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Policy Paper: Assessing prerequisites for market-based REDD+ activities 3
1 Introduction
The rationale behind the envisaged mechanism to reduce emissions from deforestation and forest degradation
and to enhance forest carbon stocks in developing countries (REDD+) is simple: By giving forest carbon
stocks an additional monetary value, an incentive for the protection of forests is established, allowing developed
countries to support developing countries in protecting their forests. The details on the design of such a
mechanism are currently being discussed at UN-level, with the debate on how efforts in forest protection
should be financed remaining the most contested topic. A decision on whether financing should come from
carbon markets or if a fund-based approach would provide the capital for forest protection in the long-term
has not been taken yet and the 17 th Conference of the Parties at the end of 2011 in Durban postponed a final
decision on financing. 1
From the very beginning the question on financing has been linked to the question whether developing countries
are prepared enough for producing robust emission reductions. This debate has led to a number of important
proposals for the design of the mechanism at the international level. One highly recognized proposal
is the phased approach developed by the Meridian Institute for the Government of Norway (Angelsen et al.
2009). By taking into account the large differences between tropical forest countries regarding their preparedness
for participating in a future REDD+ mechanism, this approach combines fund-based and marketbased
design elements structuring them along three phases (cf. Figure 1)
Figure 1: The Phased Approach
Source: Adapted from Angelsen et al. (2009).
Phase one allows countries to access international funding for developing national REDD strategies for activities
such as institutional strengthening, developing of national strategies, and demonstration activities. In
phase two, a global fund would be installed to finance the implementation of Policies and Measures (PAMs)
developed in phase one. Continued support under this instrument would be dependent upon results, while
1 At the Durban conference Parties agreed to launch a work programme in 2012 to further analyse options for the mobilisation of finance. The results
of these activities will be considered by the Conference of the Parties at its eighteens session (UNFCCC 2012, Decision 2/CP.17 paras 127 to
131).
Nicolas Kreibich, Christof Arens and Wolfgang Sterk
Wuppertal Institute