131
• Degraded forest has a carbon stock of tC ie tCO on mineral and peat soil
• Timber extraction leads to a loss of tC ie tCO • No carbon loss from mineral soil is included
• Carbon in peat soil is lost at an annual rate of . thayr ie tCO . over yr period
4.7 A phased approach to achieving REDD targets
REDD payments are intended to support and provide incentives for effective long- term strategies to reduce deforestation and degradation. owever, REDD buyers
are willing to pay for actual reductions and may not be willing to pay much if anything for the mere promise of future reductions.
Nevertheless, sustained reduction in deforestation rates is unlikely without careful planning and good governance in the implementation of plans. Therefore, some
form of intermediate payments could be useful to: . reward the achievement of critical milestones intermediate results or
indicators of progress towards full implementation of plans; . facilitate further progress towards successive milestones; and
. finance future payments to encourage long-term investment and ensure sustainability.
Examples of milestones are the adoption of integrated spatial plans incorporating REDD targets; passage of REDD-friendly legislation, regulations, and budgets;
achievement of good governance standards and targets by local governments; and demonstrations of critical capacity to implement REDD programs on the part
of key institutions. f REDD payments come only after reduced deforestation rates are realized, then
intermediate financing to reward and facilitate strategic milestones could be provided in various ways. Among these are Go pre-financing to be recouped
eventually from REDD payments , donor funding, and private investment based on anticipated future returns from REDD payments. nvestments might be facilitated
by a REDD futures market or financed with REDD bonds issued by Go or district governments.
Trust funds and revenue-sharing between regions with high and low levels of current REDD payments could be used to even out year-to-year fluctuations in
deforestation rates and consequent payments. Trust funds might be built up from a portion of REDD payments together with other, local PES schemes in addition
to carbon payments.
]
Note that a REDD futures index and bond ratings would provide progress indicators and would reward good performance in advance of full implementation.
132
133
Forest Governance and the Implementation of REDD
5.1 Introduction
