Developing Incentives for Reducing Emissions from Deforestation and Degradation (REDD) The Readiness Mechanism Some ideas for your consideration next steps FCPF July 10, 2008

The Readiness Plan is the extension of the R- PIN:  will build on information provided  will demand additional detailed description on how REDD strategies will be prepared

Readiness defined  A REDD reference emission level established, based on historic emissions and modeling of future emissions. Ideally follows guidance from UNFCCC.  An economically effective, efficient and socially equitable REDD strategy formulated and vetted through a meaningful policy/stakeholder consultation process.  A monitoring and verification system designed and implemented  REDD infra-structure established:  National coordination of activities, Ownership of ER, Distribution of ER revenues

Draft Readiness Process Grant Agreement for Readiness REDD countries prepares the Readiness Plan Definition of objectives/strategies and responsibilities First Planning Workshop Stock taking of existing information and assessment of knowledge gaps Preparation of main ToRs for Plan Preparation of Consultation Plan Identification of potential partners ($) Identification of most effective and efficient strategies (incl. policy changes) Methodology work (Ref. emission level) Design and implementation of Monitoring system Identification of Investment needs REDD countries implement the Readiness Plan 1 st Phase (U$200,000) 2 nd Phase 3 rd Phase if needed R-Plan Review Country “ready”

Readiness Phases and implementation Preparation of R-Plan Scoping and gap analysis Setting of objectives / defining activities Preparation of Stakeholder consultations plan Strategy development & consultation Identification of most effective and efficient strategies (incl. policy changes) Methodology work (Ref. emission level) Design of Monitoring system Identification of Investment needs Implement. of monitoring Implementation of monitoring system (co-financing from other partners needed) Implement. of Strategy Physical investments in projects, eg. Investments in infra-structure for forest concessions, demarcation of indigenous reserves, parks; economic alternatives; community forestry programs, etc. Demonstration Activities Payment for emission reductions from demonstration activities FCPF Readiness UN-REDD, bilateral donors, NGOs, foundations? Carbon FIF?

REDD Strategies draft Checklist of issues to be considered  What are the drivers of deforestation and what are the links to other sectors?  Drivers of deforestation? Sectors, policies, behavior?  Stewards of forest protection?  Strengths and Weaknesses of current public interventions and policies  What are the opportunity costs?– helps to set priorities and provides better understanding of dynamics of DD  Difference between opportunity costs and costs to implement strategies to reduce emissions  Draft guidance on methods is under development  Presentations and publications are available:   What are the policy and regulatory changes that each country could promote?  Studies could be done by sector, region or country wide – starting with an assessment of the situation  Fiscal policies, removal of subsidies  Analysis of institutional capacity and cooperation  Land tenure security,  Forest law and governance, corruption, etc

REDD Strategies Draft Checklist of issues to be considered  What priority investment programs could be promoted? What are their costs? What is the planning horizon?  Institutional capacity building and strengthening  Community forestry  Zoning  Forest industry  Protection forests  Promotion of economic alternatives, tax exemptions, subsidies  Research and Development, etc.  What are the political, social and institutional risks and trade offs of proposed actions  How to assess impacts – “Strategic Environmental Assessment”  What are the affected social groups?  Would action enhance biodiversity protection?  Institutional capacity assessment?  What are the political and institutional roadblocks?

Draft Risks and trade-off assessment Capacity assessm. And time for impl. Carbon effectiveness Cost effectiveness Social and env. Benefits & impacts Increase of protected areas Community forestry progr Improvement of law enforc. Forest industry improvement Reforestation Intensification of soy bean Certification campaign Indigenous demarcation. Regulatory approaches… Etc. REDD Strategy options Factors to be considered Evaluation will be different depending on the time horizont

REDD Strategies Checklist of issues to be considered  What kind of “REDD infrastructure” will be needed to manage REDD?  What institutional setting is needed to manage REDD in a country?  Coordination, reporting, participation,  How can ownership of Emission Reduction be defined in each country?  What is the scale of implementation, and accounting?  Is there a legal framework in place that already defines ownership of “environmental services” or “carbon emission reductions” –Are attributions to forest protection defined? –Are responsibilities for land management clear? Land tenure?

REDD Strategies Checklist of issues to be considered  What kind of “REDD infrastructure” will be needed to manage REDD?  How can potential future revenues be used and distributed?  What are the current experiences with existing programs? – Can we scale up?  Are additional mechanisms needed? Individual payments – finance of programs?  Is there a link between attributers and beneficiaries?  Who manages, coordinates and controls distribution? Need for transparent, effective, equitable system.  Relationship between national accounting and specific programs and actions?  Explore implications of different options? –Is there a need for a National GHG Registry? –How would specific activities link up to a National Accounting System?

Measuring, Monitoring and Verification Potential Principles for Design of MMV System:  Build on existing national systems  Support multicountry MMV approach as feasible  Help design MMV system to meet acceptable levels of uncertainties ….  …but flexibility in standards and approaches:  To encourage participation  To encourage variety of approaches  To promote cost effective systems  Principle of conservatism in GHG accounting and reporting  Seek consistency and complementary with other non- GHG (i.e. forest) monitoring and reporting systems  Third party assessment of MMV system proposals.  Coordination across REDD initiatives and support.

Measuring, Monitoring and Verification Potential Next Steps: 1.Promote dialogue with national, international, and IPCC experts on reporting standards. 2.Consult with national experts and stakeholders, incl. IPs 3.Build on UN IPCC Guidelines for National GHG Inventories, and IPCC good practice guidance for LULUCF (available): e.g. Sourcebook: 4.Assess availability of national data sets and capacity: 1.Land cover and land cover change historic data 2.Remote sensing and forest inventory interpretation and reporting capacity 3.Current and potential GHG national accounting and reporting capabilities 4.Identify gaps in current systems. 5.Design MMV system to fill in gaps, or to introduce enhanced approach 6.Integrate MMV with GHG accounting and reporting system. 7.Identify costs and possible partners for cooperation and implementation of system

Reference Scenario How could we get started?  Assessment availability and quality of historic land cover change and carbon density data:  Early step in preparation of the Readiness Plan, and assessment of monitoring capacity and needs  Develop data acquisition plan, where needed.  Estimation of historic GHG emissions:  Use existing forest inventory, carbon density maps or other approach  Establish further permanent plots for carbon density, if needed  Projection of future emissions, via modeling, etc. (if country requests)  Based on analysis of drivers of deforestation, and potential development strategies of country  Setting of National Reference Scenario and submission  National decision  External Peer review

Impact assessment  Readiness activities should be analyzed on their environmental and social impacts during the planning process  Repeated and meaningful consultation is essential. It is not only a requirement (“World Bank Safeguard”), but a condition for success  REDD strategy development is a planning exercise where information on potential negative impacts must be made available to stakeholders and decision takers  World Bank recommends use of “Strategic Environmental Assessment” as an adequate and effective tool to evaluate potential impacts.

How to get started? 1.To access the US$ 200,000 to prepare the Readiness Plan:  Simplified proposal for activities how to prepare and submit to FCPF 1.How will you spent the 200,000? 2.Sign Grant Agreement 1.Prepare Readiness Plan –Definition of objectives/strategies and responsibilities –First Planning Workshop –Preparation of main ToRs for Plan –Preparation of Consultation Plan –Stock taking of existing information and assessment of knowledge gaps 3.Template for Readiness Plan  Under preparation, but builds on R-PIN

Draft template for R-Plan under preparation

Wrap up These are initial thoughts. We would appreciate inputs and ideas Potential for discussion at next meeting