that do not truly reduce emissions if baselines are too generous; and low participation and rejection by developing countries if baselines are set too tight. There is potential for this issue to become a real stumbling block to achieving an effective agreement."

The report also looks at the inclusion of forest degradation in the design of any REDD scheme. Degradation can occur from activities such as logging, livestock grazing, and firewood gathering. CIFOR notes that countries where deforestation is the main concern may have little interest in investing in the monitoring necessary to measure carbon released through forest degradation. On the other hand, incentives to reduce degradation could be appealing to countries in the Congo Basin, where there are large areas of forest cover but low deforestation rates.

"If you incorporate forest degradation into the REDD mechanism, it might be more difficult to implement but it would more effectively account for forest-related carbon emissions," said Daniel Murdiyarso, CIFOR scientist and member of the Intergovernmental Panel on Climate Change (IPCC). "It also would be more equitable because it would encourage many more developing countries—for which degradation is the main culprit—to participate."

Other issues addressed by the CIFOR report include:

How to monitor and verify carbon emissions from what are often remote forested regions. CIFOR asserts that the technology is now available to effectively and efficiently monitor carbon in forested regions, although there still are trade-offs between precision and costs. However, according to the report most issues related to monitoring are political rather than technical, and the talks in Poland should focus on establishing a strong and independent verification system to ensure that emission reductions are real.

How to pay for REDD programs. The CIFOR report notes that public financing will likely be needed to help developing countries, particularly the very poor countries, participate in programs for reducing emissions from forests. Lucrative funding from carbon markets is being projected for such schemes, and access to the fast growing international carbon markets are needed to mobilize the amounts needed to tap into the full potential of REDD. But CIFOR cautions that in tropical forests, land-tenure conflicts and law enforcement issues that pre-date the REDD talks will need to be clarified if there is to be equitable participation in market-based mechanisms.

How to ensure that reductions in emissions are permanent. One of the primary concerns for investors in REDD is the fact that terrestrial carbon stored in forests can at any time be released into the atmosphere if there is a natural disaster or if a landowner decides to convert the land to non-forest uses. The report asserts that such risks can be addressed, but will require clear allocation of liability, strong regulation and start-up incentives.

"Our purpose is not to push one position over another, but to ensure that everyone is aware of all the options available and the implications of various choices," said Angelsen. "Overall, people are beginning to realize that when it comes to REDD, there is unlikely to be any 'one size fits all' solution. The best way to design and implement a global REDD regime may be a flexible approach that allows countries to proceed with several different models simultaneously, which evolve over time depending on what works best for a particular set of circumstances."

"REDD also has the potential to achieve significant co-benefits, over and above reducing carbon emissions," added Seymour. "These include alleviating poverty, improving governance, and protecting biodiversity and other environmental services. But a careful balance is needed: On the one hand, REDD should be designed to capture these co-benefits, and must include safeguards to ensure that it does no harm. On the other hand, if REDD is overloaded with technical requirements and legitimate non-climate considerations, the transaction costs of participation could be too high."

"In any case, for REDD to be successful, it will require the cooperation of the local people who are best positioned to exercise stewardship over the forest to be protected. They must be part of the process if REDD is to succeed."

The report will be officially launched at a media conference at the UNFCCC 14th Conference of the Parties, in Poznan, Poland, on Friday 5th December at 10:30am. It will be released in conjunction with a second report, Facing an Uncertain Future: How Forests and People can Adapt to Climate Change, which looks at the need for negotiators to sufficiently consider the role of forests in climate change adaptation strategies, as well as in mitigation.