Policies to Reduce Emissions from Deforestation and Degradation ...

against which to compare the actual deforestation rate. National baselines would also be necessary
to determine if leakage occurred, meaning that reducing deforestation in the project site
caused an increase in deforestation in other forests. The number of credits generated would have
to be adjusted to account for that leakage.
Some proposed REDD policies require a global baseline against which national baselines could
be compared (Mollicone et al. 2007). To create incentives for both (a) countries with high deforestation
rates to reduce their rates of forest conversion and (b) countries with low conversion rates
to maintain them, Mollicone et al. (2007) suggest a global reference rate. 10 In their scheme, for
countries in category (a), credits are generated by decreases in national rates of deforestation; for
countries in category (b), credits are based on the difference between the global reference rate and
the national rate (Figure 3.2). Mollicone et al.’s (2007) global reference rate would be a component
of a REDD policy based on national-level commitments.
Data for Setting Baseline Deforestation Rates
Remotely sensed data from aircraft and satellites dating back to the early 1990s are sufficient to
measure changes in forest area with confidence (DeFries et al. 2006; Mollicone et al. 2007). Although
data to set national and international forest cover baselines are available at relatively low
cost, information on carbon stocks and forest inventories is not uniformly available. Degradation
baselines are possible in some regions where information is available.
Maintaining Equity, Encouraging Participation, and Reducing Risks
The baseline scenarios that will be advantageous, and thus politically preferable, to a country will
depend on its historical and current patterns of deforestation. In all cases, deforestation is occurring
within the context of natural cycles that affect forest cover. Therefore, any baseline that draws
on historical rates must consider a large enough period to distinguish natural variation from anthropogenic
forest change.
Using historical data from a defined period (such as 1990 to 2000) will avoid perverse incentives
to increase short-term deforestation in anticipation of establishing baselines but might not
capture current deforestation rates and trends. On the other hand, some countries may have faced
historically low rates of deforestation because of political unrest (such as Democratic Republic of
Congo and Colombia) but face deforestation pressure in the near future if the political situation
stabilizes. However, using recent and projected rates of deforestation to create baselines would
penalize countries that have successfully implemented forest conservation policies (such as Costa
Rica) and reward those with weak governance institutions. This tension between helping the laggards
and rewarding the leaders is a fundamental trade-off in all market policies. Although the inclination
is to reward leaders for conserving their forests, doing so through the issuance of tradable
carbon credits could lead to environmental harm because it would allow more carbon to be
emitted than under BAU scenarios.
The capability exists to set objective baselines, but doing so might discourage participation.
On the other hand, a negotiated liberal baseline that is more subjective might generate hot air and
credits that are not the result of real reductions in emissions. Pfaff and Kerr (2007) argue that accurate
baselines are essential to ensuring environmental integrity because both the seller and the
Policy Design Issues 43