Policy for pro-poor distribution of REDD+ benefits in Mexico: How the legal and technical challenges are being addressed

There have been many calls for ‘pro-poor’ distribution of REDD+ benefits. Although international payments will be granted to participating countries strictly based on their carbon performance, this will not necessarily be the case for benefit-sharing at local levels. In this paper we analyse the technical and legal constraints to the development of ‘pro-poor’ benefit distribution systems, using the prototype scheme of Mexico as an example. There are two distinct types of carbon impacts in REDD+: avoided/reduced emissions and carbon sequestration/removals. From a legal perspective it is possible to link the ownership of carbon stocks and enhancements in forests to the legal owners of trees and land, thus enabling them to participate in carbon markets to trade carbon credits for sequestration/removals. However, we argue that it is not possible to create exclusive property rights over avoided/reduced emissions since they are counterfactual; they have no legal existence; moreover deforestation is illegal in Mexico without a land use change permit, and to pay for not deforesting would be tantamount to paying people not to commit a crime. In order to share the financial benefits derived from avoided/reduced emissions, the principle of fair compensation to those producing environmental benefits can however be used. The funds resulting from avoided/reduced emissions, assessed at national level, will be used by the government for investments at the local level in activities which directly or indirectly lead to more sustainable territorial development within communities, via up-front payments for efforts rather than ex-post rewards for carbon results. Although results-based benefit distribution systems in REDD+ can be defended on grounds of environmental effectiveness and cost-efficiency, they have a much higher probability of systematically excluding vulnerable groups, in comparison with effort-based strategies. Mexico's effort-based approach to the finance of initial REDD+ activities has the potential in principle to be a pro-poor instrument, but up to now, specific interventions to target vulnerable groups have not been implemented, nor have adequate guidelines been developed to promote an inclusive local distribution of benefits.