When the Kyoto Protocol was being debated in 1997, greenhouse gas emissions from land use change – the vast majority of which are from deforestation – were largely ignored.

Negotiators were unaware of the scale of the emissions because they did not know how to calculate the amount of carbon emitted or saved. Many also felt enforcement would be extremely difficult because of the lawless nature of many forested regions, such as the Congo basin and Indonesia. So, only reforestation and afforestation, or planting new trees, were included in the final agreement.

Eleven years on and the situation could not be more different. It is now accepted that land use change causes some 20 per cent of total emissions. The United Nations estimates deforestation is occurring globally at a rate of 13m hectares a year – or almost 50 football pitches a minute.

At the UN’s climate change conference in Bali last December, it was recognised that since this sector was too large to be ignored. As a result, forest nations, particularly in the developing world, would have to be rewarded for not cutting down trees, even though initially this would mean rewarding people for simply not breaking the law.

Scepticism abounded at Bali, however, about whether it was possible to develop the mechanisms for Redd (reducing emissions from deforestation and degradation).

Ralph Ashton, convenor of the Terrestrial Carbon Group, a collection of experts studying the subject, says that in the past eight months those doubts have been dispelled.

“We’ve moved from discussions on whether the world should include forests in the post-Kyoto framework through ’can we?’ to ’yes, we can but how should it be done?” he says.

There are four main technical issues: measuring how much carbon is in land and vegetation; how to draw a baseline from where future emission reductions would be calculated; how to prevent leakage (such as simply pushing illegal loggers to neighbouring forests); and how to demonstrate that emission reductions really have been made and are permanent.

Proving more contentious is the future financing framework. Lord Nicholas Stern, the British economist who wrote a groundbreaking report on the economics of climate change, estimates that $10bn-$15bn a year will be needed to finance avoided deforestation. This sounds like a large sum, but in terms of the cost per tonne of greenhouse gases saved – about $5 – is much cheaper than most other sectors, such as power generation.

Many governments and experts echo Penny Wong, Australia’s climate change minister, who said last month: “Carbon markets are the only mechanisms capable of mobilising investment on the scale needed to provide incentives for developing countries to reduce emissions from deforestation and forest degradation.”

Brazil is responsible for the most emissions from land use change after Indonesia, and is the staunchest opponent of this view. It fears that linking Redd to markets would enable developed nations to avoid cutting their own emissions by simply buying avoided deforestation carbon credits.

Instead, it wants a large pool of money to be available to forest nations that can demonstrate reduced deforestation rates. Also, forest nations such as Panama that, unlike Brazil and Indonesia, are managing to prevent clearing are insisting that they should be rewarded for not breaking the law.

Also of concern to many non-governmental organisations is the extent to which the billions of dollars from credits will reach the estimated 60m people who live in the forests and are likely to see their livelihoods most affected.

Emily Brickell, a Redd policy expert for the World Wide Fund for Nature, an environmental organisation, says: “For Redd to work there have to be social safeguards, environmental safeguards and robust, measurable carbon benefits.”

The good news is that negotiators appear to be making progress. Ms Brickell says that at negotiations in Ghana last month many countries were being extremely constructive. “There have been clear proposals from a lot of the [countries],” she says. “We felt that [negotiators] were showing willingness to discuss issues rather than just make statements.”

The next step is for Redd pilot projects to be developed and this has already begun in many countries. But Mr Ashton warns it is too early to celebrate. “I’m not completely confident that there will be any meaningful public progress over the next year because terrestrial carbon is so tied up in the end game, which is going to be done in Copenhagen in December 2009,” he says. “You’ll see some coalescence of views but not necessarily in the public sphere because nations will use it as a bargaining chip against other parts of the overall framework.”