Q+A - How U.N.-backed REDD programme works

(Reuters) - Tropical forests play a key role soaking up carbon dioxide, the main greenhouse gas, and regulating the climate. But millions of hectares of rainforests are cut down every year in Asia, Africa and South America every year.

A U.N.-backed scheme called reduced emissions from deforestation and forest degradation, or REDD, aims to reward poorer nations to preserve their forests and to curb the pace of climate change. New data shows that about 10 percent of mankind's greenhouse gas emissions come from clearing and burning forests.

The programme is one point of focus at the U.N. climate talks in Cancun, Mexico November 29-December 10, and REDD is expected to be part of any new global climate agreement from 2013.

Following are some questions and answers about the programme:

WHAT IS REDD?

The United Nations says a value needs to be placed on every tonne of carbon that rain forests soak up and lock away in trees and in the soil.

This could lead to a global market in carbon credits potentially worth $30 billion (19 billion pounds) a year, the world body says., These credits can be used to reward governments and local communities to preserve their forests and to compete against other interests, such as palm oil and pulp and paper firms.

HOW WOULD IT WORK?

Governments, polluting companies and investors in rich nations would buy REDD credits from projects that preserve and protect large areas of tropical forest. In return, the credits would be used to offset a portion of the greenhouse gas emissions in rich nations.

Money from the sale of credits -- mostly to companies who may have to comply with a greenhouse emissions cap -- each representing a tonne of carbon locked away in the forest, would flow to central governments in REDD countries, project investors and local communities for livelihood programmes.

WHAT STILL NEEDS TO BE DONE?

REDD would also recognise steps to boost carbon stocks in a forest, such as replanting cleared areas, sustainable forest management and conservation efforts.

To achieve this, governments in poorer nations need to ramp up and reform their bureaucracies to ensure:

-- Accurate measurements of the carbon stock in a forest above and below ground, particularly for carbon-rich peat forests, to ensure emissions reductions are real.

-- Accurate satellite mapping to monitor any deforestation

-- Laws that clearly define land ownership.

-- Transparent flow of money from the government to local communities.

-- Strong legal system to deal with conflicts over land use.

-- Maps that clearly spell out what is degraded land and what is primary, or untouched, forest.

ARE THERE OTHER CONCERNS?

Yes. A REDD project might halt deforestation in one place but lead to it occurring elsewhere. This is called leakage. To ensure any emissions reductions are real and measurable, a national system of carbon accounting is needed. This is complex but achievable and rich nations under the Kyoto Protocol have developed tools to do this.

Developing nations need assistance to build up their institutions to roll out national carbon accounting systems to create a baseline for emissions and deforestation.

Graft is another concern. Forestry departments are often accused of corruption in granting licenses to clear land for development. For REDD to work, forestry and other ministries need to move new plantations on to existing degraded land, NGOs say.

Some NGOs fear REDD projects will trample on the rights of indigenous communities and that REDD rules at the national level should enshrine those rights. Some countries, such as Bolivia, also fear a market-based scheme would commoditise forests, affecting national sovereignty and local land rights.

WHAT'S ON THE TABLE?

Rich nations such as Norway, the United States and Australia have pledged about $4 billion between 2010-12 to get Indonesia, Brazil, Democratic Republic of Congo and others up to speed by funding pilot REDD projects and strengthening bureaucracies.

In addition, the World Bank, the United Nations, NGOs, private foundations and some banks, have invested in demonstration REDD projects or programmes to build up the capacity to roll out REDD in local communities.

(Editing by Bill Tarrant )