Legal Frameworks for REDD - Benefit Sharing

One of the most challenging hurdles for successfully connecting national governance systemswith the REDD component of a future UNFCCC agreement (hereafter “REDD regime”) will be thereceipt of financial inflows from international sources and distribution to relevant national actors.In an environmental law context, the term “benefit sharing” has a long history in a program of workunder the Convention on Biodiversity (CBD) aiming to distribute financial results from the utilizationof genetic resources to local inhabitants from whose lands such resources were taken. Similarly,government, private landowner and forest community actors most relevant to national forestgovernance, as well as outside investors and other supporting actors, will require equitable benefitsharingarrangements to compensate them for their participation in REDD regimes. Given clear andeffective legal frameworks, successful benefit sharing can help guarantee public support, promoteenvironmental integrity and thus inspire investor confidence.Analysis of REDD preparatory efforts to date suggests countries have paid insufficient attentionto the apportionment of revenues amongst forest governance actors, and most benefit-sharingarrangements lack clarity as a result.1 Additionally, financial experts warn of the potential impacts oflarge carbon finance revenue streams in developing countries with feeble rule of law and inadequatepublic financial management capacity, or where human rights norms are disregarded.2 In additionto the concerns of local and indigenous communities relating to ownership and participationissues addressed in previous chapters, such groups are at risk of benefit-apportionment processesoverlooking them or of losing any benefits promised them via intermediaries. In turn, such a resultcould undermine local populations’ participation and support of forest conservation projects, andpotentially the permanence of any carbon sequestered over the long term.This chapter will focus on clarifying the legal aspects of benefit-sharing frameworks, although littlenational or sub-national law on the topic has been developed to date. The chapter will first provide abackground on the broader notion of Payments for Ecosystem Services (PES) initiatives, of which REDDis a multi-level variety. Then the chapter will identify approaches for REDD accounting frameworksand the significance of such decisions on benefit sharing. The third and fourth sections of the chapterwill focus on payment inflows from international sources and payment out-flows to local actors.