The document discusses Reduced Emissions from Deforestation and Degradation (REDD), an international mechanism to incentivize reducing deforestation rates in developing countries. REDD has the potential to provide large financial benefits but also risks. It may reward countries with historically poor forest management. Ensuring benefits reach small producers and rural poor communities presents governance challenges. While REDD could fund shifts to more sustainable forestry and agriculture, strict rules may disadvantage small producers. Careful program design is needed to balance environmental, economic and social objectives.