This paper outlines the ideas and political debates that contributed to the December 2007 decision of parties to the Framework Convention on Climate Change to explore ways of reducing emissions from deforestation in developing countries, what is referred to here as ‘avoided deforestation’ (AD). Although the decision reflected international concern at anthropogenic climate change and deforestation (especially in the tropics), the concept of AD, and contemporary debates on this subject, need to be understood in a broader historical context. International political disagreements on the distribution of the world's natural, financial and technological resources and on global social inequalities are now enmeshed with international forest and climate politics. The paper discusses two variants of an international AD; carbon trading and ODA. It then explores some of the political controversies that are likely to arise when agreeing the fine details of an international mechanism for AD.

Rules governing the REDD (Reductions of Emissions from Deforestation and Degradation) scheme have yet to be established. Different national interests compete within the debate on baselines in order to maximize expected gains. The scheme could have a deleterious impact on the carbon market through massive hot air creation (fake emission reductions), and ultimately on the current international climate change regime derived from the cap-and-trade architecture adopted by the Kyoto Protocol. The political economy of avoided deforestation is frequently overlooked as is the issue of additionality, although both of them are more critical with deforestation at national level than they could be with project-based CDM. An alternative REDD architecture which relies on a special fund would not only allow protection of the carbon market against massive flooding by non additional credits, but could also help finance potentially efficient policies and measures. Sustaining long-term adequate funding is still an issue to be addressed on a multilateral basis.

The role of tropical deforestation in global climate change is a strong justification for its inclusion in the UN's global climate treaty. In order to successfully address deforestation and forest degradation in developing countries, a compensation scheme must include the main actors involved in deforestation and provide incentives for forest stewards who protect forest carbon stores. Since each tropical forest country represents a different mix of public and private tenure of forested land, policies at the UNFCCC level will need to be sufficiently flexible to allow countries to tailor REDD programs to reflect these differences. At the same time, Parties need to negotiate a basic REDD structure that can apply to all countries as a framework under which to build their national programs. We propose an approach that will incorporate the three main actors of deforestation and forest protection in tropical regions: government, private forest owners, and public forest stewards (including indigenous people and others). These funds and the activities supported by them are envisoned to function most effectively under a combined market and non-market approach.

The article reviews some of the critical issues for including Reduced Emissions from Deforestation and forest Degradation (REDD) into a new global climate agreement. Four different REDD models (regimes) are discussed based on two dimensions: scale (national vs. project) and funding (market vs. funds). One of the most troublesome issues concerns setting national baselines (= emission quotas). Research provides few definite answers on how to do this, yet it has huge implications for the possible payments to developing countries. The paper argues that the expectations about the magnitude of such transfers are unrealistically high, and may reduce the prospect for reaching an agreement and increase the chances for ‘hot air’ from the South.

The present article is a contribution to the international debate on the compensation mechanism for reducing emissions from deforestation and forest degradation in developing countries (REDD). Since its inception, the debate has constantly widened its scope to now cover deforestation, degradation and forest management. In order to avoid methodological complexities and inconsistencies in carbon reporting and accounting, the authors promote a unified accounting system that does not distinguish between industrialized and developing countries. Such a system has been created for Annex-I countries with the Kyoto Articles 3.3 and 3.4. It allowed for a stepwise implementation and recognized the need for capacity building and “learning-by-doing” for the first commitment period. If this system serves as a blueprint, the main difference will be that industrialized countries have overall targets, while developing countries would determine a sectoral reference level for land use emissions, against which emission reductions in the land use sector are to be measured. As developing countries take over wider climate commitments in the future, this will not affect reporting for land use uptakes and emissions. In order to develop a comprehensive system, article 3.3 and 3.4 need revision concerning the accounting modalities, i.e. Annex I countries would have to switch to net-net accounting. The way REDD has been conceived in Bali, it is restricted to developing countries' forest sector only. If this REDD mechanism were to be the future, it would create methodological hurdles and provide ammunition for opponents against enhanced responsibilities by developing countries within the climate regime.

The general reluctance of policy makers to include forests in discussions about global warming has changed with the development of measures to Reduce Emissions from Deforestation and Degradation (REDD). Mesoamerica presents a logical starting point to promote REDD due to the extent of its forest, and the relatively advanced state of its forest management institutions and policies. This paper reviews the prospects for REDD in Mesoamerica using PES and other instruments, with emphasis on the effectiveness of REDD measures at reducing emissions, and their efficiency and fairness. It concludes that in spite of reduced deforestation in the region, the growth of payments to avoid deforestation will be the most important policy change related to REDD in the region in the coming years. However, the magnitude and impact of any payments must not be exaggerated and should be set in context of the overall trends resulting from broader social and economic dynamics.

Reducing emissions from deforestation and degradation (REDD) is considered a significant mitigation opportunity. Forest loss in the Brazilian Amazon has traditionally been highest in the world and, thus, represents a likely target for future REDD initiatives. The paper presents an ex-ante assessment of the potential REDD costs in two of the three largest states in the Brazilian Amazon using official land use and cover change statistics. The two states, Mato Grosso and Amazonas, historically feature largely different land use dynamics. The findings focus on the opportunity costs of REDD and suggest that at least 1 million ha of projected deforestation in Mato Grosso and Amazonas could be compensated for at current carbon prices until 2017. Total costs may differ between US$ 330 million and over US$ 1 billion depending on how payment mechanisms are designed. Implications of payment scheme design for the political economy of REDD are discussed.

Developing countries are expected to contribute to climate change mitigation efforts by reducing deforestation, with financial compensations for associated economic losses. These losses are due to foregone revenues and limited economic development, all of these labeled “opportunity costs”. Their accurate estimation is strategic for at least two reasons: to determine fair compensations, and to prioritize low cost strategies to reduce emissions. However, numerous interpretations of the opportunity cost concept coexist in the literature and in influential reports (e.g. Stern review), with differing estimated values for similar cases. This paper presents a framework to better identify relevant values to the calculations: profits / total national economic value, conservation site / downstream industries. When applied to the pulp sector in Indonesia, the framework yields contrasted opportunity costs. This contrast is due to several factors, including the heterogeneity of the pulp industry, or the availability of non-forested lands to displace activities. These values range from zero to one thousand dollars per hectare per year. To use such a framework would help gain credibility and achieve fairness in negotiations between host countries and other stakeholders, in particular those who fund activities to reduce deforestation.

The impact of the international forests regime (IFR) in shaping national forest-related policies (FRPs) is often considered as one of the key indicators of its effectiveness. This study is based on a comparison of the evolution over the past three decades of FRPs and the IFR's impact in Brazil and Indonesia — the two top-ranking countries in deforestation figures — and draws two conclusions. First, far from acting as a mere source of resistance to the IFR, the domestic policy context determines both the extent and type of impact of the IFR on FRPs. Secondly, FRPs also influence the IFR, which contradicts the top-down vision put forward by attempts to evaluate the IFR's effectiveness. This suggests that instead of a hierarchical relationship, the link between the national and international spheres is a dynamic one where the IFR and FRPs mutually adjust to each other according to the specificities of policy networks at both levels.

For two generations, policy makers, environmental groups, industry associations and other stakeholders have given global forest deterioration concerted and sustained attention. Widespread disappointment over the failure to achieve a binding global forest convention at the 1992 Rio Earth Summit has been followed by frustration over the relatively limited impact to date of post-Rio forest-related global policy initiatives, including intergovernmental and non-state efforts. This paper argues that “reduced emissions from deforestation and forest degradation” (REDD) initiatives will yield significant impacts only if decision makers are committed to a results-based “dual effectiveness” test, addressing both forest degradation and global emissions reductions, and involving significant and measurable global-scale targets. While the importance of such a commitment may appear obvious, lessons from past forest and climate efforts suggest that greater results-based accountability is needed to overcome short-term and narrowly defined organizational and national self-interest.

Faced with the fragmentation and the weakness of international forest regimes, new forms of global governance have emerged over the last 15 years through the creation of private transnational certification institutions. By analyzing the political processes linked to the establishment of these institutions, this paper aims to question the scope and performance of a form of regulation based on private governance, but also to ask whether forest governance is truly being increasingly privatized, as is often claimed. Through a review of literature, a look at statistics and surveys conducted in Brazil, we identify the limitations of governing through the market. We go on to analyze the linkages between public policy and private governance, highlighting the correlation between the performative nature of certification institutions and the prior filling of a certain number of gaps in public policies, especially in countries possessing tropical forest resources.