Find out more about the international plan to allow countries and companies to offset their carbon emissions by paying poorer nations to preserve their forests

What is Redd?

It's a way of paying poor countries to protect their forests. Global deforestation accounts for nearly 20% of all CO2 emissions and all previous attempts to curb it have failed. Redd — "Reducing Emissions from Deforestation and Degradation" would allow countries that can reduce emissions from deforestation to be paid for doing so.

Where did the idea come from?

Papua New Guinea along with nine other countries proposed it in 2005 at a UN climate meeting. It has gained ground and is now likely to be one of the cornerstones of any agreement at the Copenhagen climate conference in December. It would not start until 2013, and could eventually channel tens of billions of dollars a year from rich to poor countries.

How would it work?

Countries would have to show, from historical data, satellite imagery and through direct measurement of trees, the extent, condition and the carbon content of their forests. Verification, reporting and monitoring would be done by communities which depend on the forests or by independent organisations.

Who pays?

There are several proposals. Countries could either be paid by "voluntary funding" — rather like existing official aid given by one country to another, or cash could be linked to carbon markets. One plan is for an international auction of emissions allowances and another proposes to issue Redd credits which would be tradable alongside existing certified emissions reductions (CERs). Companies and governments unable to meet their obligations to reduce emissions would then buy them at the international market price. Payment for performance.

Which is best?

Each of these three mechanisms has its strengths and weaknesses. A growing consensus is emerging that a combination will be needed to match the different stages of development and differing needs of tropical rainforest nations. Phase I could be funded by new and additional voluntary contributions from developed countries; phase II would use a hybrid or market-linked mechanism; and phase III could be funded through the carbon market. Countries would only be paid if they can prove "monitorable, reportable and verifiable" emissions reductions

Does everyone agree?

No. There are 32 Redd proposals, from countries, groups of countries and NGOs. The three gaining most ground are from Brazil, which wants a giant voluntary fund into which developed countries would provide new money. Most rich countries propose a combination of market and fund-based mechanisms. And the Coalition of Rainforest Nations (Belize, Democratic Republic of Congo, Ecuador, Ghana, Guyana, and Kenya, etc) propose using all three methods of payment.

Progress?

There is agreement that only developing countries can participate in Redd and that it should be on a voluntary basis only. Countries are beginning to accept that it should eventually include "carbon enhancement" (for example tree planting, conservation) schemes. This is known as Redd plus.

What about Prince Charles?

The Prince's Rainforests Project (PRP) has developed a proposal for an emergency financing package for tropical forests. Its goal is to achieve a significant reduction in tropical deforestation in the near-term by making annual payments to rainforest nations to help them embark on alternative, low-carbon development paths. It would be funded by an innovative public-private partnership in developed countries, which could include the issuing of Rainforest Bonds.

Who stands to gain?

In theory, the benefits are immense for everyone. Poor communities could be paid for the first time to protect the forests they depend on. Many new jobs would be created. It could stimulate community forest management, and eco-tourism. Protecting the forest would lead to better erosion control, water quality and biodiversity.

What are the problems?

How do you measure the carbon in a forest? There is no accurate data on most of the world's forested areas and so far no one agreed way to accurately measure the carbon content of vast numbers of different species of trees in different kinds of forests. Most forested countries also do not have the money to measure and assess their forests.

What about people in the forests?

Tens of millions of people live in and many more depend on the world's forests for a living. Most are traditionally marginalised or ignored by central governments. But their lifestyles could be drastically affected if governments or carbon companies move in, valuing the forests more highly than them. There are fears of land grabs and forced evictions.

Who owns the carbon?

Land ownership is highly disputed in most forested countries. Governments would have to pass new laws to refine who owns the carbon credits. Land in some countries is owned by the communities but trees may belong to the state. Does tree ownership confer carbon rights? How do you make sure that communities who protect the forests are rewarded, rather than say logging or mining companies who often have the legal rights on trees?

What about corruption?

Friends of the Earth International has argued that the current Redd proposals are open to abuse by corrupt politicians or illegal logging companies. Many heavily forested countries are some of the most corrupt in the world and are home to some notorious logging companies close to politicians. Policing forests is nearly impossible, and money is likely to be diverted by people in power. The likelihood of international money getting to the people who depend on the forests is unlikely. Governments can overstate the case that their forests are in danger.

What if the carbon market fails?

The market price of carbon could collapse if too many Redd credits flooded onto the market. With no financial incentive to protect the trees, people would revert to logging.