Reducing greenhouse gas emissions from deforestation and forest degradation (REDD+) schemes, considered a key means of mitigating climate change, is being comprehensively implemented in a few countries. However, the issue of social equity requires serious consideration to ensure their sustainability. We assessed performances in implementing a REDD+ project during its demonstration phase (2013–2018) in five villages in the northern mountainous region of Lao People’s Democratic Republic, inhabited by people of the predominant Khmu and Hmong ethnicities. The evaluation covered actual land-cover changes (revealed through satellite imagery) and social changes and income generation assessed through a questionnaire-based survey. Prior to the implementation of the REDD+ demonstration project, natural resources varied across the five villages, whose social characteristics were closely linked to these resources. After the project’s implementation, income generation varied significantly among the ethnic groups and across village types according to determined land allocation and each ethnic group’s characteristics relating to the adoption of new and alternative livelihoods. The results of a canonical discriminant analysis using explanatory variables indicated that 77.3% of the initially categorized respondents were correctly classified for the ethnic group variable, and 70.1% were correctly classified for the village types variable within the village cluster targeted in the project. The results showed that rural people who depend on natural resources vary in their capabilities to transition to alternative livelihoods. Traditional livelihoods and social conditions, entailing capabilities and functions for implementing alternative livelihoods were closely linked to land and forest management outcomes. Levels of performance in implementing activities aimed at reducing deforestation and forest degradation evidently differed among rural groups and villages. Moreover, our findings indicated that to avoid implementation difficulties and to keep equity, the village-level REDD+ should be informed by the specific features and capabilities of rural people within each village, thereby reducing the risk of unsustainable REDD+.
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