Who are the beneficiaries and how are they identified?

Under Vietnam’s national Payment for Forest Ecosystem Services (PFES) implementation, those who have had forests for the last 20 years are ineligible to receive PES, as there is little or no additionality from the BAU activities of low-emitting actors (Pham et al. 2014). Because this neglects good forest stewards’ efforts in forest conservation, it creates a perverse incentive for actors to carry out emitting activities, as only then would they be eligible for REDD+ benefits. So, instead of protecting forests, these groups are now the main actors behind deforestation and forest degradation. A REDD+ approach based too much on effectiveness and efficiency ignores equity considerations. Programmes should not prioritize emissions reductions too much to the point of inequitable criteria for meeting and obtaining benefits, as in many countries, populations in isolated areas have played crucial roles in forest protection (Loft et al. 2017).

WHO: Those with a legal claim or right, whether statutory or customary, to any benefits associated with reduced carbon emissions.

WHY: Based on theories of libertarian justice, i.e., first-come, first-served, natural resources should be appropriated by those who discover them, claim them, or provide labour inputs.

WHERE: This sentiment is strongly felt in Tanzania and Brazil, perhaps a reflection that land and forest resource rights are more clearly defined in these countries.

CHALLENGES/IMPLICATIONS: If carbon and/or land rights are uncertain (as they are in many REDD+ countries) then it may be unclear who is legally entitled. Benefits based on legal rights can also further disadvantage the poor forest users who seldom possess legally recognized rights to land and/or forest products, often because of the high costs of getting legal recognition (Luttrell et al. 2013^[1]).

WHO: Forest managers, local people and companies.

WHY: Merit-based rewards should be distributed to those who have done the work.

WHERE: When asked in a survey whether “REDD benefits should reward large-scale industries/ companies for reducing forest emissions”, many Brazilian indigenous and traditional groups fear that “criminals” would be rewarded, given that much of the deforestation is carried out by large private landowners who do not comply with the National Forest Code or do not have proper land titles. In Indonesia, on the other hand, this statement received strong support among government and private sector respondents, but only around half of NGO/research respondents agreed with it.

CHALLENGES/IMPLICATIONS: In some contexts, the largest emissions reductions may be achieved by large companies (which are also, paradoxically, the dominant emitters in many contexts). Does that mean we are rewarding them for their past poor environmental performance? (Luttrell et al. 2013^[2]).

WHO: Indigenous groups or other forest users that have a record of responsible forest management. In this view, REDD+ serves to recognize both past and current efforts, and to encourage the continued protection of forests.

WHY: To reward a virtuous pattern of behaviour (merit-based) benefits should be distributed equally among all providers of a service regardless of the level of service provision (egalitarian) and support marginalized forest dwellers (needs-based).

WHERE: In Peru and Brazil, benefits are being distributed to people not directly involved in deforestation. This is done as a means of encouraging collaboration and creating incentives for forest protection. Elsewhere, this rationale factors little in the design of benefit sharing systems at the project level.

CHALLENGES/IMPLICATIONS: In low-emission situations, it is difficult to prove and therefore reward a reduction in emissions per se. However, it can be argued that emissions are likely to increase in the future, therefore, continued conservation could be considered to reduce potential future emissions (Luttrell et al. 2013^[3]).

WHO: Can be both project proponents and beneficiaries.

WHY: Merit-based, i.e., benefits should be proportional to inputs so that people and/or companies shouldering implementation, transaction and opportunity costs are compensated regardless of the emissions reductions for which they are directly responsible. Also, most REDD+ projects are in the early stages of implementation and recognize the need to give actors incentives for getting involved.

WHERE: In Tanzania, many REDD+ projects are combining up-front funding as compensation for early inputs, with plans to shift to payments based on performance. However, the financial incentives have raised expectations. A forthcoming study shows that initial payments were based on villagers’ minimal efforts and/or interest, so do not guarantee long-term behavioural change. Without a sustained supply of payments, village conservation efforts may cease.

CHALLENGES/IMPLICATIONS: This approach does not necessarily allow for a direct link between payments and reductions in deforestation and forest degradation. If people are rewarded regardless of outcomes, they have little incentive to perform well. It also ignores differences in opportunity costs. This is because, for example, there tend to be more valuable economic opportunities in areas where forests have higher carbon content, so communities in these (predominantly highland) areas will incur greater potential livelihood losses than communities in low-carbon forests (Luttrell et al. 2013^[1]).

WHO: Private sector proponents, NGO project proponents, or central or local governments, i.e., those that are not necessarily forest based, but are essential for the implementation of REDD+.

WHY: Companies and governments should be compensated for running costs, such as setting up systems for monitoring, reporting and verification, and for enforcement.

WHERE: Private sector project developers in Indonesia are lobbying to influence national policy on setting benefit sharing rules, arguing that project developers require adequate compensation to cover the implementation and transaction costs incurred as a result of REDD+ readiness activities. In Tanzania, the level of administration fees that should accrue to the facilitating organization is a key issue in negotiations with communities.

CHALLENGES/IMPLICATIONS: The need to balance between providing incentives to those facilitating the implementation of REDD+ to achieve effective implementation, but also guard against windfall profits (Luttrell et al. 2013^[5]).

WHO: Excluded and vulnerable members of a community (or areas in a region).

WHY: Needs-based, i.e., those with the greatest need should receive a greater reward. Focusing on carbon emissions and compensation of costs could mean rewarding wealthy actors for reducing their illegal behaviour, which entrenches inequality and undermines the moral and political legitimacy of REDD+.

WHERE: Many of those interviewed in studies in Brazil and Indonesia very strongly agreed with the idea that REDD+ should mainly reward local people for emissions reduction activities.

CHALLENGES/IMPLICATIONS: Without involvement of local people in their implementation, REDD+ projects are unlikely to be effective (Luttrell et al. 2013^[6]).

Despite general agreement that REDD+ benefits should be shared among different stakeholders, there are also diverse views on who REDD+ beneficiaries should be, and how they should be paid. A paper examining the perceptions of REDD+ stakeholders in Brazil, Indonesia and Vietnam on different aspects of financing; namely who should finance REDD+ and who should receive REDD+ benefits for what, finds that these issues are political, driven by considerations at the national level and, despite the narrative of inclusive participatory decision making, are largely determined by governments. Six main beneficiaries were identified and examined: actors with legal rights; actors that actually reduce emissions; forest stewards; actors that bear the cost; effective facilitators for implementation; and the poor and marginalized. Across Brazil, Indonesia and Vietnam, most interviewees agreed that actors who actually reduce emissions should be prioritized to receive REDD+ benefits, with growing consensus that the poor as well as actors who have legal rights should receive REDD+ benefits.

Yet, across the three countries, there are differences in how actors perceive different issues related to REDD+ financing. In Vietnam, most respondents believed benefits should be allocated to actors who actually reduce emissions, with many stakeholders advocating for more attention to be placed on distributing benefits to the poor, with fewer benefits being channelled to facilitators. In contrast, in Indonesia and Brazil, respondents became less certain that results-based payment was the way forward. In Brazil, many stakeholders believed facilitators should also receive benefits due to the active role they play in REDD+ programmes in the country.

As public perceptions and policies are not always aligned, and political interests determine how REDD+ finance and benefit sharing mechanisms are designed and implemented, addressing funding gaps and improving benefit sharing mechanisms alone will not solve the problem. Resolving the problem also requires addressing weak coordination between sectors and government agencies, unclear tenure and weak law enforcement; recognizing and addressing powerful drivers of deforestation; and better alignment between national development goals without compromising forests (Pham et al. 2021^[7]).

Under the REM program in Acre, Brazil, 70% to 90% of German funds go directly to local actors, most of whom are Indigenous Peoples and traditional communities that act as conservation stewards, and farmers and cattle ranchers, who are reducing deforestation along the agrarian frontier (KfW 2017). Lessons from these benefit sharing experiences can be used to identify and mitigate risks of inequitable outcomes (Duchelle et al. 2019, 18^[8]). Indigenous communities and traditional populations were pro-actively consulted and their participation in collaboration with the authorities helped to ensure that no squatting or irregular settlements came with new road access. The programme also had a strong focus on strengthening the cultural identities of populations through the preparation of an inventory of traditional cultures and the dissemination of this research through five centres of cultural dissemination aimed at upholding the value of cultural identity of the 12 recognized indigenous ethnic groups. Ultimately, these efforts had a positive impact on implementation of the programme by creating a political and social force working daily to achieve a tangible result and social inclusion, while simultaneously valuing the forest (Dengel and Horton 2011^[9]).

Vietnam’s Payment for Forest Ecosystem Services (PFES) programme is largely considered a success for its financial impact on its beneficiaries. However, environmental and social outcomes among funding recipients are mixed, largely due to land tenure context. For example, in the northern region of Vietnam where people are allocated less than one hectare of forest, PFES payments contribute less than one percent of their incomes (Pham et al. 2020^[10]). However, in the southern region where people have at least 30 hectares of allocated forests, PFES can contribute up to 74% of household income (Pham et al. 2021b^[11]). This disparity in outcomes, largely due to differences in tenure, suggests that even within a country, variations in regional contexts should be considered during programme design to identify the primary programme beneficiaries.