**5. Implementation of REDD+ in relation to risk, financing, and implementation strategies**

The occurrence of deforestation and forest degradation, especially in developing countries, has accounted for nearly 20% of global GHG emissions. From various literatures, it can be used to limit the impacts of climate change in which the global community is able to cope with stabilizing the average of 20°C. REDD is an attempt to evaluate the value of carbon stored in forests and offer incentives for developing countries that have managed to reduce emissions from forest land and invest in low-carbon paths for sustainable development. The scope of REDD is then expanded by incorporating conservation roles, and increasing forest carbon stocks (REDD+). Implementation of REDD+ related to the Principles of National Approach and Sub-national implementation can be effectively applied to reduce the emissions if each stakeholder can make efforts to reduction of carbon emissions.

For the development of REDD+ activities, the commitment itself is highly dependent on the management of applied management in order to overcome the uncertainties in the field leading to the termination of commitment or non-permanence. This is due to the high competitiveness of land-based commodities around REDD+ sites. Competitiveness itself is influenced by the cost borne by the developer. Of course for developers to keep that commitment very closely related to how to get certainty to get REDD+ financing. As to the certainty of financing, the strategies that can be applied to maintain the commitment can be divided into two, viz. the institutional and distribution funding aspects. Institutional aspects include the strategy of enacting REDD+ sites as protected areas, implementing adaptive payment schemes that are a combination of input and performance-based mechanisms and buffer provision as a guarantee, and optimization of co-benefits. The funding distribution aspect includes the use of an existing funding channel, through government channels or fiscal transfers, the establishment of a new and verifiable government funding agency REDD+ and verification by a third party. With regard to transaction costs, the first and second strategies are believed to be lower than the third strategy.

Success of the cap-and-trade scheme relies heavily on strict but feasible constraints that reduce emissions over time. If the cap is too high, excess emissions will enter the atmosphere and the scheme will not affect the environment. A high cap can also decrease the value of benefits, causing losses to firms that have reduced their emissions and banked credit. If the cap is too low, its allowances are scarce and too expensive. Some cap-and-trade schemes have a safety valve to keep the value of allowance within a certain range. If the allowance price is too high, the scheme's governing body will release additional credits to stabilize the price. The price of allowances is usually a supply-and-demand function. Credits are similar to carbon offsets except that they are often used in conjunction with a cap-and-trade scheme. Firms wishing to reduce the targets can fund pre-approved emission reduction projects on other sites or even in other countries. From the above description, carbon trading is actually a clever set of ideas that utilize market mechanisms that have been sharpened from generation to generation in capitalist economy. Of course, this will allow some investors to make serious money, and it fits with the adverse risks in the midst of current politics. Furthermore, these ideas will change our greenhouse gas emissions because, in time, it will be too expensive to release greenhouse gases. Unfortunately,

no one is really sure if carbon trading will be able to change it fast enough [25].

**5. Implementation of REDD+ in relation to risk, financing, and** 

stakeholder can make efforts to reduction of carbon emissions.

The occurrence of deforestation and forest degradation, especially in developing countries, has accounted for nearly 20% of global GHG emissions. From various literatures, it can be used to limit the impacts of climate change in which the global community is able to cope with stabilizing the average of 20°C. REDD is an attempt to evaluate the value of carbon stored in forests and offer incentives for developing countries that have managed to reduce emissions from forest land and invest in low-carbon paths for sustainable development. The scope of REDD is then expanded by incorporating conservation roles, and increasing forest carbon stocks (REDD+). Implementation of REDD+ related to the Principles of National Approach and Sub-national implementation can be effectively applied to reduce the emissions if each

For the development of REDD+ activities, the commitment itself is highly dependent on the management of applied management in order to overcome the uncertainties in the field leading to the termination of commitment or non-permanence. This is due to the high competitiveness of land-based commodities around REDD+ sites. Competitiveness itself is influenced by the cost borne by the developer. Of course for developers to keep that commitment very closely related to how to get certainty to get REDD+ financing. As to the certainty of financing, the strategies that can be applied to maintain the commitment can be divided into two, viz. the institutional and distribution funding aspects. Institutional aspects include the strategy of enacting REDD+ sites as protected areas, implementing adaptive payment schemes that are a combination of input and performance-based mechanisms and buffer provision as a guarantee, and optimization of co-benefits. The funding distribution aspect includes the use of an existing funding channel, through government channels or fiscal transfers, the establishment

**implementation strategies**

14 Renewable Resources and Biorefineries

Actually, REDD+ can be an effective incentive mechanism and efficient in reducing emissions. The incentives in question are benefits derived from REDD activities in the form of financial support and/or technology transfer and/or enforcement. Thus, the incentive scope may be in the form of monetary or non-monetary incentives. The success of running REDD+ is very much in line with the policy used for the expenses incurred. In other words, the scope of activities in REDD+ implementation for the purpose of reducing carbon emissions will definitely bring other benefits such as co-benefits, environmental services, forest sustainability, biodiversity, etc. However, the performance of REDD+ implementation is measured by looking at the ability of developers in reducing carbon emissions. This problem is related to the amount of carbon emission reductions generated through the measurable, reportable, and variable (MRV) system.

In addition, REDD+ also has negative impacts such as reduced public access to forest resources, reduced forest industry investment, and reduced forest sector economic contribution. The pressure on the existence of forests takes place in various forms of activities such as encroachment, illegal logging that occurs as a result of low socioeconomic conditions of people or below the poverty line. Pressure on REDD+ sustainability will certainly increase as commodity prices increase and as lands are used for agriculture, plantation, mining, etc. These pressures need to be considered as they relate to lower REDD+ competitiveness compared to other land-based commodities such as palm oil, coconut, and mining. This is indicated by the price per ton of carbon that must be applied to compensate the costs of other businesses such as oil palm and rubber plantations. The competitiveness of REDD+ can also be low again due to the high transaction costs that must be incurred. The high cost of such transactions is usually due to the lengthy process of issuing and trading certificates of reducing forest carbon emissions. Transaction costs in the production process are undesirable costs because the existence of these transaction costs makes commodity prices inefficient as prices become more expensive and tradable goods become less.

It should be emphasized, however, that transaction costs in REDD+ implementation are costs that must be taken into account. This is related to institutional costs inherent in REDD+ implementation, at least cost for contracting, searching and disseminating information, handling conflicts of interest that occur between stakeholders, validation and verification activities, and certification of emission reduction and credit buffer in case of leakage and non-permanence. The transaction costs will also increase in line with the intensive coordination between stakeholders involved as an effort to avoid conflict between stakeholders [27]. The effect of transaction costs on the price and quantity of carbon is presented in **Figure 1.**
