REDD+ Financing Instruments & Activity Types Climate Protection Through Forest Conservation in the Pacific Islands Inception Workshop, 22-24 November 2010 Suva, Fiji Dr Sean Weaver, Principal, Carbon Partnership sean.weaver@carbon-partnership.com www.carbon-partnership.com

Scope & Scale MRV Financing Distribution What activities are eligible? How are emission reductions measured? Financing Where does the money come from? Distribution Where do the money & benefits go to?

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements Advantages Disadvantages Financing Where does the money come from?

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements Many grant instruments are designed to help countries become capable of attracting market based finance for REDD activities “REDD Readiness” Advantages Disadvantages Synergies Financing Where does the money come from? National REDD Policy National REDD Strategy National REDD MRV System

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements IPCC Guidelines Advantages Disadvantages Synergies Financing Where does the money come from? “REDD Readiness” National REDD Policy National REDD Strategy National REDD MRV System

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements Advantages Disadvantages Synergies Financing Integrate with national budgets & programmes Certainty on financial resources once secured Where does the money come from?

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements Advantages Disadvantages Synergies Financing Intense competition Limited sources Under-resourced Lots of pledges Fewer deliveries Where does the money come from?

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements Advantages Disadvantages Synergies Financing Private sector source Larger source Combine with grants Flexible Government or private recipients Where does the money come from?

Where does the money come from? Market Instruments Grant Instruments Eligibility Criteria MRV Requirements Advantages Disadvantages Synergies Financing Fluctuating prices Dependent on key international policy developments Where does the money come from? (Not so for the voluntary carbon markets)

Payment for Ecosystem Sercives Market Instruments Grant Instruments Payment for Ecosystem Sercives Strategic Insurance Direct Barter Payment for policies & measures Calculate opportunity costs Estimate on-going management costs Arrive at a reserve price for PES

Payment for Ecosystem Sercives Market Instruments Grant Instruments Payment for Ecosystem Sercives Strategic Insurance The Economics of Ecosystems and Biodiversity (TEEB) Intact Amazon forest: US$1 billion per year (local livelihoods) US$600 million per year (avoided hydro siltation) US$2 billion per year (water cycling)

Payment for Ecosystem Sercives Market Instruments Grant Instruments Payment for Ecosystem Sercives Strategic Insurance Vietnam: Spent US$1.1 million planting 12,000ha of mangrove Saved US$7.3 million on sea defense maintenance China pays farmers US$450 per year per ha replanted in forest for Yangzi river flood mitigation

Payment for Ecosystem Sercives Market Instruments Grant Instruments Payment for Ecosystem Sercives Strategic Insurance Costa Rica pays US$45-US$163 per ha for forest conservation Funded by:- Hydro power company keen to protect its water catchment World Bank 15%surcharge on petrol

Direct Barter Seller Buyer Market Instruments Grant Instruments Payment for Ecosystem Sercives Direct Barter Seller Buyer Carbon stock management MRV Trade Agreement Debt Cancellation Cash Technology Transfer Education…

Payment for Ecosystem Sercives Market Instruments Grant Instruments Payment for Ecosystem Sercives Sectoral No-Lose Targets Time Carbon Stocks Management period Actual Performance Tradable Credits Crediting Baseline BAU + measures but not carbon finance BAU

Sectoral No-Lose Targets Activity Types Sectoral No-Lose Targets Time Carbon Stocks Management period Actual Performance Tradable Credits Crediting Baseline BAU + measures but not carbon finance BAU

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Generate forest carbon units Project Carbon Stocks Project management period Projected Baseline Carbon Stocks Time

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Management period Time

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Source (harvest) Time Carbon Stocks Sink

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management

REDD Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Degradation Time Project Carbon Stocks Baseline Carbon Stocks Project management period

REDD Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Degradation Time Project management period Baseline Carbon Stocks Project Carbon Stocks

REDD Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Degradation Time Project Carbon Stocks Project management period Baseline Carbon Stocks

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Time Project Carbon Stocks Project management period Baseline Carbon Stocks

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Baseline Carbon Stocks Project management period Time

Activity Types Reducing / Avoiding Deforestation Afforestation / Reforestation Improved Forest Management Plant (and replant) an energy crop Baseline Carbon Stocks Time

Activity Types Carbon Negative Activity Carbon Capture (Biochar) Generate renewable electricity biomass gasification Use heat by-product in agricultural drying Plant (and replant) an energy crop Harvest energy crop Harvest energy crop Project Carbon Stocks Baseline Carbon Stocks Time

Activity Types Potentially Carbon Negative Activity Carbon Capture (Biochar) Generate energy carbon units AND Generate forest carbon units Use heat by-product in agricultural drying Generate renewable electricity AND Plant (and replant) an energy crop Harvest energy crop Harvest energy crop Project Carbon Stocks Baseline Carbon Stocks Time