Understanding the demand for REDD+ credits


REDD (Reducing emissions from deforestation and forest degradation), broadened to REDD+, has recently emerged as a potentially important component of the global policy mix to mitigate climate change. In this context, it has been the hope of policy-makers that private sector stakeholders will turn into novel and active actors in many of the different components of REDD+ such as forest conservation and many have expected them to play a central role in providing funding for forest protection. However, even as REDD+ credits have become increasingly available on the voluntary market – private sector stakeholders seem to have lost interest REDD+ carbon credits.

In order to better understand possible models of private sector engagement in REDD+ in the future, this report analyzes the motivation of a sample of private sector stakeholders to engage in REDD+, the perception of the potential of REDD+, the critical obstacles to making REDD+ functional and finally how private sector actors perceive themselves as part of future REDD+ scenarios.
Based on a range of qualitative engagements with a wide grouping of private sector actors, we find that few seem to expect a regulatory market for REDD+ to emerge and that credits from the voluntary market have to be more tailor-made to their specific needs (ranging from demands based on Corporate Social Responsibility, to portfolio diversification and hedging strategies against stranded assets). The carbon value alone is currently not sufficient for many private actors.

For REDD+ to become more attractive for most surveyed private sector stakeholders, the main problem is the uncertainty about how REDD+ will be designed in the future, along with building understanding of the values, barriers and risks that accompany REDD+.