Avoided deforestation (AD) has become a global concern with the United Nations Framework Convention on Climate Change (UNFCCC). This paper discusses financial incentive schemes to reduce rates of deforestation and forest degradation in tropical countries may be established and considers some of the issues from the perspective of host countries and the forest-dependent poor. The authors derive a number of policy conclusions including:there are arguments that favour the inclusion of incentives for AD within the climate change conventionany scheme must be flexible enough to address the multiple origins of deforestation (economic, socio-political, demographic and environmental)national policies and processes need to be strengthened to address the root causes of deforestationdonor funding is required to help establish systems for transferring payments from international funds to individuals on the groundinternational oversight mechanisms need set standards for, and monitor the social impact of, avoided deforestation policies. These mechanisms simultaneously need to maintain host nation sovereigntyavoided deforestation might be incentives at the local level, by combining policy interventions and financial incentivesup-front funding will need to be provided to host countries to develop national systems for monitoring and accountingpro-poor appraisal is necessary from the inception stage.

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Limiting land conversion & deforestation