Introduction Why Is Governance Important for REDD?

133 Forest Governance and the Implementation of REDD

5.1 Introduction

Governance is the method or system by which an institution is managed. n terms of contemporary approaches to government this includes the rules, processes and behavior that affect the way power is exercised. n this context governance is particularly concerned with openness, participation, accountability, effectiveness and coherence. Good governance is a necessary condition to enable sustainable forest management, including the formulation and implementation of consistent forestry policies and practices. Conversely, poor governance makes forest management problematic and contributes to failures of policy and performance that have failed to check high rates of deforestation and forest degradation. This chapter is concerned with the integrity and acountability of government and how transparency mechanisms enabling openness and participation foster outcomes which benefit the governed and provide a foundation for the REDD supply chain. 5.2 Why Is Governance Important for REDD? Good governance is important for REDD because the quality of the carbon units which the supply chain delivers will be influenced by buyers confidence in future performance. Even with poor forest governance, wood and other products can be extracted and sold, as shown by illegal logging. owever, selling credits for avoided deforestation requires reducing risk to ensure permanence, low leakage, and other conditions, which are less tangible and need to be taken on trust. Particularly in the preliminary stages of preparing for REDD, confidence- building measures will be important to attract political and financial support, and governance improvements will be among the most visible and important confidence-building measures. Later, as REDD is fully implemented and is expected to deliver a sustainable supply of avoided deforestation credits, further improvements in governance will help to maintain investor confidence, safeguard the value and integrity of REDD payments, and enable REDD strategies to perform as intended to reduce deforestation. Good governance will support REDD in three ways. t will help to: ] European Union, . 5 134 . Reduce deforestation by improving the effectiveness of government policies and institutions, including forest management agencies and law enforcement; . Create incentives for better forest management and remove perverse incentives that drive deforestation for private gain at the expense of the public good; . Safeguard REDD payments against corruption and elite capture by ensuring that payment mechanisms and the financial institutions that govern them are capable, accountable, and free from undue political influence. As a country which strives to implement good governance, ndonesia s successes will contribute to the quality of the carbon credits which it offers to the market and will assist it in gaining premium prices in relation to other countries whose record is not as strong.

5.3 Concepts: State of Knowledge and Best Practice