Studies have shown that carbon markets would raise much more money over the long run. But critics say they wouldn't be able to pay countries the seed money needed to get their REDD programs off the ground, and at their worst would allow rich nations to avoid making more costly cuts in their own emissions.
"The financial architecture is not there. Without this part of the equation, we cannot solve the problem," said Suzana Kahn, Brazil's climate change chief. "We need a predictable financial flow. It's different from a simple donation."
Despite offers of funding from Norway, France and others, and expectations that money eventually will come from carbon markets in the US and Europe, Kahn said she has yet to see hard commitments that would fund the program through its first five years.
Another concern is the gangsters and corrupt power brokers associated with deforestation in some countries.
It's "the dirty secret no one wants to talk about," said Joe Saunders, deputy program director at Human Rights Watch. "But until the lack of oversight and conflicts of interest are taken seriously, pouring more money into the leaky system from carbon trading is likely to make the problem worse, not better."
Agus Purnomo, who heads Indonesia's National Council on Climate Change, dismisses the concerns and says existing national laws should be adequate.
"If you have to clear up all the corruption before you can have REDD, then REDD won't be a useful instrument," Purnomo said. "We should not overburden REDD with all these other issues."
Another issue is who gets funding. When REDD negotiations began two years ago, the biggest benefactors were to be several dozen tropical countries where deforestation is worst. But now China, India, Guyana, Costa Rica and others want a share.
Countries that have curbed deforestation without foreign help will ask why they should go on doing so when others are being paid to change their ways, said the World Bank's leading forest expert, Benoit Bosquet.
"It's important that all the forest countries see something it in for them," he said.