The implications of carbon financing for pro-poor community forestry

The implications of carbon financing for pro-poor community forestry

Authors: Luttrell,C. ; Schreckenberg,K. ; Pe,L.
Produced by: Overseas Development Institute, London (2008)

This paper explores the implications of new financing mechanisms, carbon markets and increased investment in forestry for community forestry. The main focus of the discussion is on 'Reducing Emissions from Deforestation and Forest Degradation' (REDD).

The authors discuss the debate over who has the right to 'own' carbon, and how this controls the levels at which decisions are made. They highlight the fact that, although it is not yet clear at what level REDD will operate, it probably will involve a degree of centralised control. This has implications for pro-poor outcomes including; how carbon baselines and targets will be devolved to producers and the role played by governments. The document points out that the way in which benefits are targeted is a concern for the forest dependent poor.

Key concluding points include:

• carbon financing offers the potential for new forms of financing for community forestry
• the design and process of funding mechanisms need attention to ensure that new forms of financing maintain pro-poor outcomes of community forestry
• clarification of the legal and ownership status of carbon is important to ensure security of contracts and accurate prediction of returns
• transaction costs of carbon forestry are likely to be high; therefore matching of benefits to the transaction costs and operational requirements is advisable.
  

Available online at: http://w ww. eldis. org/cf/rdr/?doc=35593