Reducing Emissions from Deforestation and Forest Degradation (REDD) is a set of steps designed to use market/financial incentives in order to reduce the emissions of greenhouse gases from deforestation and forest degradation. Its original objective is to reduce green house gases but it can deliver “co-benefits” such as biodiversity conservation and poverty alleviation. REDD credits offer the opportunity to utilize funding from developed countries to reduce deforestation in developing countries.

“Reducing emissions from deforestation and forest degradation” implies a distinction between the two activities. The process of identifying the two is what raises questions about how to measure each within the REDD mechanism, therefore their distinction is vital. Deforestation is the permanent removal of forests and withdrawal of land from forest use. Forest degradation refers to negative changes in the forest area that limit its production capacity.

In recent years, estimates for deforestation and forest degradation were shown to account for 20-25% of greenhouse gas emissions, higher than the transportation sector. Recent work shows that the combined contribution of deforestation, forest degradation and peatland emissions accounts for about 15% of greenhouse gas emissions, about the same as the transportation sector. Even with these new numbers it is increasingly accepted that mitigation of global warming will not be achieved without the inclusion of forests in an international regime. As a result, it is expected to play a crucial role as a future successor to the Kyoto Protocol.