An initiative of the ACP Group of States funded by the European Union Global Climate Change Alliance: Intra-ACP Programme Training Module Climate Change Finance Module 6 – Introduction to REDD Ms Isabelle Mamaty Senior Expert Climate Support Facility

Module Structure  REDD in international negotiations  REDD implementation challenges  REDD funding resources 2

Role of Forests in Climate change  Forests are causes of climate change through its deforestation and sources of mitigation climate change as sinks of GHGs.  Forest destruction and land use change accounts for 24% of GHG emissions and loss of biodiversity  Forests are a natural store of CO 2  Activities reducing deforestation are cost effective ways of reducing GHG emissions 3

Forests in international negotiations  Emissions from forest and (land use) not included in the Kyoto Protocol  COP 11 in Montreal in 2005: First discussion  COP 13 -Bali Roadmap in 2007: agreement on a decision to reduce emissions from deforestation during COP 15.  COP15 Copenhagen: Accord 2009  Cancun 2010: recognition on the need to halt (and not only reduce) deforestation  Next COP 2012: Issue still under discussion at international level 4

REDD Concept Evolution  Basic idea is to create a financial value for the carbon stored in forest  RED stands for Reduction emissions from Deforestation (Montreal and Nairobi )  REDD stands for Reducing emissions from Deforestation and forest Degradation (Bali, 2007)  REDD+ includes REDD Forest conservation + Sustainable management of forests + Enhancement of forest carbon stocks (Bali & Poznan )  REDD++is for REDD + Land use for agricultural activity  REDD “readiness" concerns efforts made by a country with the support of multilateral or bilateral initiatives to build its capacity to be ready for a REDD + mechanism (Copenhagen, 2009)

REDD key Challenges  Reference levels  Leakage  Permanence  Safeguards  Governance  Measuring, reporting and verifying (MRV)  Finance 6

Reference levels  Reference levels issue raises the question of when (and how) to start crediting emission reductions?  There is no agreed formula for how to set reference levels (baseline): o Historical baseline : rate of deforestation and degradation (DD) and the resulting CO2 emissions over the past years o Business as usual (BAU) scenario: how would emissions from DD evolve without the REDD activity o Crediting baseline (i.e like an emissions quota) 7

Leakage  Leakage is the phenomenon in which efforts for reducing emissions in one place shifts them to another location or sector where they are uncounted and perhaps uncontrolled  Many points are under consideration for dealing with leakage such as:  Monitoring impacts within and outside project boundaries  Attribution of market leakage (estimate international leakage)  National versus project-level: how large are the leakage risks? 8

Permanence  Permanence generally addresses the extent to which forest can permanently store carbon  Ways of dealing with the permanence issue:  Under CDM, the issue is currently resolved via the use of temporary credits (t-CERs), that must be replaced at the end of their certified period : This makes land-use based carbon credits comparatively LESS attractive  Joint implementation (JI) and many voluntary instruments do not use this concept of tCERs but address permanence through insurance, or requirements to set aside an amount of permanent credits 9

Safeguards (1)  7 safeguards have been listed under the Cancun agreement for the REDD + implementation: o consistency with existing forest programmes and international agreement o transparent and effective national forest governance structures; o respect for the knowledge and rights of indigenous peoples and local communities; o full and effective participation of relevant stakeholders; o protection of natural forests and biodiversity; o addressing the risk of reversals (‘permanence’); o and addressing the risk of displacement of emissions (‘leakage’) 10

Safeguards (2)  New policies and approaches have been or are being developed by institutions such as Forest Carbon partnership facility, GEF and UNREDD based on world Bank policies  However, there is a need for harmonised and strengthened standards based on: o the effective protection of knowledge and rights of, and clear benefits for, indigenous peoples and local communities, and the implementation of the FPIC principle; o the effective protection of natural forests and native biodiversity o measurable progress towards transparent and effective governance; and o compliance with relevant international conventions and agreements 11

Governance  Governance raises the question: “How do you ensure that REDD will not adversely impact the rights and livelihoods of the millions of people who live in or around forests, especially in poorly governed states? “  Sound governance is highly linked to the successful implementation of the safeguards  Guidelines and frameworks for monitoring governance have been developed by many institutions such as World Band, FAO, UNREDD but there is a need for harmonisation of policies and common indicators  Experiences from other initiatives could be useful: o EU FLEGT process has developed expertise in strengthening and assessing forest governance and in promoting participatory approaches o World Resources Institute developed indicators to monitor and assess forest governance 12

Measuring, reporting and verifying (MRV) (1)  MRV raises the following questions: o How do you measure, report and verify emission reductions from forests? This is especially challenging for measuring reductions in forest degradation o What mechanisms are needed – and who will operate them – to measure changes in rates of deforestation, leakage, permanence, the implementation of safeguards and the impacts on governance?  Carbon emissions from deforestation and degradation are estimated from changes in two important variables: (i) area of deforestation and degradation; and (ii) carbon stock densities per unit area which needs to: o Use remote sensing technologies combined with ground measurements o Establish a forest inventories  Constraints in developing countries : o Limited availability of technical equipment but also of know - how o Limited knowledge of carbon stocks contained in alternative forest types and forest uses 13

Finance  The Eliasch Review estimated that $17–33 billion a year was required by 2030 to halve emissions from the forest sector  The general assumption is that finance of this magnitude could only be generated through the inclusion of forest carbon credits in a global carbon trading scheme, thus providing enterprises (or countries) with the opportunity of offsetting their own emissions by purchasing (cheaper) credits for forest carbon emission reductions  it is virtually impossible to see a global forest carbon market emerging before a new global climate agreement enters into force  Forest carbon markets currently in place, however – a mixture of national and voluntary schemes – are growing, and provided an estimated $178 million for REDD+ activities in

Implementing REDD +  The aim of REDD+ is a national programme addressing forest sector emissions as a whole, thus minimising any risk of leakage  however, that in many cases it will be more practicable to begin REDD+ in only part of the country (sub-national actions) as an interim strategy.  Given the complexity of developing programmes to manage a country’s entire forest sector, a three-phase approach has evolved, and was codified at the Cancun UNFCCC conference in

Steps for REDD Implementation proposed in Cancun  Three - phase approach agreed at Cancun: o Phase 1: ‘development of national strategies or action plans, policies and measures, and capacity-building’ (‘REDD readiness’) o Phase 2: implementation of strategy, including further capacity- building, testing MRV, payments for ‘results-based demonstration activities’ o Phase 3: fully implemented programme with a pay-for-performance system  Countries can start anywhere they like along the spectrum  The steps should include local and national stakeholder consultations and may require other measures such as the clarification of national land, forest and carbon tenure rights  All steps are likely to need institutional, technical and human capacity- building. 16

REDD funding sources  A wide range of multilateral and bilateral initiatives have been established to channel finance to the REDD activities, mainly to fund REDD readiness activities 17

Major multilateral Initiatives  World Bank’s Forest Carbon Partnership Facility (FCPF) Readiness Fund and Carbon Fund  World Bank’s Forest Investment Programme (FIP)  UN-REDD Programme (FAO, UNDP, UNEP)  Congo Basin Forest Fund (CBFF)  Amazon Fund  Indonesia Climate Change Trust Fund  Global Environment Facility 18

Major bilateral Initiatives  Australia’s International Forest Carbon Initiative  Norway’s International Climate and Forest Initiative (also main donor to Amazon Fund, UN-REDD)  Other donor funds not only REDD+, including Germany’s International Climate Initiative and UK’s International Climate Fund* 19

REDD in practice (1): results of assessments studies  Number of assessments and comparative studies on REDD initiatives came to the following conclusion:  Proliferation of different initiatives and funds  Lack of coordination, between the multilateral initiatives  Long lead times and complicated procedures result in low disbursement rate of the majority of these funds  Difficulty in addressing the three-phase approach agreed in Cancun: particularly there is a wide divergence of opinion on when the country are likely to be “ready”.  Safeguards and governance: improving standards of forest governance should be considered as a process that involved all stakeholders 20

REDD in practice (2): results of assessments studies  Stakeholders engagement: difficulty at national level in identifying and coordinating civil society and forest community representatives on the ground  Knowledge transfer : beneficiary countries reported the difficulty in identifying reliable and up-to-date sources of information  Low engagement of private sector  National ownership: limited ownership of the REDD + process to a very small staff within particular ministries in many developing countries 21

REDD in practice (3): summary funding  All sources of REDD+ finance together from November 2011 account for 13% total climate finance with $446 million approved and $252 million disbursed (disbursement rate of 56.5%)  Eliasch Review recommendations:  ‘ REDD readiness’ – $4 billion over five years for forty forest nations ($20m / country / year)  $17–33 billion a year by 2030 for fully fledged REDD+ mechanism achieving a 50% reduction in deforestation 22

REDD in practice (4): Multilateral initiatives funding ($m) 23 InitiativePledgedDepositedApprovedDisbursed FCPF (RF) FCPF (CF) FIP UN-REDD Congo Basin Forest Fund Amazon Fund Indonesia CCTF Total Total % pledged

REDD in practice (5): regional distribution 24 RegionApproved in US$ million Disbursed In US$ million Asia9488 (93%) – major recipient: Indonesia4240 (95%) Latin America17873 (41%) – major recipient: Brazil / Amazon Fund14349 (34%) Sub-Saharan Africa11947 (39.5%) – major recipient: DRC6616 (24%)

REDD in practice (6): Lack of Coordination  Lack of coordination between the multilateral initiatives in terms of communication and developing common approaches on :  safeguards  MRV  Administrative processes  Few efforts of coordination are made such as:  Establishment of the REDD+ Partnership in 2010 as a global platform to improve effectiveness, efficiency, transparency and coordination of REDD + initiatives and financial instruments (e.g. a Voluntary REDD+ Database )  FCPF and UN-REDD share a common template for national proposals for funding but still follow different processes in many cases 25

REDD in practice (7): Market-based Instrument  Forestry projects under CDM o Forestry projects limited to afforestation or reforestation, REDD project not eligible o Time-limited credits due to concerns over permanence and given that wood eventually decays and releases its carbon into atmosphere o Less than 1% of CDM projects o most of the CDM forestry credits have been generated (and purchased by ) projects proposed by the BioCarbonFund (public-private initiative)  Forestry projects under Voluntary Market o REDD projects represented the highest volume of voluntary projects in 2010 with 29% of projects. o Methodologies for REDD exist in the voluntary carbon market o Forest-only standards made up one third of all active standards in

Brief presentation of Major bilateral Initiatives 27

Forest Carbon Partnership Facility (FCPF) 28

Forest Carbon Partnership Facility (FCPF)  World Bank programme, operational in 2008  FCPF has dual objectives through  Readiness Fund: FCPF aims to build capacity for REDD + in developing countries  Carbon Fund: FCPF aims to test a programme of performance – based incentive payments in a small pilot performance-based payments in a small number of pilot countries  37 forest developing countries are participants to FCPF  11 candidate countries  Participants Committee: main decision-making body which includes: 14 donors, 14 REDD+ countries, observers 29

FCPF Readiness Fund  Main activity : REDD+ readiness  Eligibility: o IBRD/IDA member in tropics/sub-tropics o Significant forest area / carbon stock o High relevance of forests in economy o High current/project deforestation 30

FCPF Readiness Fund: activities  FCPF readiness fund supports participating country in: o Developing national reference scenarios for REDD+. o Adopting a national REDD+ strategy that reduces emissions, conserves biodiversity and enhances the livelihoods of forest-dependent indigenous peoples and other forest dwellers. o Designing and implementing accurate measurements and MRV systems to enable reporting on emissions from deforestation and forest degradation. 31

FCPF - Readiness fund - Application process – Step 1  Step 1- Preparation of the Readiness Plan Idea Note (R-PIN) includes: o Background information on forestry, deforestation, current policies o Potential further programmes: forest governance, land tenure and land use regulations, building institutional capacity for REDD+ o Other relevant cross-sectoral policies: poverty reduction, agriculture o Stakeholder consultation processes o Challenges to implementation o Potential monitoring and implementation systems o Plan and tentative budget 32

Application process - Step 2: Readiness Preparation Plan (R-PP) Document template:  Component 1: Organise and Consult 1a. National Readiness Management Arrangements 1b. Stakeholder Consultation and Participation  Component 2: Prepare the REDD Strategy 2a. Assessment of Land Use, Forestry Policy and Governance 2b. REDD Strategy Options 2c. Arrangement for REDD Implementation 2d. Social and Environmental Impacts  Component 3: Develop a Reference Scenario  Component 4: Design a Monitoring System  Component 5: Schedule and Budget  Component 6: Design a Program Monitoring and Evaluation 33

Application process - Step 3: Readiness Package  Preparation of a country’s Readiness Package (R-Package) occurs when the majority of activities proposed in the R-PP have been implemented  R-Package is designed to move the country on to phase 2 of REDD + (e.g. implementation of strategy, including further capacity-building, testing MRV, payments for ‘results-based demonstration activities’ based on Cancun three-phase approach)  The scope of the R-Package is aimed to encompass the complete set o activities performed in the context of readiness, not just FCPF -funded ones.  R-PPs have not been exclusively funded through the FCPF  However in the context of FCPF, endorsement of the R-Package is required before  However the content and assessment of the R-Package is still under development 34

FCPF carbon fund - objectives  Operational - May 2011  Payments for verified emission reductions – i.e. part of REDD+ phase 2 activities  Aims to leverage private finance – though difficult in lack of a compliance market that accepts forest carbon or REDD credit 35

FCPF Carbon fund: selection  About five participants will be qualified initially, after the review of the FCPF Participants Committee based on: o Potential for sustainable emissions reductions o Scale of implementation o Consistency with compliance standards o Potential to generate learning value o Benefit-sharing mechanisms, broad community support o Transparent stakeholder consultations  30m – $40m / country over five years  Procedures for the selection, of the participants and the disbursement of funds are still being drawn up  Endorsement of a country’s Readiness Package will be a prerequisite for participation to the Carbon Fund 36

FCPF Carbon fund activities  Support in four main categories: o General economic policies and regulations (taxation, subsidies, rural credit, certification, law enforcement). o Forest policies and regulations (taxation, subsidies, certification, concession regimes, securing land tenure and land rights, forest law, governance and enforcement, zoning, protected areas, payments for environmental services (PES)). o Forest management (forest fires, reduced impact logging, reforestation). o Rural development (community development, rural electrification, community forestry). 37

FCPF Carbon fund: applying for funds  Country programme proposal will be assessed based on the following criteria: o Potential for generating high-quality sustainable emissions reductions and social and environmental benefits; o Scale of implementation; o Consistency with emerging compliance standards under the UNFCCC and other regimes; o Potential to generate learning value for the FCPF and other participants; o Clear and transparent benefit-sharing mechanisms with broad community support; and o Transparent stakeholder consultations.  Process is still under way and will be similar to the Readiness Fund with Emissions reductions Programme Idea Notes (ER-PINs) and Emission Reduction Programme Documents leading to Emission reduction Programme Agreements (ERPAs) 38

Forest Investment Programme (FIP) 39

Forest Investment Programme (FIP): background  One of World Bank’s Climate Investment Funds (CIFs), operational July 2009  Aim: financing to developing countries for readiness reforms and public and private investments; much larger sums than FCPF  Will close when new UNFCCC financial architecture is finalized 40

FIP membership and governance  FIP Sub-Committee is the main decision-making body: o 6 donor countries o 6 eligible recipient countries o Observers  Eight pilot countries: o Brazil, Burkina Faso, DRC, Ghana, Indonesia, Lao PDR, Mexico, Peru  Three potential further pilots: o Philippines, Mozambique, Nepal 41

FIP: applying for Funds  The FIP’s eight pilot countries were identified from 45 expressions of interest;  Selection of pilot countries based on:  Programme potential to contribute and adhere to FIP objectives and principles  Country preparedness and ability to undertake REDD initiatives  Existing pilot programme distribution across regions and biomes, ensuring that pilot programmes generate lessons on scaling up activities  Five investment plans approved by FIP Sub-Committee – for Brazil, Burkina-Faso, DRC, Lao PDR and Mexico in

UN-REDD 43

UN-REDD: Background  FAO / UNDP / UNEP initiative, operational 2008  42 partner countries :  16 of them with national programmes: Bolivia, Cambodia, DRC, Ecuador, Indonesia, Nigeria, Panama, Papua New Guinea, Paraguay, Philippines, Republic of Congo, Solomon Islands, Sri Lanka, Tanzania, Viet Nam and Zambia.  The remaining are engaged with the programme in different activities such as observers to the Programme’s Policy Board, and through participation in regional workshops and knowledge sharing: Argentina, Bangladesh, Benin, Bhutan, Cameroon, Central African Republic, Chile, Colombia, Costa Rica, Cote d’Ivoire, Ethiopia, Gabon, Ghana, Guatemala, Guyana, Honduras, Kenya, Mexico, Mongolia, Myanmar, Nepal, Pakistan, Peru, South Sudan, Sudan and Suriname. 44

UN-REDD: Governance and activities  Programme Policy Board: main decision-making body o 3 full members from donor countries o 3 full and 6 alternate from programme countries o NGOs, indigenous peoples, UN agencies  Global programme – common approaches, analyses, methodologies, tools, data, best practices  National programmes available only to selected countries 45

UN-REDD- National programmes  Aims: o Develop and implement MRV systems o Credible, inclusive national governance systems o Systems for management of REDD+ funding strengthened o Indigenous peoples, local communities, civil society organisations and other stakeholders participate effectively o Multiple benefits of forests promoted and realised o REDD+ strategies and related investments catalyse shifts to a green economy o Knowledge is developed, managed, analysed and shared 46

UN-REDD – Applying for Funds  Must be UN-REDD partner country  Regional balance of investment  Prioritise according to: o Contribution of UN-REDD to national readiness process o Effective engagement of UN agencies at country level o REDD+ potential of the country (forest cover, annual rate of change, potential importance of forests to poor) o Also must display commitment to UN-REDD principles: o Human-rights based approach to development o Engagement of indigenous peoples o Social and environmental principles and criteria o Consistency with REDD+ safeguards….  Submission of the national program document: First review by the Secretariat and final decision by the Policy Board 47

Application process – the national programmes template Document template of the national programmes template (same as the FCPF Readiness Plan) :  Component 1: Organise and Consult o 1a. National Readiness Management Arrangements o 1b. Stakeholder Consultation and Participation  Component 2: Prepare the REDD Strategy o 2a. Assessment of Land Use, Forestry Policy and Governance o 2b. REDD Strategy Options o 2c. Arrangement for REDD Implementation o 2d. Social and Environmental Impacts  Component 3: Develop a Reference Scenario  Component 4: Design a Monitoring System  Component 5: Schedule and Budget  Component 6: Design a Program Monitoring and Evaluation 48

Turning words into action 49

Discussion  Questions and answers  Discussion and sharing of experiences concerning REDD 50 Are you a REDD partner? Do your country could benefit from REDD funding ? If yes what are the institutional and capacity needs in your organisation to do so?

Where to get the information?  Getting information from the REDD websites (e.g. UN-REDD )- visit of the website:  UNFCC REDD Platformhttp://unfccc.int/methods_science/redd/it ems/4531.phphttp://unfccc.int/methods_science/redd/it ems/4531.php 51

Case studies  Presentation of a National programmes document (under UN-REDD) or / a Readiness Plan (under FCPF) submitted by a country 52

Thank you Contact: Dr. Pendo MARO, ACP Secretariat or