This report summarizes the key drivers of deforestation and forest degradation, and the key policy options available to reduce the resulting carbon emissions. It reviews current deforestation rates and the associated issues related to monitoring forest-based carbon emissions and establishing baselines. The findings of research into the direct and underlying causes of deforestation and degradation provide a basis for outlining REDD policy options, while highlighting the associated challenges. Analysis suggests that policies will need to address diverse local situation and include economic, regulatory and governance reforms.