Trees don't grow on money: REDD

Editorial in Jakarta Post by Agus P. Sari, Country Director of Ecosecurities: Reducing Emissions from Deforestation and Degradation (REDD) remains a controversial issue that is gaining unparalleled attention during the Bali climate change conference. REDD could potentially benefit Indonesia, economically and environmentally. …

First, will REDD benefit corporations? Yes and no. Of course, the fact that at the international level REDD provides incentives to the worst deforesting countries – the so-called perverse incentive -- remains the problem in which the current climate change regime is inherently trapped. But sub-nationally, the largest beneficiaries are the "conservationists"….

Second, will REDD actually reduce deforestation? It has to. But it may not succeed if the underlying causes of deforestation are not adequately addressed. A reduction of deforestation in one area may lead to increased deforestation somewhere else (this effect is called "leakage" in the REDD lingo). As a result, the total rate of deforestation in Indonesia will not be reduced. But if this is the case, Indonesia cannot gain the incentives.

The risk of non-performance, which is the risk of deforestation not being stopped or reduced, is high. And this is likely to stem from inadequately addressing the underlying causes of deforestation: corruption/bad governance, tenurial security, fires and illegal logging, to name just a few. Among the prerequisites for a successful REDD is good governance. ..

Third, will the market mechanism -- the carbon market -- be the only possible way to provide incentives for REDD? Of course not. It can also be provided by Funds (which is argued mainly by the Brazilian negotiators in the Bali Climate Conference). And we may not need to choose one only, as we can use both as appropriate. Moreover, the market mechanism puts developing and industrialized countries on the same trading level. Funds are largely replenished by "good will" from the industrialized countries, and are largely unpredictable despite the repeated call to contribute 0.7 percent of industrialized countries' incomes in development aid.

Finally, will REDD entice palm oil or pulp and paper companies to stop opening new plantations for conservation? Maybe not. Palm oil is very profitable, and so are paper plantations. But it may be able to entice illegal loggers, one of the causes of forest fires or deforestation. REDD programs may provide better alternatives that offer sustainable livelihoods to those who would otherwise be involved in illegal logging (since the weakest link in the illegal logging chain may be local communities that have no alternative livelihoods to logging illegally).

REDD is full of risks. But without good governance, deforestation will not be reduced. And hence money will not flow in. Money doesn't grow on trees and trees don't grow on money either.