Building trust in forest carbon payments (REDD+): Learning from the world of financial accounting
Over a third of the carbon mitigation needed annually to keep global temperature rise below 2°C could be met by reforestation and reducing global deforestation. Expectations for the concept of REDD+, which aims to incentivise developing countries to keep forests standing, were initially very high. However, the mechanics of implementing REDD+ proved very difficult and its early problems were broadcast very publicly. This led to a lack of trust between many of the actors trying to design and scale REDD+ and its intended beneficiaries. Given the recent and upcoming decisions from the Green Climate Fund and the International Civil Aviation Organization about REDD+ results-based payments, now is a crucial time to overcome this lack of trust to scale up REDD+ investment. This paper argues that REDD+ actors can learn from financial accounting, which has played a key role in maintaining investors’ confidence in mainstream capital markets. It uses the key characteristics of financial accounting to make recommendations for how accounting of REDD+ impacts can evolve to build greater trust.