When people talk on how Indonesia could benefit from carbon trading by using the Reducing Emissions from Deforestation and Degradation (REDD) mechanism, there should be some underlying problems that needs to be clarified before we can utilize the scheme in a beneficial manner.

In principle, we should support any efforts to protect our remaining forests. However, the REDD mechanism is still in the process of negotiation in the international level, and the term REDD should be used carefully.

REDD should not be seen simply as financial grants from developed countries to developing countries in order to conserve the forests. REDD is a financial incentive to keep forests that are at risk from deforestation to be protected in their natural state. In return, the financier will gain carbon credits from the avoided carbon emissions from reduced deforestation and forest degradation.

Currently, commitments from developed countries regarding Indonesia's forests should be seen as pilot projects or demonstrative activities of REDD, not REDD per se. This should be done in order to avoid the confusion with the concurrent international negotiations on REDD with climate forestry activities in Indonesia.

With that in mind, human capacity building is not the only problem of implementing pilot projects of REDD in Indonesia. There are three obstacles that are blocking the road ahead.

First, there is the challenge on which institution should have the upmost authority to regulate REDD activities. The Ministry of Environment is the Indonesian Focal Point for UNFCCC, but the Ministry of Forestry has the authority over forestry activities in Indonesia. In addition, current dealings on climate forestry activities also involve the authority of local governments, such as Aceh and Papua, thus making the problem more complex. This is why a multi-sector approach should be taken rather than a single-turf approach.

Second, land ownership conflicts in forested areas involving indigenous people, corporations, and even government officials are still widespread in Indonesia. The lack of coordination and questionable data results in the overlap of forestry permits with people who depends the forests for their livelihood. This is why designating a forested area for REDD projects should require prior informed consent from genuine local public consultations and should never be dealt single handedly by the government and/or the project developers.

Last but not least, is where the benefit-sharing problem surfaces. The basic premise in REDD is to compensate those who protect the forests with financial benefits. It is too early, however, to judge that the compensation goes directly to the people living near forests to be out of poverty. With the first and second problem being laid out, it seems that everybody wants a piece of the carbon pie. But in the end, is the pie worth it?

Learning from the Clean Development Mechanism (CDM) experience in Indonesia, the operational costs to validate, verify, and certify the reduced carbon emissions involves a large sum of money. Moreover, it also involves tedious bureaucratic processes to ensure the legality of the project. But like it or not, it is compulsory in order to get the financial benefits from the proposed project-based carbon trading mechanisms.

With this fact out in the open, are we sure that poor people living near the forests will really benefit from REDD or other climate-based forestry activities?

Policy makers and those involved in the REDD process must take a cautious step to tip the balance for the welfare of its people. Those who are optimistic on climate forestry mechanism will need to ensure the transparency of the cash flows generated from these projects. The main priority should be to direct the projected cash flow to those who are really in need.

Climate change is never an environmental issue in isolation, because the core of its problems is a development issue. It's also the same if we look at our forests. Don't look at it simply as a venue to offset carbon emissions, but it is also the home for the diversity of the world's species and one of the backbone of the country's economy.

The writer is a research assistant for Climate Change at the Indonesian Center for Environmental Law (ICEL). She can be contacted at This email address is being protected from spam bots, you need Javascript enabled to view it .