Rich countries must guard against corruption

Oct 21, 2009 News

…if they pay for standing forests

By Neil Marks
in Argentina

Research into existing schemes that provide payment for environmental services shows that little goes into the pockets of families. Researchers say there is a need for safeguards against corruption if global climate talks in Copenhagen agree to pay countries like Guyana for keeping forests standing.
Guyana is currently finalising a Low Carbon Development Strategy which it says it will implement if rich countries, come December, decide to pay for activities to reduce emissions from deforestation and degradation (REDD) as well as conservation and sustainable forest management, or what is called REDD Plus.
Guyana has pledged to keep its rainforest – the size of England – standing if it could get the money. How much? The US$580 million it says could come from utilising the forests for logging, mining, agriculture, and other economic activities.
Payment for REDD is by no means a done deal, and there is still even a struggle to define “forests” and the last “D” in REDD, that is, forest “degradation.”
But what if there is a REDD scheme decided on at the Copenhagen climate talks in less than two months? What do existing schemes that provide payment for environmental services show?
Dr Luca Taconni, of the Crawford School of Economics and Government at the Australian National University, and his colleagues have released the findings of a study he conducted with others that show that such schemes have contributed only in a “minor” way to total household income.
As a result, he said there is need to design REDD activities that work with communities to increase the flow of benefits to them and improve community infrastructure. But the findings also reveal that the funds that flow provided financial capital to households, enabling them to pay off debts or improve their homes.
Further, Taconni, speaking on Monday at the World Forestry Congress in Buenos Aires, said there is need for a clear indication of how the payments will flow, whether to communities or individuals, and whether in cash or not.
But there is a major issue at hand—corruption— and the way the money will be managed. Taconni said that this is a major challenge and national plans will have to possibly include the establishment of a national fund to manage the resources.
He said that the flow of funds and spending will have to be made public and fully audited and reported on. Taconni will detail the challenge in managing the money and preventing corruption in a book that is to be released at the climate talks in Copenhagen.
But there are other problems he identified that could come with incentive payments for REDD, as found in the research conducted in countries in all regions of the world, including neighbouring Brazil.
Taconni said that there is need to assess the opportunity cost and transaction costs of REDD activities, and to at least provide matching benefits to communities. The study has shown that the money communities get for keeping conserving the forests is less than they would have received if the forests were to be used for economic activities, such as if they would clear the forest to expand agriculture.
Also, Taconni and his team have found that in the existing schemes that provide payment for environmental services is not released in a timely manner, thus creating problems for communities.
Paying rural people to participate in the protection of forest resources and for the benefits they give up by not clearing the forest could be a way to ensure they benefit from REDD activities and to increase the likelihood that REDD activities will succeed, Taconni and his team suggest.
Also, the research has shown the existing schemes that provide payment for environmental services has not appropriately monitored their impacts on the environmental services they sought to protect.
Any potential REDD scheme would therefore require a mechanism to address this, or what is called Monitoring, Reporting and Verifying, MRV, Taconni suggested.

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