In 2006, the former Chief Economist at the World Bank, Sir Nicholas Stern, published the influential Stern Review on the Economics of Climate Change. The report emphasises the important role of forests in mitigating climate change and declares reducing deforestation to be a 'low hanging fruit' – an extremely quick and inexpensive way of cutting emissions. He is referring to a market-based approach developed in the context of the UN climate negotiations and known since 2005 by the abbreviation REDD, which stands for Reducing Emissions from Deforestation and Forest Degradation.
The key assumption behind the concept of REDD is that in order to be preserved, forests must be of greater value standing than logged. Carbon dioxide is supposed to be the economic lever to keep forests standing. The idea is that if deforestation is prevented, carbon remains stored in the trees. Calculating the number of trees that would have been cut without a REDD-payment allows calculation of how many tonnes of carbon dioxide are not released into the atmosphere as a result of the REDD project. On the basis of this value, forest owners can be compensated for the avoided deforestation – and hence for the avoided release of carbon dioxide. Thus REDD is regarded as a market-driven environmental policy.
The spectrum of forest-related activities linked to the REDD concept has been expanded in the course of the debate. Forest conservation measures, sustainable forest management (i.e. industrial logging) and afforestation are now also eligible for REDD+ payments. REDD+ also increasingly involves reductions of emissions linked to peasant farming and agriculture. It is these additions that the 'plus' refers to in the now common expression 'REDD+'.
Logging and conversion of the cleared land for industrial agriculture are more economically profitable than payments from REDD+
After 12 years' experience with REDD+ we know that the equation "REDD payment for avoided release of CO2 is greater than the profits from forest conversion to agriculture" is not working: deforestation and using the cleared land for industrial agriculture is almost always more profitable than REDD payments for carbon storage in the forest. This is particularly true of the profits that can be made from the main drivers of deforestation in the global South – raising cattle, growing soy or planting oil palms in large-scale monoculture. The economic incentives offered by REDD+ have also been unable to halt the mining of coal or gemstones. Also, illegal logging is rife – it is estimated that in Indonesia, 80 per cent of deforestation for industrial agriculture and expansion of oil palm plantations is illegal. REDD+ has no impact on these situations.
Research by the well-known policy and research organisation CIFOR, which supports REDD+, confirms this reality. CIFOR writes: "For anyone to benefit, REDD+ must generate income in the first place, and the REDD+ revenue stream originally envisioned through trading carbon credits on carbon markets has fallen short of targets [...]. If you think of REDD+ as a bidding process in an auction, where those who make the highest bid can control forest land use, the bid offered by big agricultural companies often outcompetes what can be offered by REDD+."
The assumption that payments for carbon storage in forests can exceed the profits made from deforestation and the conversion of land to industrial agricultural production for export has turned out to be an illusion. Profits from the sale of carbon credits and REDD+ payments from public funds are not nearly as high as the profit margins from growing soy or oil palms in industrial plantations. That is the case even before considering that REDD+ calculations are often criticised for 'over-exaggerating' the volume of supposedly avoided emissions. This happens because REDD+ projects calculate the quantity of supposedly avoided emissions by comparison with a prediction of the hypothetical emissions that would have been released had the REDD+ project not taken place. The greater the amount of deforestation predicted in this hypothetical - ultimately unverifiable - future without the REDD+ project, the higher the supposedly avoided emissions from deforestation for which the REDD+ project can sell carbon credits.
REDD+ cannot provide the necessary incentives
Many of the supporters of REDD+ regard REDD in its original form as a failure. For example, CIFOR explains that if REDD is regarded as a mechanism for relevant results-based financing by developed countries for developing countries, then it has failed. However, this failure did not result in abandonment of the REDD approach. Instead, from about 2010, the concept was reformulated: the original idea of creating economic incentives to ensure that conserving forests is more profitable than cutting them down was abandoned. Instead, REDD is now said to be the instrument of choice to halt deforestation by tackling the drivers of deforestation. The goal of compensating foregone profit if the forest was preserved has been replaced by the new goal of using REDD+ to tackle the causes of deforestation.
However, the following years have shown that REDD+ is not any better at tackling the drivers of deforestation. Because the main drivers of large-scale deforestation are forest clearing for industrial farming and illegal logging. The experience with REDD+'s original goals had already demonstrated that financial incentives for carbon storage cannot stem these causes of deforestation.
REDD+ creates new conflicts
REDD+ 'solved' this contradiction by targeting measures increasingly at indigenous peoples, local communities, peasant farming and other forms of extensive land use instead of those responsible for large-scale deforestation. A particularly large number of REDD+ projects and programmes seek to restrict shifting cultivation and peasant agriculture in forests, which are falsely branded as drivers of deforestation. "It is a bitter irony that this results in a focus on the very groups that have contributed least to deforestation," one paper sums up the situation.
Many publications now show that REDD+ not only ignores the real drivers of large-scale deforestation but often triggers or amplifies local conflict. Conflict over land rights and access to the forest as results of REDD+ projects and programmes occurs particularly frequently. This is due to the design of REDD+: to receive REDD+ payments, a forest owner must provide evidence of a change in land use that has led to avoidance of planned deforestation. Without such avoidance of supposedly planned deforestation, it is not possible to receive REDD+ payments. In areas where ownership of the forest and use rights of the forest that has been designated to a REDD+ project are disputed, conflict is inevitable. The situation becomes even more problematic when those, whose use of the forest is restricted as a result of the REDD+ activity, are not the recipients of the REDD+ payment. It means that the people who are actually affected by land use restrictions and loss of income due to REDD+ come away from the distribution of the supposed 'benefits' empty-handed. In many cases, REDD+ projects also weaken collective land rights and customary land use regimes, and thus create even greater uncertainty for traditional communities and indigenous peoples. "That indigenous peoples and local communities nevertheless take part in REDD projects is due to the immense financial expectations that REDD has aroused, the lack of alternatives and often misleading information and manipulation. Because of these expectations, REDD has already achieved a predictable result: it has divided indigenous organisations", the Berlin-based organisation FDCL writes in a report on REDD+.
This article is part of our dossier "New Economy of Nature".
 "Yet for anyone to benefit, REDD+ must generate income in the first place, and the REDD+ revenue stream originally envisioned through trading carbon credits on carbon markets has fallen short of targets. ‘If you think of REDD+ as a bidding process in an auction, where those who make the highest bid can control forest land use, the bid offered by big agricultural companies often outcompetes what can be offered by REDD+,’". From: Forrest News: "Global study: REDD+ initiatives see challenges — and opportunities", April 14, 2014.
 CEPR Press (Centre for Economic Policy Research) and Ferdi (Fondation pour les études et recherches sur le développement international): "Towards a Workable and Effective Climate Regime", Edited by Scott Barrett, Carlo Carraro and Jaime de Melo, 2015.
 World Rainforest Movement: REDD: A Collection of Conflicts, Contradictions and Lies, February 2015, page 12.