Can Money Grow On Trees?

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1st November 2010, 03:01am - Views: 1553

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media release

Australian Council for International Development

Embargoed until 1200am 1/11/2010


Can Money Grow on Trees?

Reducing Emissions from Deforestation (REDD)

A new report by the Australian Council for International Development (ACFID) and the Australia

Institute warns that future carbon offsetting schemes which involve forests and land use in

developing countries carry significant risks for Australian investment. These must be overcome if

REDD’s potential is to be achieved.

Such schemes, known as ‘REDD’, involve compensating developing countries that reduce

carbon emissions from deforestation and land degradation. Australia is angling to purchase

carbon offsets in countries like PNG and Indonesia in a future carbon market.

Can money grow on trees? Reducing emissions from deforestation and degradation (REDD) in

developing countries, authored by the Australian National University’s Associate Director at the

Centre for Climate Law and Policy, Andrew Macintosh, identifies a number of challenges

associated with possible future REDD schemes. 

“We need to beware of carbon traders bearing gifts,” said Marc Purcell, Executive Director of


“A worst case scenario is that REDD schemes become unaccountable and bring no financial

benefits to poor communities, with revenues going into the pockets of dodgy companies or

dubious officials.

“There is a risk that Australian companies could be fooled into thinking they are being green

buying REDD offsets on a future carbon market, when a lack of transparency and poor forest

management may mean that carbon emissions are really leaking from forests into the



“If money is really to grow on trees as some hope, and REDD schemes are to benefit

communities, they must have sound governance, ensuring real reductions on the global carbon

footprint and the maintenance of local communities’ rights,” he said.

Author Andrew Macintosh explained that REDD schemes offer hope that if developing countries

reduce their deforestation, carbon emissions will be reduced overall. The schemes also promise

massive revenues from wealthy countries flowing to developing countries in return.

“Deforestation and changes in land use are currently responsible for up to 12% of the world’s

carbon emissions,” Dr Macintosh said.

“Well-designed REDD schemes can help reduce poverty, protect biodiversity and promote more

sustainable futures in developing countries. However, we need to make sure that REDD

schemes are designed to reduce their possible negative side-effects.” 

Australia is a leader in working in developing countries such as Indonesia and PNG to pilot REDD

schemes through its aid program. As we and other nations prepare for the next UN Climate

Change meeting in Mexico in November, ACFID is calling for solutions to climate change to be

based on a sustainable development framework.    

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Media Contact: 

Joy Kyriacou

0412 084 782 

For a full copy of the report go to

Key Findings on Development Issues – Can Money Grow on Trees?

1. REDD schemes should not exacerbate poverty and should equitably distribute benefits to

vulnerable communities: Australia should support participating developing countries to ensure that the

poorest communities in these countries are not negatively affected by any REDD scheme. This could include

by requiring appropriate consultation with affected communities, appropriate devolution of revenues, access

to resulting employment opportunities and fair compensation for any foregone benefits at the local level.

2. The rights of local communities must be supported by social safeguards: Australia should ensure

that a REDD scheme does not threaten the rights and interests of Indigenous peoples and local communities

in developing countries. Furthermore, appropriate social safeguards need to be put in place to ensure local

rights and interests are given appropriate consideration and protection in international and domestic decision-

making processes.

3. REDD must be supported by capacity-building activities financed by developed countries: Any

REDD scheme must be supported by a continuing Australian commitment to long-term capacity building for

REDD in participating developing countries and to greater adaptation financing made over and above current

aid projections. Such funding should not result in the reduction or redistribution of funds from existing poverty

reduction programs.

4. Weak governance arrangements present a significant barrier to a successful international REDD

system: Australia should address the significant governance risks associated with any international REDD

scheme, including corruption and the misappropriation of REDD revenues. This is particularly pertinent

considering the difficulties associated with monitoring land use and the lack of capacity to enforce property

and land-use laws and support landholders and others to address REDD in those countries.

5. An effective international REDD scheme requires participating developing countries to have the

systems in place to ensure real emission reductions: Australia should ensure that the basic operational

requirements for an effective REDD system are established in participating developing countries to ensure

legitimacy and environmental integrity, particularly given the barriers to real emission reductions including the

lack of reliable, accurate and transparent forest monitoring systems.

6. A REDD system must rely on an accurate and transparent system for setting emissions baselines

and measuring forest carbon emissions: Australia’s support for an international market-based REDD

scheme should be conditional on the establishment of an accurate and transparent mechanism for setting

emissions baselines and measuring forest carbon emissions.

7. The establishment of an international REDD scheme will take time and require continued

investment in the conception phase to ensure effectiveness: Australia should continue to invest in

base-level capacity building and trial and demonstration of REDD projects to ensure any scheme it supports

is well designed and administrated to mitigate potential adverse impacts. Political and economic imperatives

for rapid progress should not undermine the scheme design process.

8. A staged and cautious approach should be adopted for the introduction of any market-based

scheme: Although a market-based approach to REDD has the potential to bring significant benefits, we

must remain wary of the associated risks. If a market system is not designed and administered

appropriately, it could have significant adverse climate, environment, social and economic impacts. A staged

and cautious approach should be taken to the introduction of a market-based scheme. This should start with

capacity building and demonstration projects, coupled with an interim fund-based scheme to support early

action. Graduation to a full market-based scheme must be contingent on the production of evidence that the

risks can be appropriately managed and that the national and international frameworks are sufficiently robust

and transparent to support an environmentally and socially credible scheme.

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