Charlotte Streck

• A corporate appetite for greenhouse gas reduction from nature-based solutions, in general, and REDD+, in particular, is driving a rapidly growing voluntary carbon market. The interest to invest in solutions that avoid or reduce deforestation holds the potential to significantly support national efforts to achieve the Paris Agreement’s temperature goals. However, controversy over leakage coupled with confusion and insufficient understanding of spill-over and displacement effects risk holding back necessary investments. This article seeks to shed light on different concepts surrounding leakage, including underlying dynamics and possible solutions on how to address them. In doing so, it makes the case for integrating avoided deforestation projects into national REDD+ strategies and highlights the need for a multi-level and multi-actor approach towards REDD+. Leakage occurs at all levels of implementation of REDD+ activities, at the project, programme and policy level, and both within and beyond national boundaries. Local leakage canA corporate appetite for greenhouse gas reduction from nature-based solutions, in general, and REDD+, in particular, is driving a rapidly growing voluntary carbon market. The interest to invest in solutions that avoid or reduce deforestation holds the potential to significantly support national efforts to achieve the Paris Agreement’s temperature goals. However, controversy over leakage coupled with confusion and insufficient understanding of spill-over and displacement effects risk holding back necessary investments. This article seeks to shed light on different concepts surrounding leakage, including underlying dynamics and possible solutions on how to address them. In doing so, it makes the case for integrating avoided deforestation projects into national REDD+ strategies and highlights the need for a multi-level and multi-actor approach towards REDD+. Leakage occurs at all levels of implementation of REDD+ activities, at the project, programme and policy level, and both within and beyond national boundaries. Local leakage can largely be controlled through project design that analyses and addresses the proximate causes of leakage and underlying drivers, however, leakage is more difficult to avoid at the programme or policy level. Market leakage is particularly complex and harder to manage, but can – to a certain extent – be modelled and accounted for. Successful REDD+ efforts will combine demand-side measures with national or jurisdictional programmes that support governance reforms and integrate local investments in nature-based solutions and avoided deforestation projects. Key policy insights Emissions leakage is a ubiquitous phenomenon in climate mitigation that occurs at all levels of implementation. However, it is of particular concern in the case of REDD+, where reduced deforestation in one geographical area can lead to an increase in forest loss in another area. Leakage has to be managed and monitored at different scales: locally through avoided deforestation projects that address local drivers of deforestation; nationally through well-designed REDD+ policies; and internationally, among others, through demand-side standards in countries importing forest-risk commodities. Larger-scale programmes that link government interventions with efforts to eliminate deforestation from commodity supply chains, conservation efforts and avoided deforestation projects can limit leakage while helping to integrate various conservation and financing strategies. ‘Nesting’ of avoided deforestation projects into larger REDD+ programmes, at sub-national or national scale, allows for the integration of greenhouse gas accounting across different scales of implementation.…