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The objective of this report is to explore the topic of carbon sinks in forest ecosystems, focusing on the issue of REDD. The report covers different angles: i) an overview of existing financial and methodological initiatives that currently invest in preparation and capacity building of potential REDD host countries, but also in REDD pilot projects, ii) the preparedness of potential host countries (Bolivia, Cameroon, Costa Rica and Sri Lanka) to establish baselines and implement a REDD system that contributes to sustainable development, and iii) the funding structure and channels of a major investor country (Norway). The focus of our analysis lies on two REDD-related issues; baseline establishment and sustainable development.