Market mechanisms for financing the reduction of emissions from deforestation and degradation in developing countries (REDD) – learning from payments for ecosystem services schemes

摘要

At its 16th session in Cancun, the Conference of Parties of the United Nations Framework Convention on Climate Change decided on a framework for implementing the reduction of deforestation and degradation (REDD). This global compensation mechanism for the ecosystem services, such as carbon storage and sequestration by forests in the developing countries, however, left critical details untouched regarding future REDD negotiations. Among others, the question of how to design a proper financing mechanism for the final phase of REDD implementation remains. This article reviews theoretical approaches on payments for ecosystem service schemes and provides recommendations for future negotiations on funding REDD mechanisms. Of special interest is the classification of forest ecosystem services according to physical and economic characteristics, rivalry and excludability, scale and directional flow. These characteristics help to determine which kind of funding mechanism should be set up at the global scale. Carbon storage and carbon sequestration are classified as common-pool services, which are most efficiently provided through a market mechanism. However, market mechanisms for small sets of forest ecosystem services can lead to trade-offs, having negative effects on the provision of particularly biodiversity-dependent services. Potential trade-offs are identified and a strongly regulated market mechanism bundling global scale ecosystem services is recommended.