REDD+ as Result‐based Aid: General Lessons and Bilateral Agreements of Norway

• DOI: http://doi.org/10.1111/rode.12271
• Published date: 01 May 2017
• Date: 01 May 2017

REDD+as Result-based Aid: General Lessons and

Bilateral Agreements of Norway

Arild Angelsen*

Abstract

The initiative known as Reducing Emissions from Deforestation and Forest Degradation (REDD+)

off‌icially became part of the international climate agenda in 2007. At that time, REDD+was an idea

regarding payment to countries (and possibly also projects) for reducing emission from forests, with

funding primarily from carbon markets. The initiative has since become multi-objective in nature; the

policy focus has changed from a payments for environmental services (PES) approach to broader

policies, and international funding primarily originates from development aid budgets. This “aidif‌ication”

of REDD+has made the program similar to previous efforts using conditional or results-based aid

(RBA). However, the experience of RBA in other sectors has scarcely been addressed in the REDD+

debate. The alleged advantages of RBA are poorly backed by empirical research. This paper reviews the

primary challenges in designing and implementing a system of RBA, namely, donor spending pressure,

performance criteria, reference levels, risk sharing, and funding credibility. It then reviews the four

partially performance-based, bilateral REDD+agreements that Norway has entered with Tanzania,

Brazil, Guyana, and Indonesia. These agreements and the aid experience provide valuable lessons for the

design and implementation of future REDD+mechanisms.

1. The Evolving REDD+

International support for the initiative Reducing Emissions from Deforestation and

Forest Degradation (REDD+) has increasingly become a form of results-based aid

(RBA). This paper examines f‌ive major challenges in designing and implementing

an RBA system to stimulate developing countries to better conserve their forests.

These challenges relate to donor spending pressure, performance criteria, reference

levels, risk sharing and funding credibility. The paper then assesses how these

challenges are handled in the four initial bilateral REDD+agreements that Norway

entered with Tanzania, Brazil, Guyana and Indonesia. The general RBA

experiences have only to a limited extent been brought into the REDD+debate,

and I examine possible reasons for this phenomenon.

In 2007, the annual Conference of the Parties (COP) of the UN Framework

Convention on Climate Change (UNFCCC) decided to fully integrate forests in

developing countries into the negotiations on a new climate agreement. Under the

heading of REDD or REDD+(which includes carbon stock enhancements),

conserving forests is considered to be critical to limiting global warming to 1.5–2

deg C. Donors have pledged approximately US$10 billion to fund the effort

*Angelsen: School of Economics and Business, Norwegian University of Life Sciences, 

As, Norway, and

Center for International Forestry Research (CIFOR), Bogor, Indonesia. E-mail: arild.angelsen@nmbu.no.

The author thanks the UNU-WIDER ReCom project for the support in undertaking the project, and the

guidance provided by Channing Arndt and Finn Tarp. Constructive comments to earlier drafts were

provided by Odd Arnesen, Jonah Busch, Monica De Gregorio, Erlend Hermansen, Desmond McNeill,

Madelene Ostwald, William Savedoff, Frances Seymour, P



al Vedeld, Sheila Wertz-Kanounnikoff and two

anonymous reviewers. All views are those of the author.

The copyright line for this article was changed on 09 February 2017 after original online publication.

Review of Development Economics, 21(2), 237–264, 2017

DOI:10.1111/rode.12271

©2016 UNU-WIDER. Review of Development Economics Published by John Wiley & Sons Ltd.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike License, which permits use

and distribution in any medium, provided the original work is properly cited, the use is non-commercial and the content is offered under

identical terms.

(Norman and Nakhooda, 2014). The UN REDD+program, along with the Forest

Carbon Partnership Facility, supports readiness activities and the development of

national REDD+strategies in 64 countries.

1

In addition, non-governmental

organizations (NGOs) and other proponents are engaged in hundreds of REDD-

labeled projects at the local level.

REDD+was originally an idea concerning payment to countries and projects for

reduced emissions, with funding primarily from carbon markets. Since then,

REDD+has changed in several signif‌icant and interrelated ways (Angelsen and

McNeill, 2012). First, the initiative has evolved from a carbon focus to become

multi-objective, with livelihoods/poverty, biodiversity, adaptation, indigenous rights

and good governance added as relevant objectives. Second, international funding

now comes primarily from bilateral and multilateral development aid budgets, not

carbon markets. Third, the domestic policy focus has shifted from payments for

environmental services (PES) to broader policies. These changes have been driven

by several factors, including the lack of an international climate agreement with

binding national emission caps (making carbon market funding unavailable), the

numerous challenges of establishing a PES system, and the political dynamics of

REDD+, in which different interest groups have inserted their own agendas into

the global and national REDD+agendas.

Today, REDD+at the international level appears similar to previous efforts

concerning conditional and results-based aid. This “aidif‌ication” of REDD+

(Seymour and Angelsen, 2012) can be explained by several factors. First, large-scale

market funding is unavailable because of the failure to establish a global carbon

market that integrates REDD+credits.

2

Second, many donors were involved in the

REDD-relevant sectors (forest, conservation, rural development, institution

building, etc.), and ongoing activities could, with light modif‌ications, be relabeled as

REDD+and tap into new budget lines. Third, the aid sector already provided a

mechanism and modality to transfer fresh money to REDD+countries. Fourth,

labeling REDD+funding as aid helps donors to achieve international aid targets. In

the case of Norway (and possibly other countries), tapping into aid budgets also has

enabled signif‌icant funding for REDD+, because fresh and reallocated funding from

the aid budget undergoes less scrutiny from the Ministry of Finance compared with

other budgets.

The core idea of REDD+as aid is to apply conditionality and make payments to

countries (and projects) based on performance or results. Conditional aid was part

of the Structural Adjustment Programs (SAPs) from the mid-1980s, led by the

World Bank and the International Monetary Fund (IMF). Although the

disbursement of aid money was supposed to be conditioned on deep policy reforms,

the results of performance-based aid were mixed. “This is indeed the core of what

conditionality is supposedly about—aid buys reform. Unfortunately, it does no such

thing” (Collier, 1997, p. 56). SAPs were replaced by Poverty Reduction Strategy

Papers (PRSPs) in the 1990s, with a softer approach to conditionality. More

recently, this approach has branched off into two alternatives: RBA and a

participatory approach, with “partnership” and “national ownership” as key words

in the latter. Rather than problematize this approach further, I will quote a donor

informant cited in Lie (2015, p. 724) “ownership exists when they do what we want

them to do, but they do so voluntarily.”

The Paris Declaration on Aid Effectiveness (Organisation for Economic Co-

operation and Development (OECD), 2005) calls for more aid to be based on

actual performance or results. RBA and results-based f‌inancing (RBF) has been

238 Arild Angelsen

©2016 UNU-WIDER. Review of Development Economics Published by John Wiley & Sons Ltd.