Subsidies to forest destruction dwarf REDD+ funding

A new study by ODI examining subsidies for the production of ‘forest risk’ commodities in Indonesia (timber and palm oil) and Brazil (beef and soya) concludes that domestic subsidies for the production of these commodities dwarfs the money provided through mechanisms to Reduce Emissions from Deforestation and Degradation (REDD+). This is particularly important as these two countries receive 40 per cent of total REDD+ funding, US$8.7 billion since 2006.

ODI identified 48 (domestic) subsidies, and was able to estimate the value of half of them; revealing that REDD+ funding is eclipsed, specifically by domestic agriculture and biofuels subsidies. It is likely that national subsidies for forest-risk commodities also outstrip REDD+ monies in other countries which receive far less REDD+ funding.

It is therefore clear that REDD+ money to keep forests standing will not have much impact unless the real drivers of deforestation, including subsidies that lead to forest loss, are addressed.

The authors note that countries are required by the United Nations Framework Convention on Climate Change (UNFCCC) to address the drivers of deforestation when developing national plans, but a recent assessment of 43 REDD+ country studies and 98 readiness documents reveals that most countries have simply not done this.

The authors therefore call on donor and private investors to identify opportunities to phase out or reform current subsidies that encourage forest loss, but doing this in such a way that they protect the poor and most vulnerable. As the data in the report shows, without this, there is little chance that REDD+ funds can be truly effective.