Timing of payments or benefits: When are benefits distributed?

The timing of benefit distribution – at the beginning of a project, at agreed intervals of the project or based on adequate performance (e.g., number of tons of carbon saved) is crucial to the success of REDD+.

There are discussions on whether payments should be provided in interims or in full. Evidence from PES and certification and standards programmes suggests that up-front payments that are not results-based can be effective at the local level, as up-front payments have enabled wider participation in the programmes, including among poorer stakeholders, and helped to mitigate some of the risks and costs involved (Loft et al. 2014[1]; Tjajadi, Yang, Naito and Arwida 2015[2]). There is also support for the idea that regular payments based on agreed performance benchmarks or interims can motivate participants to maintain their commitment to programme objectives. While this approach will increase the overall costs, one might also argue that it is better to pay twice for a result than to pay once for no result (Angelsen 2017[3]). If payments are not carefully considered and phased in accordance with the aim and lifetime of a project, payments may still risk jeopardizing the expected project results.

In the Xmabén and La Mancolon communities in Campeche, Mexico, the payments for REDD+ programmes were planned as incentives disbursed ex-ante to cover incremental costs. REDD+ activities were not supposed to provide further net economic benefits to local people, except those that would potentially be accrued from their implementation, such as timber, non-timber forest products, water quality and bushmeat. While the local people preferred individual monetary benefits disbursed ex-post in a single annual instalment, they were also willing to accept in-kind benefits disbursed ex-ante, but only as a means of supporting individual agricultural activities. Still, the community’s support for another programme, one that includes individual monetary support disbursed monthly, suggests that there would have been greater support for the REDD+ programmes had the timing of the distribution of benefits aligned with that of the participants’ preferences (Špirić et al. 2021[4]).

Further readings

[1] Loft, L., Pham, T.T., Luttrell, C., 2014. Lessons from Payments for Ecosystem Services for REDD+ Benefit-Sharing Mechanisms. Center for International Forestry Research (CIFOR).

[2] Tjajadi, J.S., Yang, A.L., Naito, D., Arwida, A.L., 2015. Lessons from environmental and social sustainability certification standards for equitable REDD+ benefit-sharing mechanisms. Center for International Forestry Research (CIFOR).

[3] Angelsen, A., 2017. REDD+ as Result-based Aid: General Lessons and Bilateral Agreements of Norway. Rev Dev Econ 21, 237–264.

[4] Špirić, J., Merlo Reyes, A.E., Ávalos Rodríguez, Ma.L., Ramírez, M.I., 2021. Impacts of REDD+ in Mexico: Experiences of Two Local Communities in Campeche. SyA 1–33.