Deforestation and degradation (DD) have re-emerged in the last two years as key issues on the international environmental agenda. This is largely due to the links between DD and climate change. Human induced climate change is caused partly by the emissions of greenhouse gases, such as carbon dioxide, into the atmosphere (IPCC 2007). Deforestation and degradation can lead to emissions of carbon dioxide from carbon stored in trees when they are burnt or decay, or from soils when they erode or dry out.

Because of these connections between DD and climate change, interest in developing international mechanisms to reduce DD rates has been growing. In particular, discussions are underway on incorporating incentive mechanisms in which developed countries pay developing countries to reduce DD rates, into a future UN climate regime (beyond 2012). Such systems may be linked to carbon markets in a similar way to existing flexible mechanisms under the Kyoto Protocol or they may exist separately under either voluntary or regulated regimes.

The objective of this paper is to investigate these issues as far as possible at this stage. It does this by unpicking the main ‘design’ elements of REDD that are being discussed and using existing evidence from the forestry, climate and development literatures to try to understand more about the potential implications of these for the poor. It focuses on generic implications across countries but uses case study material to illustrate how these might vary in different country contexts. Using this evidence it outlines possible approaches for developing REDD mechanisms that work better for the poor which can be used by policy makers, donors and NGOs.