National REDD+ outcompetes gold and logging: The potential of cleaning profit chains. (June 2019)

• Record Type: Journal Article
• Authors: Overman, Han; Cummings, Anthony R.; Luzar, Jeffrey B.; Fragoso, Jose M.V.
• Is Part Of: World development. Volume 118(2019)
• Page Start: 16
• Page End: 26
• Publication Date: 2019-06
• Subjects: REDD+ economic competitiveness -- Forest commodities -- Private state revenue ratios -- Land grabbing -- Equity -- Forest governance change; Economic history -- 1990- -- Periodicals; Economic assistance -- Developing countries -- Periodicals; 330.9
• DOI: 10.1016/j.worlddev.2019.02.010
• Languages: English
• ISSNs: 0305-750X

Abstract

Graphical abstract: Highlights: Guyana's UN-approved FREL submission shows 'national REDD+' is competitive on a hectare basis, and does not incentivize land grabbing. REDD+ costs surpass state yields of gold and logging at a US$5 carbon price, revealing severely lopsided private–public net revenue ratios. Interventions have strong potential for state budget, REDD+, rural development, indigenous rights, and conservation, without job loss. National society awareness of forest commodity finance and options can aid motivation for forest governance change in sovereign countries. Abstract: Prominent recent evaluations of global research on REDD+ progress (Reducing Emissions from Deforestation and forest Degradation) conclude that 'progress has been slower than expected', 'deforestation and degradation are deeply-rooted in powerful business-as-usual interests' and that '[f]or the most part, new coalitions calling for change in forest governance have failed to overcome business-as-usual deforestation.' Others have earlier pointed out that REDD+ will incentivize land grabbing (potentially endangering customary use rights of forest-dependent citizens), and will remain financially uncompetitive against current commercial forest uses. Combining nationwide data over a decade from Guyana's United Nations-approved Forest Reference Emission Level (FREL) submission and national documents, we found that REDD+ implemented at national level would annually add almost a quarter to the country's budget, and should not incentivize land grabbing as it places little direct value on forest, but financial penalties (lost income) on forest damage. We show quantitatively that national REDD+ in Guyana is competitive on a hectare basis when viewed from the resource owner's perspective, even against high value commodities such as gold and timber (the country's main emission drivers), and at a preliminary US$5 carbon price. Hidden by the latter appears a very lopsided distribution of overall net revenue between the state and private sector commodity chains (∼1:99 and ∼1:1200). We show government or electorate pressure towards more equitable distribution, or 'cleaning profit chains', would both be justified and highly worthwhile, without job loss. Investing part of this homegrown finance in further securing lawful and rational management of exhaustible forest-based resources has several additional economic, social and environmental benefits, including for forest-dependent citizens. Society awareness of current revenue ratios, REDD+ income losses, and potential returns of interventions may add helpful (i.e. economic, domestic) motivation for forest governance change in sovereign countries. Weak law enforcement, prevailing across the tropics, enhances lopsided sharing, and linked political leverage could undermine plans that would interfere with private income streams, e.g. rural social development, tenure, forest/biodiversity conservation. Interventions may therefore additionally enhance these sectors' performances. Assessing and cleaning private profit chains may more generally have potential for REDD+ and global climate change mitigation goals, along with its many associated social and environmental co-benefits.