Policy Brief Addresses Potential Incentive Payments for REDD Implementation

Reducing greenhouse gas emissions from deforestation and forest degradation has established itself as an important option in the policy toolkit for mitigating climate change. In the process, the debate has shifted from whether to pursue the reduction of emissions from deforestation and forest degradation (REDD) to how to implement it, and the challenges involved. This policy brief refines the stock-flow approach submitted jointly by the Woods Hole Research Center (WHRC) and by the Amazon Institute for Environmental Research (IPAM) to the UNFCCC in August 2008 on how to distribute across countries the potential incentive payments to reduce emissions from deforestation and forest degradation (REDD). We provide an overview of the stock-flow approach, extend it using targets, and then present simulation results on how it performs in terms of environmental effectiveness, economic efficiency, and equity of REDD payments relative to opportunity costs of participation. Results are then compared to other REDD mechanisms being proposed.

A “Stock Flow with Targets” Mechanism for Distributing Incentive Payments to Reduce Emissions from Deforestation - June, 2009