global climate change ltd.: market efficiency or governance failure? addressing the distributive...
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Global climate change Ltd.:market efficiency or governance failure?
Addressing the distributive fairness of REDD+.
Thesis for the degree of Master of Science
VRIJE UNIVERSITEIT AMSTERDAM | POLITICAL SCIENCE
SPECIALISATION: GLOBAL ENVIRONMENTAL GOVERNANCE
Prepared for: Dr. P. Pattberg (supervisor) and Dr. P. Pennings (second reader)
Prepared by: Arjen Leemburg (VU student number: 2048957), Amsterdam, 6 August 2012
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Thesis for the degree of Master of Science
Consisting of 16,441 words
Front cover illustration created by Pearse Gaffney, commissioned by Arjen Leemburg
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1. Abstract
In order to finance climate change mitigation projects, the global climate change regime has devised a number
of programmes that resulted into an institutional inclination headed for the privatisation of the environment
(Harvey, 2010; MacNeil and Paterson, 2012). One of the most prominent efforts in this regard is the reducing
emissions from deforestation and forest degradation (REDD+) scheme. The REDD+ scheme is designed to
protect and nurture carbon-absorbing forests throughout the world, by means of putting a price tag on carbon.
But, is such a scheme fair? As the existence of such carbon-absorbing forests is of crucial importance for all
human life, carbon-absorbing forests can be regarded as global public goods. An important characteristic of
these global public goods is that they are non-rivalrous and non-excludable (Kaul, 2012, p. 39). Thus, does
commodifying global public goods interfere with the legitimate governance of such goods?
The puzzle to which this research is aiming to find answers for is whether the REDD+ schemes are addressing
the fairness of the distribution of climate change accordingly. Is the REDD+ scheme able to distribute the
financial means equally and fair among the participating beneficiaries? Or , are considerations with regard to
fruitful investment opportunities playing a significant role concerning the allocation of REDD+ capital? This paperresponds to this issue by conducting a quantitative analysis that includes indicators that are able to measure the
fairness of the spatial distribution of REDD+ capital. The outcomes are then bolstered by including a case study
that accounts for a detailed examination of a REDD+ project in Cambodia. The answers to these questions will
lead to a response to David Harveys claim that the current global climate change regime is a neo-liberal strategy
to commodify global public goods (Bumpus and Liverman, 2008; Harvey, 2010; Harvey, 2004).
Keywords
Carbon finance; Cambodia; climate equality; distributive justice; earth system governance; economic geography;global public goods; REDD+; World Bank.
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Acknowledgement
The empirical evidence in this thesis relating to the Cambodian case study is obtained through sources that
provided documents that have to be treated with a degree of confidentiality. Please note that this version of the
thesis does not include the empirical evidence from the Cambodian case study.
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Table of contents
1. Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Global climate change and the response of the global climate change regime . . . . . . . . . . . . . . 5
2.2 The REDD+ architecture and the VCO market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 The carbon economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Distributive justice in governing global public goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5 Questions left unanswered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3. Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.1 Defining the dependent variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Translating indicators for distributive justice into independent variables . . . . . . . . . . . . . . . . . . . 18
4.3 Identifying other independent factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.4 Formalising the research design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5. Testing the degree of fairness in REDD+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.1 Quantitative analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.2 Qualitative analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.1 Placing the results into existing literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.2 REDD+ and the earth-systen governance context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8. Annex I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Annex II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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List of Figures
1. Global climate change and vulnerability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. The REDD+ architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. REDD+ carbon credit process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Illustration of the theoretical assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5. Causal relationship: distributive justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6. Causal Relationship: business considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7. Scatter plot regression analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8. Mechanisms of REDD+ in Cambodia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
List of Tables
1. The dependent variable REDD+ investment per country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2. Regression analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3. Revenues from REDD+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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2. Topic
On the first of April 2009, HRH Prince Charles arranged a meeting with G20 leaders during which he urged to
bring global climate mitigation programmes up to speed (Prince of Wales, 2009). In early April 2009, I was able
to host a meeting of heads of state and government at which it was agreed to establish an informal working
group to look at the issue of climate change. As it turns out, it seems the quickest and most cost-effective way
to buy time in the battle against catastrophic climate change is to find a way to make the trees worth more alive
than dead (Ibid, p. 2). This call for action resonated well among the participants, as the mitigation scheme he
referred to reducing emissions from deforestation and forest degradation (REDD+) is endorsed by a long-list
of high-profile politicians, academics, cultural leaders and business leaders, including; David Cameron, Hillary
Clinton, Robert Redford, Jeffrey Sachs and Robert Zoellick (Gilbertson, 2010; UN-REDD, 2012). Disregarding the
degree to which these leaders have helped to materialise REDD+, the global climate change regime has
embraced the REDD+ scheme as one of the prime mitigation efforts by the global community to address global
climate change (Corbera and Schroeder, 2010; UN-REDD, 2012). Further, a crucial element of the REDD+
scheme is that it allows for a prominent role of private actors to participate in this global climate change
mitigation programme (Corbera, Estrada and Brown, 2010).
This chapter will shed light on the role of REDD+ within the global climate change regime, the economic
principles supporting the scheme and delivers a review of the academic critique voiced thus far. As it is
paramount to acknowledge carbon-absorbing forests as a global public good in context of the distributive
justice discussion, the latter half of this chapter will concisely revisit relevant work in this field. This will help to
build a conceptual framework that is able to test the claim that is rooted in political economy and economic
geography that REDD+ is a deceptive scheme that reinforces an unequal distribution of the burdens and
benefits of global climate change (Harvey, 2010; Lohman, 2011).
2.1 Global climate change and the response of the global climate change regime
Humans are responsible for releasing more than 2,000 billion tons of carbon into the atmosphere since the
inception of the Anthropogenic era (Page, 2008, p. 557). The current levels of human induced green house gas
emissions will inevitably lead to an unprecedented change to the biodiversity in a wide variety of regions
(Bellard, et al. 2012, p. 375). At the current rate of biodiversity change, our generation is about to witness the
sixth mass extension of species in the history of the Earth (Barnosky, et al., 2011). Further, carbon emissions, as
an independent factor, play an important role in relation to food deprivation, health, migration, economic
development and resource conflicts (IPCC, 2007; Stern, 2007; UNFCC, 2008).
Deforestation accounts for approximately fourteen to eighteen percent of global greenhouse gas emissions
during the early 2000s (Corbera and Schroeder, 2010, p. 89). Calculating the percentage of carbon added to the
atmosphere by deforestation since the start of the Anthropocene is even more noteworthy: Charlotte Streck
(2008, p. 241) estimated this contribution at 36 percent since 1850. Hence, the global climate change regime has
identified deforestation as one of the main pillars with regard to its global climate change mitigation
commitments (Angelsen and Wertz-Kanounnikoff, 2008; Corbera and Schroeder, 2010).
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In response to global climate change, complex sets of governance bodies at various levels are applying
themselves to counter the problem of global climate change (Keohane and Victor, 2011). At the international
level, numerous parties are involved with responding to this irrefutable global issue (IPCC, 2007). These parties
include national governments, international institutions, non-governmental organisations, development agencies
and business representatives (Biermann, 2011; Keohane and Victor, 2011; Roberts, 2011). The collection of
stakeholders at this level is often referred to as the global climate change regime (Roberts, 2011, p. 776). Thekey task of this regime is to negotiate a sufficient answer to global climate change that is acceptable for all the
stakeholders involved, and is at the same time effective enough to act in response to human induced climate
change. The response of the global climate change regime is grouped into two categories: mitigation and
adaptation (Adger, et al., 2006).
The links between the impacts, the adaptive capacity and the adaptation requirements in relation to vulnerability
are summarised in figure one. Mitigation and adaptation do not necessarily act independently from one another,
large sums of adaptation capital are being used to fund mitigation projects and proportional amounts of
mitigation yields are funnelled to adaptation projects (Baer, 2006, pp. 131-133). Omitting a detailed discussion
on contrasting mitigation with adaptation, the dominant issue in negotiating effective measures relates to
responsibility and vulnerability (Adger, et al. 2006; Fssel, 2010, pp. 598-601; Grasso, 2011, pp. 361-364).
Elucidated in a simplified manner: who is to blame for global climate change, and who is most vulnerable to
global climate change?
Figure 1. Conceptual diagram, identifying global climate change vulnerability. Diagram based on the global climate
change vulnerability concept developed by Isoard, Grothmann and Zebisch (2008).
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With the complicated governance structures as a backdrop, REDD+ is one of the few mitigation efforts that are
regarded as acceptable, fair and effective by most parties involved in the global climate change regime (Corbera
and Schroeder, 2010, pp. 90-94). Nicholas Stern identified tackling deforestation as the most cost-effective way
of complying with the IPCC targets (Stern, 2006). Incorporating standing forests into the global carbon emission
economy is perceived as one of the most appealing options to mitigate carbon emissions. This belief is based
on the conviction that a market-based system will provide a sustainable stream of revenue for REDD activities(removing funding from the political whims of conventional aid streams), greater sums of capital, greater
investment, more flexibility for private interests and consequently more ecological success (West, 2010, p. 303).
Hence, enticing private capital into REDD+ projects equals a more effective manner of protecting forests covers.
For those actors that can be held accountable for emitting carbon, participating in REDD+ is economically more
attractive than reducing emissions within their current operations (Kinzig, et al., 2011; Lohman, 2011). Thus, the
political costs of implementing a scheme that allows businesses and governments to import the right to emit
carbon are not as high as restructuring economies in a carbon friendly manner in the industrialised world (mainly
in China, North-America and Europe). Another crucial argument why REDD+ is a politically desirable scheme
relates to the fact that it allows private investors to insert capital into the scheme, thus: governments are relieved
from accounting for the whole sum of capital required to preserve and nurture carbon-absorbing forests
(Munden Project, 2011). When referring to the efforts of governments and how this is perceived with voters,
Brennan (2009, p. 317) concludes as follows: the average consumer-voter-taxpayer is going to lose out in all
this, the net cost of the scheme is essentially born by consumers in return they will get a global emissions
reduction that is a very tiny fraction of the whole and perhaps with negligible climate effects. Therefore, from a
rational choice perspective, the majority of a ballot (at least if only climate policies are decisive for ones political
preference) would favour climate policies that would neglect the issue of global climate change. Essentially, the
issue of global climate change relates to the problem of the tragedy of the commons (Kaul, 2012). Henceforth,
the rationale for mitigating global climate change has to be sought in justice theories (Ibid).
2.2 The REDD+ architecture and the voluntary carbon market
In a world in which the power and autonomy of nation-states (in particular for developing nation-states) has
considerably eroded in favour of global markets, corporations and institutions, issues of inequality should
increasingly be addressed by the international community (Nussbaum, 2003, p. 4). The REDD+ scheme is an
example of how issues of inequality are increasingly being addressed by an international set of actors. Lipschutz
and McKendry (2011) view that the development of the global climate change regime in stemmed in the
development of a new rule, led by neo-liberal policies in which the power of the nation-state diminishes. These
neoliberal practices (also referring to REDD+) are a result of the merger of the public sector and the private
sector (Ibid). Although the conference of the parties (COP), during which schemes such as REDD+ are discussed
and decided on (UN-REDD, 2012), is centred on negotiations of nation-states, Lipschutz and McKendry (2011)
argue that the enduring influential pressure of private parties might alter the set of preferences of certain actors
present during such meetings.
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COP 16 in Cancun was an important milestone for the development of the REDD+ framework. As it was agreed
to work towards incorporating REDD+ into the compliance market, investors perceived this as a signal that
REDD+ will be one of the prime mitigation mechanisms (Hamilton, Peter-Stanley and Marcello, 2011). For
example, the state of California allows offsetting the consumption of carbon by enabling emitters to purchase
REDD+ carbon credits (UN-REDD, 2012). This is an important development, as investors regard the participation
of businesses and governments from the United States (a country that has the largest mitigation potential) acrucial indicator of the long-term success of carbon markets (Thomson Reuters Point Carbon, 2011). COP 17 in
Durban in December 2011 ensured a long-term commitment to REDD+ by installing a REDD+ exchange market
in Oslo and by assigning more adaption capital to REDD+ projects (UN-REDD, 2012, pp. 3-14). Recent
discussions during the RIO+ 20 Earth Summit delivered similar results (United Nations, 2012).
Figure two demonstrates the complexity of the current REDD+ architecture, as it currently stands. As the
scheme is a hybrid between market-mechanisms and development aid (through adaptation funds), it is
inappropriate to regard REDD+ as a mechanism completely financed thought market-mechanisms. Rather, just
over half of the accumulated capital influx of REDD+, which currently stands at USD 2.6 billion (UN-REDD,
2012), originates from direct investments from other nation-states and adaptation funds. This capital is
bypassed through non-market funding mechanisms.
Figure 2. Conceptual diagram, exhibiting the REDD+ architecture and its manner of working. Diagram based on the
interpretations from Bumpus and Liverman (2008, p. 139) and Corbera and Schroeder (2010, pp. 91-96).
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REDD+ is incorporated into the voluntary carbon (VCO) market (UN-REDD, 2012). The market value of the total
voluntary carbon market for 2010 accumulated to USD 424 million (Hamilton, Peter-Stanley and Marcello, 2011,
p. 26). Within the voluntary market, REDD+ projects account for 29% or USD 123 million of the total market size
(Hamilton, Peter-Stanley and Marcello, 2011, p. 28). The motivations for public parties and private parties to
participate in the VCO market is rooted in either corporate responsibility objectives, purchasing credits in
anticipation of increasing pricing (hedging) and offsetting mandatory industry and governmental carbonreductions (Ecosystem Marketplace, 2012). A recent survey discovered that 61 percent of FTSE 100 companies
(traded at the London Stock Exchange) participated in offsetting the carbon footprint on VCO markets during the
year 2009 (Ibid, 2012, p. 14).
Apropos the mechanics of earning REDD+ credits, figure three illustrates the functioning of the scheme.
Essentially, an institutional body usually via the Verified Carbon Standard (VCS), commissioning licensed
evaluating agencies evaluates the historical context of deforestation and the carbon stock present in a certain
area (UN-REDD, 2012). The project developer (either funded by public or private capital) can then earn carbon
credits by means of mitigating the further decrease of carbon-absorbing forests or by increasing the carbon
absorbing capacity (Hamilton, Peters-Stanley and Marcello, 2011). These carbon credits can then be sold on
various VCO markets, as highlighted in figure two.
Figure 3. REDD+ carbon credit accreditation process (UN-REDD, 2012; Hamilton, Peters-Stanley and Marcello, 2011).
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In order to entice developing countries into participating in REDD+, the global climate change regime has raised
USD 108.1 billion in long-term commitments (twenty to fifty years) thus far (UN-REDD, 2012, p. 4). This finance is
meant to help countries setting up projects, by for example compensating local stakeholders, setting up the
institutions to manage REDD+ projects, developing property rights infrastructures and supporting private REDD+
project developers (Ibid, pp. 4-16). Given the vast amounts of capital inserted into REDD+ and the breadth of
participants in the scheme, most literature concludes that REDD+ is a scheme that is likely to evolve in theforeseeable future (Ecosystem Marketplace, 2012; Hamilton, Peters-Stanley and Marcello, 2011; Roberts, 2011;
Thomson Reuters Point Carbon, 2011; United Nations, 2012; UN-REDD, 2012; West, 2010).
2.3 The carbon economy
The concentration of carbon dioxide in the air is now intimately connected to a million different places on the
earth through economic transactions (Robertson, 2012, p. 378). The development of such a carbon credit
economy has to been seen in light of the changing role of the state with regard to economic policies (Harvey,
2010). As a consequence of the neoliberal context within which responses to climate change have emerged,
those responses have deviated from a prior focus on command-and-control mechanisms, such as: regulation,
planning, developing technologies (MacNeil and Paterson, 2012, p. 232). Harvey finds that governance
structures, on the global and state level, are locked into a state-finance nexus (Havey, 2011, p. 83). Harvey
criticises the relentless dependency of states on capital markets, as this impedes the development of the poor.
Bumpus and Liverman (2008, p. 131) conclude that markets are seen as the most effective way to reduce
emissions. So, why are markets perceived as imperative instruments to mitigate global climate change?
Markets, among the most durable of human institutions, tend to arise when resources are recognised to be
scarce (Kinzig, et al. 2011, p. 603). Many goods that are crucial for human-survival are sold on global markets
(Hart and Moore, 1990). Agricultural products and fossil fuels are prime examples of such essential goods (Ibid).Kinzig et al. (2011) argue that it is problematic that the prices of goods that are produced by means of reducing
the carbon sequestration capacity (i.e. replacing forests with farmland) do not incorporate the social costs of
eradicating public goods. Hence, in order to integrate the social costs of consuming products that undermine
the quality of public goods, such as forests, public goods should be commodified. Thus, in order to preserve
public goods, the only way forward is to create an integrated global market with well defined property rights and
pricing mechanisms that include all the social costs of impairing public goods (Ibid, p. 604). By commodifying
carbon, REDD+ will be able to attract large sums of private capital that can be regarded as additional resources
to protect forests covers (Munden Project, 2011).
Like the new derivatives, carbon commodities work through a process of radical disembedding in this case,
disembedding the climate issue from the historical question of how to organize for structural, long-term change
capable of keeping remaining fossil fuels in the ground (Lohman, 2011, p. 90). Consequently are those actors
that are profiteering from emitting carbon the most, as being the economically well off, able to export their
liabilities of mitigating their emissions to other regions, whilst continuing their economic activities. Hence, carbon
markets facilitate openings for emitters to continue their polluting economic activities, without being penalised
for it.
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Paul Collier, a prominent economist at Oxford University and former World Bank director, found that property
rights are a central issue concerning protecting forest covers (Collier, 2011, p. 19). Collier refers in his research
to Haiti and the Dominican Republic. In Haiti, property rights are not arranged in a proper fashion and as a result
Haiti only has two percent tree-cover. On the other side of the Island, the Dominican Republic managed by
means of implementing a strict property rights framework to arrive at 37 percent tree-cover. Collier concludes
that people will not bother to plant or protect trees on land they do not own (Ibid, p. 27). Strict property rightsarrangements on natural liabilities such as carbon emissions would ensure the basis of a well functioning
carbon economy (Ibid, p. 54). Colliers main argument is that as long as carbon credits are being traded at a
decent level of about twenty to thirty dollars per tonne, capitalism does not have to be antagonistic for the
environment (Ibid, p. 177). Collier then concludes by arguing in favour of the development of the carbon
economy, using utilitarian approaches that are not uncommon within neo-liberal economic frameworks (Kaul,
1999).
It is important to understand that Colliers view is rather common within the community of REDD+ leaders (West,
2010). HRH Prince Charles, who is regarded as a normative leader with regard to the development of the REDD+
scheme, subscribes to the remedies advocated by scholars such as Collier and Stern (Ritter, 2012). Both Collier
and Stern have been commissioned by the British government and international policy formulating institutions to
advice on identifying effective antidotes for reducing the level of carbon emissions (Collier, 2011; Stern, 2007).
The focus within discussions concerning the transformation towards a carbon-emission free economy is
centered around market-equilibrium and effectiveness on mainly a utilitarian scale. Many scholars and non-
governmental organisations are critical of such approaches, due to the neglect of the distribution of fairness
among the many actors involved in schemes such as REDD+.
A paramount issue with regard to installing market-mechanisms to manage a global public good is that it is
based on the scarcity of rights (Heal, 1999, p. 236). Suppose that carbon-friendly industries will replace carbon-emitting industries. Inevitably the price of carbon-credits will decrease, this then leads to what Harvey would call
the over-accumulation of capital (Harvey, 2004, p. 65). As a consequence, capital will be withdrawn from
mitigation projects such as REDD+ in favour of other, more profitable activities that could include replacing
forest-cover with agricultural land. Hence, the protection of carbon absorbing forest-covers is dependent on
industries and individuals reluctant to alter their production and consumption processes in such a way that
would account for reducing the carbon emissions levels. In this regard, the commodification of carbon-
absorbing forest-covers is a temporal fix. Hence, the long-term economic-efficiency of REDD+ is uncertain.
As the purpose of this research is to analyse the current distributive fairness of the distribution of capital within
REDD+, considerations of long-term efficiency will be left out of the analysis. It is however important to
understand the limitations of carbon as tradable commodities, in particular in relation to governance
architectures of global public goods.
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In the current system of supply and demand, deteriorating carbon-absorbing forests might indeed be protected
from extinction by providing market-incentives that encourage private actors to protect rain forests. However,
following the market logic, this might actually lead to a situation where other products from rainforests mainly
agricultural land, wood and palm oil would go up in price (Lohman, 2011). The only response to such an event
is to make the price of carbon higher, enabling it to overcome issues with regard to opportunity costs. A
conspicuous issue that is related to opportunity costs, but often neglected by institutions that endorse REDD+,is that the price of carbon should also cover local demands for food and fuel. A study on the opportunity costs
concerning the implementation of REDD+ in Tanzania concluded that the price of carbon should be at least in
the range of USD 20.00 to USD 25.00 in order for Tanzanian REDD+ projects to become economically viable
(Fisher, et al., 2011, p. 164). The point made by Fisher, et al. (2011) relates to the matter of uneven positions in
terms of the return on investment capacities of the regions participating in REDD+. Following Harveys logic of
over-accumulation (Harvey, 2010; Harvey, 2004), capital will inevitably be funneled to regions where it can
achieve a high profit. This will result into some regions experiencing a carbon-rush, whereas other regions will
be neglected in favour of more profitable activities with regard to land-use. As a result, by placing the
governance of forests into the hands of markets, some regions can anticipate for accelerated rates ofdeforestation (Lohmann, 2011), as the neo-liberal institutions (such as the World Bank) involved in promoting
REDD+ are actively endorsing the development of liberal property-rights frameworks throughout the developing
world (Harvey, 2010; Norton Rose, 2011). Therefore: given the unequal distribution of opportunity costs among
REDD+ countries, is it appropriate to construct market-mechanisms to govern carbon-absorbing forests?
2.4 Distributive justice in governing global public goods
Public goods defined as a concept has its roots in the 18th century, when scholars such as David Hume and
Adam Smith reflected upon the difficulties of accommodating the common good (Kaul, Grunberg and Stern,1999, p. 3). The nature of public goods is embedded in its non-excludable and non-rivalrous character (Ibid,
1999, pp.4-16). In this respect, it is undeniable that goods that absorb or retain carbon, such as carbon
absorbing forests, can be regarded as global public goods (Kaul, 2012, p. 39). Without such a public good, the
planet would become unfit to live at for all human life (UNFCC, 2008). Further, the ability to enjoy the benefits of
carbon absorbing forests the capacity to store carbon and the ability to maintain biodiversity is non-
excludable and non-rivalrous as we all live in the same atmosphere.
Global climate change, as a global public good, is generally perceived as a classic example of market failure
(Kaul, 2012; Kaul, Grunberg and Stern, 1999). A market failure in this framework relates to the inefficient
allocation of goods by a free market system (Sandler and Arce, 2012, pp. 55-63). There is no Pareto Optimal,
meaning that if actors behave along the lines of self-interest, the outcome for the market as a whole is inefficient
(Ibid). As the emissions of carbon lead to undesirable outcomes, on a net basis, for all human life (IPCC, 2007),
market interference is legitimate and commendable (Rawls, 1972). Harvey (Harvey, 2011; Harvey, 2004; Bumpus
and Liverman, 2008) also relates this market-failure of global climate change to the issue of inequality with
regard to those that economically gain from emitting carbon in relation to those that are subject to the
consequences (Leichenko and Obrien, 2006).
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With concern to the equal distribution of REDD+ funds, Cerbu, Swallow and Thompson (2010) analysed all the
REDD+ projects up until the end of 2009. The authors conclude that there is an unequal distribution of REDD+
activities; investors whether public or private have a preference for those countries with the greatest forest-
based emission potential (Corbera and Schroeder, 2010, p. 92). What is not incorporated in this analysis are
factors such as responsibility and vulnerability, hence it is crucial to gain further understanding of how concepts
of responsibility and vulnerability in relation to global climate change are defined.
The question whether it is appropriate to design global climate change mitigation programmes along the lines of
market equilibrium has to be sought in the realm of distributive justice theory. Utilitarian scholars, such as Rawls,
perceive fair distributive justice as: the main idea is that society is rightly ordered, and therefore just, when its
major institutions are arranged so as to achieve the greatest net-balance of satisfaction summed over all the
individuals belonging to it (Rawls, 1972, p. 22). This idea relies on the principle that each man in realising his
own is certainly free to balance his own losses against his own gains (Ibid, p. 23). Relating this principle to the
governance of climate change mitigation projects: as long as the overall gains compensate for individual losses,
and as longs as there is a fundamental threshold with regard to the losses, inequality should be tolerated. Rawls
view on how public goods should be managed relates to the conception that an economic system is not only an
institutional device for satisfying existing wants and needs but a way of creating and fashioning wants in the
future (Ibid, p. 259). Thus, the preferences of the majority whether to emit carbon or to limit the emission of
carbon is reflected in the price of carbon. The individual should have the right to emit, bearing in mind the price
he or she has to pay for it, that is determinded by a system of markets in which prices are freely determined by
supply and demand (Ibid, p. 270).
Scrutinising the liberal views on how to govern global public goods, many scholars have addressed issues
surrounding such goods, relating it to free-riding issues, vulnerability and responsibility (Adger, et al., 2006, pp.
4-16; Marino and Ribbot, 2012, pp. 323-325). These libertarian ideas are problematic because they deny thesignificance of unequal starting points, postulate the legitimacy of their favorite procedures, and end up affirming
the fairness of status quo (Paavola, Adger and Huq, 2006, p. 267). Thus, those that are responsible for over-
consuming public goods should compensate and should be made accountable for the damage inflicted on
those that are most vulnerable. Rather, the current global climate change regime is dividing the world up into
climate winners and loser (Leichenko and Obrien, 2006, p. 110-114). In this constellation, the winners are
those actors that have been able to free ride and the losers are those actors that are now dealing with
consequences: the most vulnerable. Does REDD+ also reinforce this status quo? Scholars such as Adger,
Bumpus, Harvey and Leichenko would agree, whereas other academics (e.g. Collier, Sachs and Stern) would
argue that REDD+ allows the most vulnerable to develop in a sustainable manner and that the net benefits for all
should be the leading guidance in discussions concerning the governance of global public goods.
As discussed in former paragraphs, the debate between liberal scholars and scholars that address distributive
justice is centred around whether the net-benefits for all should be the principal objective, or if equality with
regard to sharing the benefits and burdens of global climate change should be the foremost aspiration of the
global climate change regime. As the position of parties with regard to burden sharing is diverse and some
parties have advantaged positions, the liberal position that all parties should have equal obligations is invalid
(Paavola, Adger and Huq, 2006; Ringius, Torvanger and Underdal, 2002). The common denominator for equity
principles is that costs and/or benefits be distributed in (rough) proportion to actor scores on some dimension
(Ringius, Torvanger and Underdal, 2002, p. 6).
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Kapstein (1999, pp. 108-112) identifies another problem with the creation of markets for global public goods.
When analysing how another public good, social justice, is managed during an era of economic liberalisation,
Kapstein finds that there is no system in place for compensating the most vulnerable on the international level.
But on the national level, many welfare states compensate the most vulnerable for the detriment caused by the
volatile international economic system (Ibid, p. 111). Such a compensation scheme does not exist on such a
scale for the most vulnerable with regard to climate change (Paavola, Adger and Huq, 2006). And as thecountries that are responsible for dilapidating the environment by means of emitting carbon to the atmosphere
are to a certain extent unwilling to compensate the damages caused (Grasso, 2011), is it fair to install a market-
mechanism that allows individuals to emit as much as they can pay?
As global climate change can be regarded as a life-support common that is essential for all human species, it is
inappropriate to allow certain actors to pay off their debt to the most vulnerable by means of their economic
capabilities (Baer, 2006, p. 133). Armatya Sen (1999) subscribes to this conception by arguing that the harm
inflicted to the most vulnerable should not only be measured in economic terms, as this denies some crucial
elements of human survival and human contentment. For example, the costs of communities having to flee from
their native soil due to climate change are hard to measure as such a disbandment might have severe
consequences for the overall contentment with life of a community.
With regard to following the principles of distributive justice formulated by Hume, Nozick and Rawls market-
efficiency may help to distribute the burdens and benefits in a fair manner, but only if such a market mechanism
or the institutions involved distribute the burdens and benefits of global climate change in a fair manner (see:
Adger, et al., 2006; Grasso, 2011). A number of welfare states have demonstrated that a public good such as
social justice can be managed in a fair manner in the context of a post-Washington consensus neo-liberal
environment (see: Kapstein, 1999). Kapstein (1999) argues that the institutions that arrange the redistribution of
capital are a critical determinant with regard to establishing distributive justice.
2.5 Questions left unanswered
As the maturation of the REDD+ scheme is likely to accelerate after the RIO+20 conference (as stated in the
outcome document of the RIO+ 20 conference: United Nations, 2012), questions surrounding the fair distribution
of the finances and obligations that are linked to the REDD+ scheme are of paramount importance. Thus far, the
literature taken into account leaves the reader with an incomplete answer. It is yet unclear whether the financial
means of REDD+ are funneled to where it is most needed, relating it to the question if REDD+ adequately
addresses issues surrounding distributive justice. As the REDD+ scheme leaves the majority of public and
private investors with the freedom of choice to decide where to infuse capital, the prime puzzle is if REDD+
sufficiently directs its funds to countries where it is most needed according to distributive justice indicators set
and if this corresponds with the economic logic. The answer to this question can then be seen as a contribution
to the debate whether the global climate change regime is failing to address vulnerability and fairness within the
context of global climate change.
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3. Framework
Much of the critique voiced in the previous chapter derives from a political-economical and economical-
geography theoretical perspective. The spatial expansionist nature of capitalist systems has created wealth at
some locations, but has also caused deprivation at other locations (Harvey, 2010; Lohman, 2011). As the route
leading to getting access to REDD+ funding requires governments to cooperate with private partners for either
developing projects or to sell credits onto the voluntary carbon market, concerns around the competitive
capabilities to attract capital are on the agenda of many developing countries (Corbera, Estrada and Brown,
2010).
Capital will inevitably flow to where the return on investment is highest, whilst accounting for the risks of doing
so (Krugman, 1990). Harvey (2011) uses the analogy of weather systems to exemplify the infinite quest of profit
in capitalist systems. Like weather-systems, economic systems can be divided into low-pressure and high-
pressure areas, depending on certain uncontrollable underlying conditions. This notion of the inherent inequality
relating to the economic principles that are embedded in the capitalist system left many critical theory scholars
no option but to conclude that such schemes are ill equipped in dealing with public goods (Lohman, 2011).Thus, applying such market-based mechanisms to REDD+ will lead to an unbalanced distribution of funding;
countries with an advantaged set of characteristics will receive more capital than countries with a less attractive
set of characteristics. Ceteris Paribus, the capacity per tree to absorb carbon then becomes a crucial
determinant to where capital is being invested. However, as the political and economical contexts are diverse,
other considerations might prevail when it comes to making investment decisions. This notion of inequality is
confirmed by Bumpus and Liverman (2008): credits created by the CDM and VCO markets in the developing
South are valued less than those created in the industrialised North because of the perceived risks and costs of
creating carbon in the developing South (Ibid, p. 142). Thus, the rules of economic efficiency (Krugman, 1990)
will dictate that carbon developers and traders will extract the low-hanging fruit of cheap carbon reductionsfrom the developing world (Bumpus and Liverman, 2008, p. 142). As this creates a mechanism that allocates
credit for low-cost-cabon-reduction (Ibid, 2008, p. 142), an unequal spatial distribution of over-accumulation at
low-cost locations and under-investment at high-cost locations is inevitable (Harvey, 2011, pp. 184-214). This
point relates to Harveys finding that a capitalist investment is in a continuous quest for at least three percent
compound growth (Harvey, 2011, p. 139).
Key in this debate is the issue of property rights (Bumpus and Liverman, 2008; Collier, 2012; Harvey, 2010;
Lohman, 2011). Harvey (2010) finds that an efficient system of capital accumulation can only materialise under
the condition that property rights are commodified and privatised, whilst the state acts as the agent of
redistribution and regulation (Bumpus and Liverman, 2008, p. 142). Property rights are of paramount importance
to every capital owner when making an investment decisions (Hart and Moore, 1990). In relation to REDD+, land
tenure rights and carbon credit ownership play a crucial role (Corbera, Estrada and Brown, 2010). Among
neoliberal scholars it is often assumed that customary land tenure rights impede economic development (Collier,
2011; Firmin-Sellers, 1995). Firmin-Sellers (1995, pp. 873-879) found that the institutions enforcing the property-
rights framework are essential for development of an economy: investors must have confidence in the
institutions supporting the property-rights infrastructure. The productive potential of private property rights
depends upon the political institutions through which property rights are designed and enforced (Ibid, p. 878).
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The World Bank is an international institution that addresses the underdevelopment of a commercially viable
legal framework by initiating numerous projects that ought to lead to an institutional development of the
management of property rights (Ecosystem Marketplace, 2012; Norton Rose, 2011). Seemingly there is a causal
effect in respect of the development of carbon property rights and the attainment of REDD+ projects. Clearly
the assignation of private property rights is a condition of possibility for the creation of such markets, as it
creates the potential commodities to be traded (MacNeil and Paterson, 2012, p. 233). This condition of rightsfeeds into Harveys argument that marketing-mechanisms survive by distributing gains to private hands
(Harvey, 2011, p. 126).
This inherently leads to an unequal distribution of REDD+ investments, as there is a variety in key variables that
play a vital role with regard to property rights and economic viability. For example: a carbon-absorbing tree in
Costa Rica is in principle identical to a carbon-absorbing tree in Cameroon, but the opportunity-costs of setting
up a REDD+ project are subject to variety. These theoretical underpinnings form the basis of the framework
developed in the latter half of this chapter.
As the literature from both liberal and historical-materialist strands gives prominence to the unbalanced spatialnature of capital, it is incisive to assume that a market-base scheme such as REDD+ will advance in an unequal
manner. Further does the cited research confirm Harveys (2004) notion that a proper installation of property
rights is a prerequisite for capital to settle at a certain location. Figure four (next page) hypothesises the
consequences for a number of carbon forests if the contextual conditions, that are chief for capital owners in
relation to making investment decisions, are unequal.
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Figure 4. Illustration of the theoretical assumptions applied to the REDD+ architecture.
In figure four, carbon forest A represents the most favourable conditions for setting up carbon-forest project. For
this carbon-absorbing forest, the property rights are well arranged and enforced by competent and stable
institutions. Further, the opportunity-costs in relation to extracting the carbon sink capacity are low and the
economic yields are high as a result of these low costs. Ergo, project developers and investors will have a
preference for forest A. Eventually, the majority of capital that generates carbon credits will originate from forest
A. This development is vested in the economic principle that REDD+ projects will be developed at the lowest
possible cost, hence there will be simply more carbon credits available in forest A, in comparison to forest B and
forest C. Carbon forest C will demonstrate a deficiency in private investments for setting up REDD+ projects, as
the project will lack the confidence that property rights will be managed accordingly. Additionally, the profit
potential does not weigh up against the opportunity-costs and other risks involved with the project. With regard
to carbon forest B, either the conditions concerning the property rights are not optimal or the opportunity costs
are out of balance in relation to the return on investment. These theoretical assumptions lead to the following
research question:
Does REDD+ ensure a balanced distribution of capital among the participating states?
Central to answering this question in the appropriate manner is to derive correct conceptions of balanced
distribution from the literature taken into account. This balanced distribution relates to conceptions of
distributive justice. As the theoretical assumptions would instinctively respond with a no, it is crucial to also
incorporate conceptions concerning property rights and economic viability.
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4. Design
Translating the theoretical assumptions into measurable variables alone is not sufficient in terms of evaluating
the fairness of REDD+. Even if the theoretical assumptions materialise, this does not necessarily foreshadow an
uneven distribution of the burden and benefits of the scheme under scrutiny. Hence, the objective of this chapter
is to not only finding the appropriate indicators for scaling the attractiveness of investing in REDD+ projects on a
comparative basis, but to also identify the relevant measures for distributive justice. By doing so, the analysis will
be able to test the claim that market equilibrium does lead to an unfair distribution of capital.
On top of these considerations, the principal analysis of the design ought to be devised in a quantitative manner.
This is imperative as the objective of the paper is to scrutinise the distributive justice of REDD+ as an aggregate,
relating it to the discussion of the legitimate management of global public goods. As most data is accessible,
relevant and reliable on the country level (UN-REDD, 2012; World Bank, 2012), the research can be most
articulate on a country basis. Subsequently, a supplementary step will be taken to recapitulate on the findings in
a qualitative fashion.
4.1 Defining the dependent variable
Measuring the REDD+ investment on a country level in a comparative manner involves number of variables.
Comparing forest covers in this regard is not sufficient, as some forests might include more trees with carbon-
absorbing qualities than other forests (Fischer, et al., 2011). It is therefore crucial to take into account the
different levels of carbon stock per country. Hence, this research will calculate the REDD+ investment per metric
tonne carbon stock. With regard to calculating the REDD+ investment per country, this research will take into
account all investments that have come through voluntary carbon market regardless if they derive from private
or public resources. Thus, the dependent variable is conceptualised in the following manner: Y = the total of
REDD+ investment in country A divided by the aggregate of carbon stock in country A. By constructing the
dependent variable in such a fashion, the causal mechanism is able to test the hypothesis that REDD+ capital
will be directed at the more profitable projects and will ignore responsibility and vulnerability.
4.2 Translating indicators for distributive justice into independent variables
Recapitulating literature on vulnerability and responsibility is imperative in order to pinpoint the independent
factors in relation distributive justice. In this analysis, the independent variables relating to deforestation rates,
carbon emissions per capita and income per capita are regarded as crucial to measure the degree of distributive
justice of REDD+. Further is it also important to incorporate the principal objective of REDD+, namely ensuring
the net-protection of the global public good at locations where the net-losses in terms of forests covers are
largest.
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4.2.1 X 1: Deforestation measured in carbon stock change
REDD+ is designed to address deforestation, specifically with regard to carbon absorbing tree covers, to ensure
the preservation of the global public good. Hence, investments should be directed at the most vulnerable carbon
forests. As the locations of the relatively most vulnerable forest covers are often located in regions where other
economic activities relating to deforestation prevail, it is too easy to assume that REDD+ capital is automatically
directed at such forests (Fisher, et al., 2011; Gilbertson, 2010). Current stakeholders might stick to their guns
and refuse to participate in REDD+ activities as this would undermine their current economic activities. Wang,
Stennes and van Kooten (2012, 136-138) establish a correlation between the profitability of economic activities
and levels of deforestation. Therefore will it be easier for REDD+ project developers to establish projects at
locations where there are less economic activities and thus lower levels of deforestation. The lower levels of
opposition will allow the developer to nurture and grow forest covers in a more efficient manner. Hence,
measuring the deforestation rate on a country basis is an imperative element in measuring vulnerability.
4.2.2 X 2: CO 2 emissions per capita
In order to identify responsibility, it is crucial to understand what accountability relates to in association with
global climate change. The contribution to the problem appears to be an approach that is rooted in a common
understanding in terms of who is responsible for global climate change (Grasso, 2011; Page, 2008). Contribution
in this sense relates to the amount of carbon emitted by a certain country (Page, 2008). On the country level, this
translates into the following conceptualisation: the countries that have emitted the least amount of carbon to the
atmosphere should receive more financial assistance (in the form of REDD+ finance) to preserve their natural
assets, in comparison to their dirtier counterparts. This taps into the conviction of distributive justice scholars
that individuals that have emitted the least should also mitigate the least, rather similar to a structure not
uncommon for western European welfare states in which the richest individuals contribute to the well being of
the poor (Kapstein, 1999).
4.2.3 X 3: GNI per capita index
Vulnerability in relation to global climate change on a country level can be measured in many ways. This paper
opted for using a conventional method of measuring vulnerability, namely GNI per capita. Although this
approach denies Sens approach of incorporating non-economic indicators with regard to measuring
vulnerability (Sen, 1999, pp. 28-43), it is important to note that every concept must have a core minimal
definition, which is shared by all users of the concept (Mair, 2008, p. 190). As many institutions and scholars
(see for example: Collier, 2012; UN-REDD, 2012; World Bank, 2012) do not incorporate other conceptions of
vulnerability, GNI per capita is an indicator that is generally perceived as unbiased with regard to measuringdiscrepancies in relation to having the capacity to deal with climate change (Fssel, 2010, pp. 599-602; Grasso,
2011). Another reason for incorporating an income index is that such an index also relates to the adaptive
capacity of individuals (see figure one). This logic includes the inference that there is a positive correlation
between financial means and adaptive capacity (Adger, et al., 2006; Page, 2008).
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Figure five (below) explores how the three indicators of distributive justice are positioned in a causal model. The
causal chain on the left side of the model relates to the set of institutions and regimes that are responsible for
establishing a certain degree of distributive justice. The right side of the model expresses the causal model that
provides an account of the unequal spatiality of capital inflicted by a set of disparate economic drivers that are
yet to be conceptualised.
Figure 5. Illustration of causal relationship between distributive justice and the dependent variable.
X1
Deforestationrate
X2
CO 2 emissionsper capita
X3 GNI index
D I S T R I B U T I V E J U S T I C E
?
?
?
B U S I NE
S S C ON
S I D E R A T I ON
S
Y = REDD+investmentper metrictonne carbonstock
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In contrast of distributive justice parameters, do business considerations provide an account of the neo-liberal
causal narrative that is assumed to be in operation with regard to REDD+. Although the literature reflected upon
in this research thus far provides insightful information on how market-based climate change mitigation projects
unfold on a more abstract level, this research is in need of documentation that accounts for a comprehension on
how investors make their decisions. In other words: what are the considerations of businesses when establishing
or investing into REDD+ project at a certain location? The prime source in this section will be the Cambodiancase study, but also other documents from consultancy agencies, non-governmental organisations and
international institutions will be reflected upon.
4.3 Identifying other independent factors
It is of crucial importance to identify the relative weight of the independent factors that relate to addressing
distributive justice against causal determinants that give an account of economic considerations. In order to do
so, this section aims at identifying operationalise-able independent factors that are considered to be paramount
to private investors when it comes to making investment decisions with regard to REDD+.
4.3.1 Cambodian REDD+ project (confidential)
This section has been removed for reasons of confidentiality.
4.3.2 Relation independent factors with carbon investment literature
This section has been removed for reasons of confidentiality.
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4.3.3 Mitigating confounding factors
Correlation does not equal causation (King, Keohane and Verba, 1995, p. 480). Certain correlative outcomes
might stem from confounding factors that are not incorporated into the research design. For example, the non-
investment of REDD+ capital in country A might be rooted in a government that is unwilling to participate in the
REDD+ scheme for whatever reason. This then leads a low score on the distributive justice scale, by which the
underinvestment in this regard originates from the supply side. This does not necessarily have to be problematic
as the research is interested in the overall distributive justice and recognises the complex and sometimes
incoherent governance architectures. As such, the risk of incorporating a logical fallacy into the research
outcomes is alleviated by means of including confounding factors into the qualitative section of the design
(Gerring, 2012, p. 312). This paper will aim to account for that obstacle by also closely examining a single case
study in addition to the quantitative study. By doing so, potential confounding factors can be identified and
addressed. This is executed by means of revisiting the Cambodian case study subsequent to the quantitative
analyses. Hence, the research is able to amplify the wider context under which the effect materialises.
A couple of prime considerations for businesses to decide to invest in one area, rather than other areas are leftout of the equation as they are meaningless in this design. These considerations include the soft-factors that call
upon the conscious of businesses to not to invest in countries with corrupt regimes or regions subject to
conflict. As these considerations are not part of the causal mechanism under scrutiny, it is fair to consider them
as obsolete (Gerring, 2012, pp. 268-288). As it is crucial to understand that REDD+ is a public-private
partnership, the extent to which business considerations play a role as independent factors might be blurred as
the analyses also incorporates projects that have a more development aid nature. Nevertheless, given the
assumed hybrid nature of the nation-state, neoliberal mechanisms of economic efficiency are deeply
embedded in the institutions of the nation-state (Lipschutz and McKendry, 2011, pp. 370-374).
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4.4 Formalising the research design
Figure six exhibits the conceptualised causal mechanisms of distributive justice and the considerations capital
owners make with regard to making investment decisions within REDD+. The business considerations
hypothesized in the theoretical framework do indeed, to a certain degree, matter to XXX and are therefore
incorporated into the design.
Figure 6. Illustration of the causal relationship between distributive justice, business considerations (independent
variables) and the dependent variable.
D I S T R I B U T I V E J U S T I C E
X1
Deforestationrate
X4
Strength ofprivate land-lease rights
X5
FCI
X6
Legal propertyrights index
B U S I NE
S S C ON
S I D E R A T I ON
S
Y = REDD+investmentper metrictonne carbonstock
X2
CO 2 emissionsper capita
X3
GNI index
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5. Testing the degree of distributive fairness in REDD+
By having identified and conceptualised the relevant causal framework, the latter part of this paper will focus on
sharing the results of the quantitative analysis, which is preceded by presenting the indicators of the causal
model. Subsequently, the results will be discussed in light of other findings and the Cambodian case study. The
complete overview of the data can be found in Annex one.
5.1.1 Constructing the dependent variable
The REDD+ investment per metric tonne is translated into an indicative variable by dividing the total of REDD+
investments by the total carbon-absorbing capacities of forests. The voluntary REDD+ plus database (2012)
accounts for supplying data on REDD+ funding on a country basis. The level of investments accounts for the
period 2006 May 2012. To complete the calculation of the dependent variable, the Tropical Conservation
database is used to estimate the level of carbon stock in living forest biomass (Tropical Conservation Science,
2012). The results are set out in table one.
Table 1. Overview of REDD+ investment per metric tonne on a country base. Data on accumulated REDD+ investment
retrieved from the REDD plus partnership database (REDD plus partnership, 2012). Data on carbon stock in living biomassobtained from the Tropical Conservation Science database (Tropical Conservation Science, 2012).
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The statistical analysis demonstrates that in relation to the dependent variable, the deforestation of carbon
absorbing forests (.16 significance level) and the levels of CO 2 emissions per capita (0.092 percent significance
level) account for the highest relevant statistical correlation. Sample size has a profound effect on tests of
statistical significance. With a sample of sixty people, a correlation has to be at least .25 (in magnitude) to
significantly different from zero (at the .05 level) (Allison, 1999, p. 57). Although Agresti and Finlay (2009) advice
to use the 95% confidence level as a rule of thumb, Allison (1999) points at the difficulties at getting statistically
significant results in small samples. Rather than increasing the p levels to 0.1, researchers should lower the p
level to .01 to allow for the possibility that the p value is underestimated (Allison, 1999, p. 58). Thus, table two
demonstrates that only the negative correlation between REDD+ investments and the contribution to the
problem (CO 2 emissions) comes close to a statistical inference.
However, the low R square the total of the model accounts for an R square of 0.1113 indicates that the
goodness of fit of the two variables within the model is not anywhere near perfection. This means that the
model is deficient in terms of incorporating all the relevant explanatory factors. Hence, other factors, that might
perhaps be rooted in political wheeling and dealing, soft factors such as the reputation of the host country or adhoc decision-making do account for the remaining explanatory factors.
Table 2. Statistical inferences derived from the regressions analysis (B / standardised B in parentheses).
The variables related to GNI per capita and business considerations are in this analysis not relevant. Hence, this
analysis establishes that the statistical significance is too low to conclude with an inference that business
considerations concerning REDD+ investments have played an instrumental role thus far. Even if the statistical
findings would have been included, there appears to be a negative causal relationship between the business
considerations and the level of REDD+ investments. Hence, the statistical results are to a great extent
inconclusive and do not hint at a clear pattern of investments along the lines of the independent variables
derived from the literature.
N = 47 Deforestation CO 2 emissions GNI per capita Land-lease
rights
FCI index Legal property
rights strength
REDD+investmentsper metrictonne
0.048
(0.166)
-0.077
(-0.262)
0.04
(0.016)
-0.015
(-0.066)
-0.088
(-0.104)
0.030
(0.045)
R2 0.041 0.062 0.030 0.013 0.024 0.016
Significance 0.167 0.092 0.936 0.692 0.799 0.404
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5.2.1 Qualitative analysis: Cambodia (confidential)
This section has been removed for reasons of confidentiality.
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5.2.2 Qualitative analysis: other findings and observations
Concerning the data collected for the purpose of the regression analysis, there a number of interesting individual
observations that require some detailed attention. An interesting observation is that China has received more
REDD+ capital than Brazil. This is interesting given that Chinas contribution to the problem exceeds that of
Brazil and that Brazil is far more vulnerable to global climate change than China, to say the least. When
evaluating the literature on REDD+ and China, it is rather interesting to observe the vast amounts of private
REDD+ projects in China (Barr and Sayer, 2012, p. 5). A rather precarious project that stands out is the Sino-
Forest Corporation, which is listed on the Toronto Stock Exchange (Ibid, p. 6). The market capitalisation of all the
REDD+ projects of the Sino Forest Corporation accumulates to USD 5.7 billion according to Morgan Stanley
(Ibid). After suspicions of fraud and malpractice, the Ontario Securities Commission launched an investigation
against the company (Ibid). The findings of this investigation are appalling. The investigators dubbed it the
Madoff moment for commercial tree-planting initiatives in China (Ibid, p. 7). Millions of REDD+ capital that was
directed at reforestation activities ended up in off-shore funds on the Virgin Islands, meanwhile local and
national officials where bribed to affirm the astonishing levels of reforestation of carbon-absorbing forests (Ibid).
Although this case is an extreme example, it does highlight the issue of REDD+ institutions lacking to oversight
the just distribution of REDD+ capital. Thus, the research by Bar and Saver (2012) and the findings in Cambodia
highlight the severe inadequate management on the part of the official REDD+ institutions, perhaps due to the
unwillingness of nation-states to hand-over the control and monitoring of the implementation of REDD+ to the
global level at a centralised institution (Angelsen and Wertz-Kanounnikoff, 2008).
Another interesting case is Burundi. The quantitative analysis identified the Republic of Burundi as an outlier, in
terms of that it has high levels of levels of deforestation, but that the Rebublic of Burundi is also receiving
disproportionate amounts of REDD+ finance, in relation to its African counterparts that demonstrate slightly
lower levels of deforestation. An answer to this puzzle is vested in the fact the World Bank has identified theRepublic of Burundi as a priority (Republic of Burundi, 2010, p. 4) given the alarming levels of deforestation
(Ibid). In response to this issue, many World Bank employees are involved at helping the Republic of Burundi to
become an attractive haven for REDD+ capital. This does indeed also incorporate land-rights reform, given the
accelerating population growth in rural areas (Ibid). The question is however, why does the World Bank address
such a distributive issue rather prominently in the Republic of Burundi, but not in other African states such as
Liberia, Uganda and Zambia? Has this do to with the political willingness to welcome institutions like the World
Bank to interfere with national policies? Or, are public and private parties simply not interested in assisting
Liberia to the degree as demonstrated in the Republic of Burundi?
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6. Conclusions
6.1 Placing the results into the existing literature
The analysis in this research demonstrates that REDD+, in its current format, is partially ill equipped in terms of
devising a mechanism that is able to fairly distribute the burdens of global climate change. A major issue that will
remain problematic with a market-based in REDD+ relates to economic viability. The regions that are most
vulnerable to accelerating levels of deforestation are in sub-Saharan Africa (Fisher, et al., 2011), but that is not
necessarily the region where REDD+ finance is being invested at sufficient levels. The quantitative analysis found
that there is a neglect of countries such as Liberia, Uganda and Zambia with regard to funneling REDD+ finance.
Although REDD+ does account, to some degree, for investing at locations where the levels of deforestation are
highest, and allocation of funds according to the conception of responsibility, the literature that criticised REDD+
for facilitating enhanced inequality is not completely incorrect. The effect found in the statistical analysis could
also hint at a spurious relationship between REDD+ investments and the contribution to the problem (Allison,
1999; Agresti and Finlay, 2009), as previous literature already established a relationship between the location of
the most vulnerable forests and deficient economic development that results in low emission levels of carbon(see for example: Grasso, 2011; Paavola, Adger and Huq, 2006; Robertson 2012).
Going back to the issue of adaptive capacity, i.e. vulnerability, the analysis demonstrates that there is no
identifiable causal link between GNI per capita and REDD+ investments. This can be regarded as a
mismanagement of carbon-absorbing forests when recognising them as global public goods, incorporating
social justice and equality conceptions about the governance of such goods (for example: Baer, 2006; Kapstein,
1999; Leichenko and Obrien, 2006; Sen, 1999). Liberal scholars, appreciating the distributive justice perceptions
of Rawls and Nozick, would point at the net benefits REDD+ delivers to all individuals consuming this global
public good. However, does that legitimise the global climate change regime to ignore the high levels of
deforestation in Zambia (a country that has a low GNI per capita and has a relatively low influx of REDD+ capital
see analysis)?
This research denies the claim that business interests alone determine the allocation of REDD+ capital. Such
business considerations do not play a dominant role (see analysis) and are diminished by the institutions that
currently govern REDD+ at the global level (Corbera and Schroeder, 2010). Although the claims by Bumpus and
Liverman (2008), Harvey (2010) and Lohman (2011) are exaggerated, there is some truth to it. The case study
demonstrates, that although the project developer appears to be considerate with regard to local stakeholders, a
lions-share of the revenues earned by selling carbon credits are funneled back to XXX via XXX. Such post-
carbon credit transactions are not monitored by the involved institutions, and thus is it hard to conclude ifREDD+ capital ends up in the hands of local stakeholders. XXX is aiming at helping local communities to alter
their modes of living and is supporting local development by financing health and education projects. However,
this is not a precondition of REDD+ on the global level, as setting such conditions is the responsibility of the host
country (Thomson Reuters Point Carbon, 2011; United Nations, 2012). For example: Barr and Saver (2012)
highlighted how REDD+ projects in China are relentless cash machines that have no regard for local community
support. Hence, the claim by the UN-REDD regime (2012) and the World Bank (2012) that REDD+ capital will
help local communities to develop is ambiguous.
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The erratic patterns of REDD+ investments indicate an incoherent implementation of the scheme. This is not
surprising given the hybrid nature of REDD+ (Lipschutz and McKendry, 2011). Some projects are commercial,
whereas others can be characterised as development aid. Accordingly, a fair distribution of financial means on a
global scale has not materialised. Projects on an individual basis might be successful in terms of redistributing
the burdens of global climate change, REDD+, as the aggregate of projects, fails as a mechanism to fairly re-
distribute its financial means in an adequate manner.
6.2 REDD+ and the earth system governance context
The research in this paper demonstrated that although the REDD+ scheme is still too a large degree in the
development stage and is subject to a discussion within the international community to finalise the definitive
conditions of the scheme an unequal distribution of the mitigation funds is a paramount issue. The results hint
at an uncoordinated and ad-hoc basis of REDD+ in terms of the fair allocation of capital. REDD+ does not
adequately address fairness nor is it spatially implemented via the routes that capital tends to follow. In relation
to the findings, a call for better steering efforts by the global climate regime is appropriate. Distributive justice
should have a prominent role concerning developing the design of the scheme. This is crucial as governments
and adaptation funds are currently accounting for the lions-share of investments in REDD+, and have thus the
means to address distributive justice. Only USD 123 million of the total USD 497 million provided to REDD+
projects in 2010 derived from the designated VCO markets in which private actors can participate (Hamilton,
Peter-Stanley and Marcello, 2011, p. 26). But, as the maturation of REDD+ involves the complete funding of
REDD+ through the VCO markets, or eventually the CDM markets (Ecosystem Marketplace, 2012), governments
and adaptation funds should accelerate altering the unfair distribution by means of allocating capital to the most
vulnerable. As issues of unequal burden-sharing play an important role within adaptation funds (Grasso, 2011), it
is interesting that issues of vulnerability and adaptive capacity are not given much prominence within the
institutions governing REDD+ (United Nations, 2012; UN-REDD, 2012), given the further incorporation of REDD+
into the private markets and thus the increased attractiveness for private investors to set up REDD+ projects.
The case studies included manifest the difficulties of coordinating a fair distribution of means on the global level.
Some governments are rather active in raising REDD+ finance, whereas other governments are reluctant to do
so. Further does the case study demonstrate that a race to the bottom, with regard to governments offering
investors the best preconditions and the lowest fees, could be a serious threat to the fair distribution of REDD+
finance. This is a conspicuous obstacle in relation to arriving at a legitimate outcome. So, what are the
alternatives? Other options, that have thus far been unexplored, would move the governance of carbon-
absorbing forests away from market-based schemes that are turning trees into tradable derivates. Nordhaus
(2009) is one the many scholars calling for a global carbon tax. Under a carbon tax policy, developing countriesrequire Northern investments in low carbon technologies to reduce the costs of climate change (Nordhaus,
2009, p. 6). Although such an approach would remove the speculative nature of REDD+, a carbon tax requires a
rather strong authoritative body on the international level, with the power to reinforce the protection of forests on
the ground. This is necessary as the economic incentive to destruct carbon-absorbing forests would still be
present. But, the development of such a carbon-tax regime on the global level is rather unlikely, given that: the
failure of countries to adopt the lightest possible nonbinding declaration under-scores the bleak prospects of the
consensus based UN process for responding to climate change (Dimitrov, 2010, p. 22).
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Rather, the global climate change regimes are developing on a more local and national level, but also among
private networks (Doherty and Schroeder, 2009). Pattberg and Stripple (2008) affirm this notion of the growing
complexity of the global climate regime by for example pointing at the C40 cities climate reduction
commitments, corporate responsibility programmes and a diverse range of national policies (Pattberg and
Stripple, 2008, p. 373). It is therefore important to encourage all the actors involved to head in the same
direction, an inclusive body such as REDD+ would have more capacities to do so, rather than the top-downapproach of enforcing a global tax upon everyone. This does not mean that a global tax, without the procedural
constraints, does not have the qualities to address distributive justice issues in a better fashion. The
redistributive capacities of the welfare state to mitigate the inequalities of the consequences of the global
economic system (also a global public good) are a powerful example of why such a scheme is in principle
desirable (Kapstein, 1999; Kaul, 2012; Leichenko and Obrien