Carbon

Forest

Carbon,

Cash&
CrIMe

The Risk of CRiminal engagemenT in ReDD+

global wiTness sepTembeR 2011 1

Summary
Alarm bells are ringing. [REDD+] is simply too big to monitor. The potential for
criminality is vast and has not been taken into account by the people who set it
up… Fraud could include claiming credits for forests that do not exist or were not
protected or by landgrabs. It starts with bribery or intimidation of officials… if there
are indigenous people involved, there’s threats and violence against those people.
Peter Younger, Environment Crimes Specialist, Interpol
Quoted in the Guardian, UN’s forest protection scheme at risk from organised crime, experts warn, 5 October 2009

Corruption in the forest sector has until now been
overwhelmingly linked tologging, both illegal and
legal, which in many countries has led to significant
depletion of valuable tropical forests. But today
incentive mechanisms such as REDD+, intended to
compensate governments, communities or other groups
in developing countries for reducing forest loss, are
beginning to change the face of corruption in the sector.

natural forest ecosystems and biodiversity anddeliver
development benefits, especially for forest communities.
Governance is key to the effective implementation and
delivery of the intended outcomes of REDD+ - from
international to grass roots level. A well-designed
governance system is also needed to address the
substantial risks of corruption and criminal involvement
that are posed by REDD+.

While corruption and illegality inlogging continue to be a
significant international problem, the potential for future
REDD+ earnings is bringing about new corrupt practices,
starting with cases of land grabs. REDD+ is also likely to
lead to new forms of corruption not previously seen in the
forest sector, such as questionable carbon accounting
and manipulation of forest carbon measurements. The
recognition of ‘carbon’ as acommodity to be measured
and paid for creates a number of new opportunities for
corrupt activities, since forest “carbon” is an intangible
asset that is difficult to measure and relies on complex
calculations that can be manipulated.

Significant sums of money are involved: the REDD+
mechanism is expected to require an estimated US$1733 billion every year, equivalent to up to a quarter of
OECDaid flows in 2010,1 much of which will be pumped
into forest-rich developing countries.2 Some of this
money is already being paid out for preparation and pilot
activities. For the most part, however, these forest-rich
countries suffer from weak regulation and governance.
More than 80% of countries currently receiving REDD+
funds fall into the bottom half of countries assessed for
Control ofCorruption by the World Bank. Past attempts
to tackle forest loss in these countries have mostly failed,
undermined by policy failures, perverse incentives and
corruption. Given the large sums of money involved,
there is also a substantial risk that criminal elements,
including state actors, will undermine REDD+ and
prevent it from achieving its overall objectives.

Alongside the familiarrisks of criminal activity encountered
with such large financial flows – for example fraud, bribery
and tax evasion – REDD+ poses some specific risks. These
include increased illegal logging, linked to law enforcement
capacities being stretched by the need to police additional
forest protection efforts, illegal land grabbing, the theft and
misappropriation of REDD+ funds, the manipulationof
carbon measurements to exaggerate results and increase
payments, and poor regulation of carbon markets.
With the right national and international frameworks,
plus sufficient funding, REDD+ is an unprecedented
opportunity to address climate change, as well as protect

So far there is also a serious funding gap. Only
US$5 billion has been pledged by rich countries3
and it is unclear...