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Climate funding opportunities:REDD+ funds
1
Intra-ACP GCCA Programme
Briefing to the ACP Group of States July 19, 2012, ACP Secretariat, Brussels
Duncan Brack, dbrack@dbrack.org.ukConsultant to the ACP GCCA Programme(LTS-Baastel-CAMCO)
Outline
1. REDD+ concept2. Three multilateral initiatives in detail:
a) Forest Carbon Partnership Facility (FCPF)
b) Forest Investment Programme (FIP)
c) UN-REDD
3. Three initiatives more briefly:a) Congo Basin Forest Fund (CBFF)
b) Australia’s International Forest Carbon Initiative
c) Clean Development Mechanism (CDM)
4. REDD+ funding in practice5. The future
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REDD+: background
Deforestation ~17% global emissions Relatively cheap to reduce (in theory) Not included in Kyoto – too difficult Aim of seeing developing countries adopt
targets meant had forests to be included Bali Roadmap, 2007; Copenhagen
Accord, 2009 Needs new treaty, so not imminent But funding for ‘readiness’ activities
available
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REDD+: the concept
Basic idea: add value to standing forests
Development RED – REDD – REDD+ Reducing emissions from deforestation Reducing emissions from forest
degradation Forest conservation Sustainable management of forests Enhancement of forest carbon stocks
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Challenges
Reference levels Leakage Permanence Safeguards Governance Measuring, reporting and verifying
(MRV) Finance
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Implementation
Step-wise approach, codified 2010: Phase 1: ‘development of national
strategies or action plans, policies and measures, and capacity-building’ (‘REDD readiness’)
Phase 2: implementation of strategy, including further capacity-building, testing MRV, payments for ‘results-based demonstration activities’
Phase 3: fully implemented programme with a pay-for-performance system
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‘REDD readiness’
Preparation of national strategies to reduce emissions
Designing and implementing national forest carbon accounting, including baselines and reference emissions levels and MRV systems
Developing benefit-sharing mechanisms Developing safeguards and grievance
mechanisms to protect the interests of forest communities, indigenous people, biodiversity, etc.
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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 Clean Development Mechanism (CDM) of the
Kyoto Protocol
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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
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Multilateral initiatives funding ($m)
Initiative Pledged Deposited
Approved
Disbursed
FCPF (RF) 229.6 229.6 27.2 9.1
FCPF (CF) 204.5 179.3 1.44 0.2
FIP 644 459 51.0 3.2
UN-REDD 150.8 118.2 108.1 90.9
Congo Basin Forest Fund 165 165 75.0 12.1
Amazon Fund 1032.2 57.5 141.6 42.5
Indonesia CCTF 18.6 8.9 6.3 5.5
Total 2444.7 1217.5 410.6 163.5
Total % pledged 100 49.8 16.8 6.7See Table 3 in paper (page 12–13) for developing country participation in initiatives
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Funding summary
All sources of REDD+ finance together, 2008 – November 2011: $446 million approved, $252 million
disbursed (13% total climate finance) Eliasch Review recommendations:
‘REDD readiness’ – $4 billion over five years for forty forest nations ($20m / country / year)
$17–33 billion a year by 2030 for fully fledged REDD+ mechanism achieving a 50% reduction in deforestation
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Regional distribution ($m)
Region Approved
Disbursed
Asia 94 88
– major recipient: Indonesia 42 40
Latin America 178 73– major recipient: Brazil / Amazon Fund 143 49
Sub-Saharan Africa 119 47
– major recipient: DRC 66 16
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Coordination
REDD+ Partnership established 2010 Voluntary REDD+ Database
June 2012: 40 countries reported 652 ‘arrangements’
Total funding 2006–16: $5.74 billion (reported by funders) or $2.72 billion (reported by recipients)
Forest Trends project will track REDD+ funds
FCPF and UN-REDD collaborate, e.g. over funding application templates – but still follow different processes in many cases
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Forest Carbon Partnership Facility
World Bank programme, operational 2008 Readiness Fund – capacity-building Carbon Fund – pilot performance-based
payments 37 developing countries 11 candidate countries Participants Committee main
decision-making body 14 donors, 14 REDD+ countries,
observers14Intra-ACP GCCA Programme
FCPF Readiness Fund
Eligibility: IBRD/IDA member in tropics/sub-tropics Significant forest area / carbon stock High relevance of forests in economy High current/project deforestation
Funding: $229.6m pledged/deposited $27.2m approved (11.8%) $9.1m disbursed (4.0%)
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Stage 1: Readiness Plan Idea Note (R-PIN)
R-PIN submitted to Participants Committee Example, Ghana:
Submitted October 2007, approved July 2008 25-page document Background information on forestry, deforestation, current
policies Potential further programmes: forest governance, land tenure
and land use regulations, building institutional capacity for REDD+
Other relevant cross-sectoral policies: poverty reduction, agriculture
Stakeholder consultation processes Challenges to implementation Potential monitoring and implementation systems Plan and tentative budget ($4.82 million)
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Stage 2: Readiness Preparation Proposal (R-PP)
April 2012 26 prepared 19 submitted 5 received grants (DRC, Ghana,
Indonesia, Nepal, RoC) Formulation grant of $200,000 Clear plan, budget, schedule
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Ghana’s R-PP (1)
Ghana: Started work May 2009 Draft R-PP September 2009 Final R-PP submitted January 2010 Approved subject to revision March 2010 Final revised R-PP submitted December
2010 Formulation grant disbursed November
2010
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Ghana’s R-PP (2)
128-page document Roadmap for readiness activities Readiness phase 2009–11,
implementation 2011–12, country ‘ready’ thereafter
Budget: $7.334 million FCPF: $3.6 million (max) Government: $1.7 million Other donors
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Ghana’s R-PP (3)
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
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Stage 3: Readiness Package
Move country to Phase 2 of REDD+: Activities are tested within a transparent
framework, social and environmental risks mitigated
Should cover all REDD+ activities (not just FCPF)
Endorsement of R-Package necessary for participation in FCPF Carbon Fund
Content still under development
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FCPF Carbon Fund (1)
Operational May 2011 Payments for verified emission reductions –
i.e. part of REDD+ phase 2 Funding:
$204.5m pledged $179.3m deposited $1.44m approved (0.7%) $0.2m disbursed (0.1%)
Aims to leverage private finance – though difficult in absence of global carbon market
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FCPF Carbon Fund (2)
About five participants qualify initially, based on: Potential for sustainable emissions reductions Scale of implementation Consistency with compliance standards Potential to generate learning value Benefit-sharing mechanisms, broad community
support Transparent stakeholder consultations
$30m – $40m / country over five years Still under development
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Forest Investment Programme (1)
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
Funding: $644m pledged $459m deposited $51m approved (7.9%) $3.2m disbursed (0.5%)
Will close on new UNFCCC financial architecture24Intra-ACP GCCA Programme
Forest Investment Programme (2)
FIP Sub-Committee main decision-making body: 6 donor countries 6 eligible recipient countries Observers
Eight pilot countries: Brazil, Burkina Faso, DRC, Ghana,
Indonesia, Lao PDR, Mexico, Peru Three potential further pilots:
Philippines, Mozambique, Nepal 25Intra-ACP GCCA Programme
FIP: applying for funds
45 expressions of interest; selection 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
Investment plans approved by FIP Sub-Committee – 5 approved to date, aim for end 2012 for remaining
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FIP: examples of projects
DRC: addressing deforestation and degradation in the Kinshasa supply area ($36.9 million, December 2012)
Mexico: strengthening financial inclusion of ejidos and communities through technical assistance and capacity-building for low-carbon strategies in forest landscapes ($2.9 million, July 2012)
Lao PDR: smallholder forestry project ($3.0 million, September 2012)
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UN-REDD (1)
Some countries not keen on World Bank FAO / UNDP / UNEP initiative, operational
2008 42 partner countries16 of them with national programmes Funding:
$150.8m pledged $118.2m deposited $108.1m approved (71.7%) $90.9m disbursed (60.3%)
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UN-REDD (2)
Programme Policy Board main decision-making body 3 full members from donor countries 3 full and 6 alternate from programme
countries NGOs, indigenous peoples, UN agencies
Global programme – common approaches, analyses, methodologies, tools, data, best practices (all countries can access)
National programmes
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National programmes
Aim to achieve outcomes: Develop and implement MRV and monitoring systems Credible, inclusive national governance systems
developed Systems for management of REDD+ funding
strengthened Indigenous peoples, local communities, civil society
organisations and other stakeholders participate effectively
Multiple benefits of forests promoted and realised REDD+ strategies and related investments catalyse
shifts to a green economy Knowledge is developed, managed, analysed and shared
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UN-REDD: applying for funds
Must be UN-REDD partner country Regional balance of investment Prioritise according to:
Contribution of UN-REDD to national readiness process Effective engagement of UN agencies at country level REDD+ potential of the country (forest cover, annual rate of
change, potential importance of forests to poor) Also must display commitment to UN-REDD principles:
Human-rights based approach to development Engagement of indigenous peoples Social and environmental principles and criteria Consistency with REDD+ safeguards Etc.
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National programme template (1)
Component 1: Organise and Consult 1a. National Readiness Management Arrangements 1b. Information Sharing and Early Dialogue with Key
Stakeholder Groups 1c. Consultation and Participation Process
Component 2: Prepare the REDD-plus Strategy 2a. Assessment of Land Use, Land Use Change
Drivers, Forest Law, Policy and Governance 2b. REDD-plus Strategy Options 2c. REDD-plus Implementation Framework 2d. Social and Environmental Impacts during
Readiness Preparation and REDD-plus Implementation
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National programme template (2)
Component 3: Develop a National Forest Reference Emission Level and/or a Forest Reference Level
Component 4: Design Systems for National Forest Monitoring and Information on Safeguards 4a. National Forest Monitoring System 4b. Designing an Information System for Multiple
Benefits, Other Impacts, Governance, and Safeguards Component 5: Schedule and Budget Component 6: Design a Program Monitoring and
Evaluation Framework
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UN-REDD: examples of funding
Ecuador: $4m for 2011–13. Expected outcomes include: Design and implementation of: National Forest
Monitoring System; consultation process; policies, instruments, operational framework for implementation; ensuring multiple environmental and social benefits; benefit-sharing system.
Viet Nam: $4.4 m for 2009–12. Expected outcomes include: improved institutional, technical, management capacity;
incorporation of economic incentives; approaches to reduce regional displacement of emissions.
Zambia: $4.5m for 2011–13. Expected outcomes include: Capacity strengthened; stakeholder support established;
national governance framework and institutional capacities strengthened; REDD+ strategies identified; MRV capacity strengthened; assessment of reference emission level and reference level.
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Congo Basin Forest Fund (1)
Established 2008 COMIFAC member countries:
Burundi, Cameroon, Central African Republic, Chad, DRC, Equatorial Guinea, Gabon, Republic of Congo, Rwanda, Sao Tome & Principe
Funding: $165m pledged / deposited (UK and Norway) $75.0m approved (45.5%) $12.1m disbursed (7.3%)
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Congo Basin Forest Fund (2)
Key thematic areas for grants: Forest management and sustainable
practice Livelihoods and economic development Monitoring, assessment and verification Benefits from carbon markets and
payment for ecosystem services Capacity-building in REDD; monitoring,
assessment and verification; SFM Wide range of applicants
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CBFF: examples of funding
Alternatives to mangrove destruction for women's livelihoods in Central Africa (Cameroon; $0.38m)
Civil society and government capacity-building within the REDD framework (DRC, $4.26m)
Improving beekeeping and reforestation around the Bagandou forest, CAR ($0.35m).
Promoting community land tenure rights in the Congo Basin (Cameroon, CAR, Gabon, RoC, DRC, $0.73m)
Quantifying carbon stocks and emissions in the forests of Cameroon and RoC ($1.74m)
Reconciling the needs of the logging industry with those of forest-dependent people (Cameroon, Gabon, DRC, $2.19m)
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Australia’s IFCI
Established 2007 Projects mainly based in Asia-Pacific,
especially Indonesia, PNG Funding:
$216.2m pledged $185.5m approved (85.8%) $31.7m disbursed (14.7%)
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IFCI: Examples of funding
Kalimantan Forests and Climate Partnership ($43m) – focus on 120,000ha of degraded and forested peatland in Central Kalimantan.
Sumatra Forest Carbon Partnership (($27.6m) – similar to the Kalimantan Partnership, on different forest type (mineral soils)
Papua New Guinea–Australia Forest Carbon Partnership ($3m initial) – support for government policy development on REDD+.
Roadmap for Access to International Carbon Markets – assisting Indonesia to develop prerequisites for participation in future international carbon markets
Partnership with the Clinton Climate Initiative on carbon monitoring – providing forest carbon data to developing countries (including Guyana, Tanzania, Kenya and Cambodia)
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Clean Development Mechanism
Kyoto Protocol flexibility mechanism Enables Annex I countries to earn
credits by investing in emission reduction projects in developing countries
Forestry projects limited to afforestation or reforestation
Credits time-limited <1% of CDM projects
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CDM: examples of projects
Chile: Restoration of Degraded Lands of Small and Medium Farmers through Afforestation and Reforestation
China: Facilitating Reforestation for Guangxi Watershed Management in Pearl River Basin
India: Improving Rural Livelihoods Nicaragua: Precious Woods Uganda: Nile Basin Reforestation Most operating through BioCarbon Fund Future depends on UNFCCC developments
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REDD+ funding in practice (1)
Role and structure of multilaterals UN-REDD quicker to disburse funds, more flexible FCPF better at standards, governance,
safeguards; Carbon Fund valuable in long term Still confusion over different bodies, selection
criteria Coordination, overlaps, gaps
Lack of coordination serious but improving Common approaches, e.g. on safeguards, MRV,
admin processes (but still different processes on safeguards)
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REDD+ funding in practice (2)
Finance Very low disbursement rate (UN-REDD
best – often has on-the-ground capacity) When are countries ‘ready’?
No clear definition But early estimates far too optimistic
Safeguards and governance Streamlining process controversial Governance initiatives (e.g. FLEGT)
important43Intra-ACP GCCA Programme
REDD+ funding in practice (3)
Stakeholder engagement Good participation at international level More difficult at national level
Knowledge transfer Too much information available; difficult to
identify reliable and up-to-date Private sector
Generally not engaged; FIP may help Too uncertain for international carbon
markets44Intra-ACP GCCA Programme
REDD+ funding in practice (4)
National ownership Initially often seen as imposed from outside;
less problematic now, but still often limited buy-in
UN-REDD agencies benefit from on-the-ground capacity; but can sometimes take over process
Misperceptions and uncertainty In early days, often unrealistic expectations Link to livelihoods not well understood Uncertainty over long-term future
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The future
‘REDD is moving ahead, but at a slower pace and in a different form than we expected when it was launched at Bali in 2007.’ Early expectations of global
framework under new climate treaty, substantial performance-based funding
Now most REDD+ funding from development aid budgets
Readiness activities slow and expensive
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Possible developments
Funding will continue to be made available; will retain payments-for-results focus
Disbursement will speed up, but donors more likely to use bilateral arrangements
Readiness activities are slow – and should be
Forest governance initiatives important
Interest will grow in root causes of deforestation
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Conclusion
‘The litany of problems encountered by the first generation of REDD+ initiatives can make for discouraging reading. But despite adverse changes in the broader context, and hard lessons learned from early experience, the potential of REDD+ continues to capture the imagination and attract continuing investment at all levels … REDD+ as a worthy objective is still very much alive.’
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