Institutional approaches for carbon financing in the forest sector: learning lessons for REDD+ from forest carbon projects in Uganda

With momentum building around the implementation of REDD+ programmes and projects, questions surrounding the appropriate structuring of institutions are becoming increasingly important. We examine how the variations in the institutional arrangements related to the carbon finance aspects of projects affect the opportunities for poor rural producers involved, or those living in the vicinity of projects. Evidence is drawn from a review of three forest carbon projects in Uganda, based on qualitative stakeholder interviews and supported by policy documents and literature. Three aspects of project institutions are discussed; actors, rules and links to existing external institutions. The findings suggest that supporting such projects with carbon finance can have some positive impacts on opportunities through improved monitoring, but that considerable progress needs to be made in balancing the interests of project financers with those of the communities involved and improving policy coordination with existing institutions external to projects. We suggest that these lessons are particularly transferable to the growing number of REDD+ approaches that are strongly performance based or funded through carbon markets, and implemented through direct payment systems between buyers and local producer groups or individuals.

Research highlights▶ Using carbon finance for REDD+ introduces new actors and rules in the forest sector. ▶ The types of actors and rules affect the distribution of costs and benefits. ▶ Approaches are needed to balance strong external interests and rule establishment.