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Policy Paper: Assessing prerequisites for market-based REDD+ activities 26
3.3.5 LEEE implications
Policy readiness of REDD+ countries has important implications for all four LEEE elements. The identification
of drivers of deforestation is not only a prerequisite for an effective and efficient tackling of forest destruction
but has also serious repercussions on legitimacy and equity. Overestimating particular drivers while
neglecting others will not only result in misallocation of funds but may also undermine overall legitimacy of
the policies. Furthermore, REDD+ can only be implemented in an equitable way if the policies also address
the underlying causes of deforestation and not just its agents. This is particularly relevant when dealing with
subsistence farmers practicing shifting cultivation and other forest-dependent peoples, who need viable alternatives
to the extensive exploitation of forest resources.
The choice of the right forestry policy approach also has different repercussion on the efficiency, effectiveness,
equity and legitimacy of the national REDD+ structure. While a national PES system is often expected
to deliver the most effective results due to its market-based approach, the diversity of individual opportunity
costs may lead to over- and underpayments of participants, drastically reducing its effectiveness. Geographical
differentiation of payments and the combination with community forest management may mitigate these
risks. Due to their limited size, forest concessions will generally have only a reduced carbon impact, particularly
in the long run. Such an approach may further be problematic with regards to equity in cases where the
activities affect forest dependent communities living in the area, making safeguarding principles particularly
relevant. In the short run, however, conservation projects can lead to more efficient results provided that land
ownership of the respective area is clarified and undisputed (Costenbader 2011). Systems based on community
forest management can be expected to deliver efficient results, especially if combined with community
forest monitoring. The legitimacy of such an approach may also be larger since acceptance of activities
among individuals may be higher if promoted with the assistance of the local authorities. With any of these
three approaches discussed the government will have to ensure that the system is designed in such a way that
participation of those who need the revenues most urgently is safeguarded. Furthermore, aligning the
REDD+ strategy with other low carbon development plans can further increase effectiveness of the activities.
The question on the appropriate forestry policy approach is strongly linked to the choice of a system for
channelling the international funds. As this brief overview showed, every single financial design option
has its advantages and shortcomings with regard to effectiveness, efficiency, equity and legitimacy. These
shortcomings should be carefully assessed taking into consideration the national circumstances. Furthermore,
it should be noted that options are not mutually exclusive and a combination of systems might represent the
best solution. In any case, REDD+ countries will need to identify the architecture best suiting its national
conditions. It has to be further kept in mind that developments at the international level will influence and
potentially limit the options countries have when designing their national funding system.
Nicolas Kreibich, Christof Arens and Wolfgang Sterk
Wuppertal Institute