GEF financing to Forests in a

Max Zieren & Jonathan Gilman, UNEPRegional Office for Asia and the Pacific

Fourth Regional Workshop on ‘Facilitating financing for Sustainable Forest Management in SIDS and LFCCs’

22-25 July 2012

Presentation overview

1. Forests under a Green Economy (GE)

2. GEF V Strategies for ‘Forests under a Green Economy’

3. How to access GEF V funding?

Part I – Forests under a Green Economy

Green Economy in the context of Rio +20Agreement on GE as tool for S.D and poverty eradication

Principles of GE• Tool for sustainable management of natural resources• Respect national sovereignty • Strengthened international cooperation (finance, cap

dev, tech. Transfer)• No trade restrictions or unwarranted conditionalities• Enhance welfare of IPs, respect their non-market

approaches to poverty reduction• SCP- consumers and producers • Leading role of Government • Business & Industry integrate GE

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Green Economy in the context of Rio +20

Rio also called for UN and partners to:

• Develop tool boxes /best practices on GE policies

• Development methodologies to evaluate GE policies

• Promote platforms to contribute to GE learning and exchange of lessons learned

Role for UNFF

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Greening an Economy – by reshaping and refocusing policies, investments and spending in order to promote clean technologies, green

and decent jobs, renewable energies, waste management, green buildings and sustainable

agriculture and forests.

Rio +20 Outcome document

Green economy will…contribute to eradicating poverty as well as sustained economic growth, enhancing social inclusion, improving human welfare and creating opportunities for

employment and decent work for all, while maintaining the healthy functioning of the Earth’s ecosystems.Pa

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What is the future without change - BAU?By 2030 13 million ha forests lost annually

1.7 billion tonnes C-emissions (18%)

1.6 billion people dependent on forests could be in peril

Global energy demand up by 45% Oil price up to US$180 per barrel

(IEA) GHG emissions up 45% Global average temperature up 6°C Poor countries will suffer costs in

excess of 10% of their GDP (Stern)

Forests emissions 18% & Agriculture 14% of global !

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Lack of resources such as rare metals, fish, water, good soils, …??

Alternative - green economy can reduce poverty

• Strong link between poverty alleviation and wise management of natural resources and ecosystems.

• Ecosystem services and other non-marketed natural goods account for 47 to 90% of the so-called ‘GDP of the Poor’

Hence need to invest in natural capital as a source of stability and well-being

Natural-resource dependent sectors and ES (2005)

Brazil Indonesia

India

Original share of GDP (%): agriculture, forestry, fisheries

6% 11% 17%

Adjusted share of GDP (%): including non market/ES

17% 15% 20%

Share of ES/non market goods of total income of the poor (%)

90% 75% 47%

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Services

• Climate/water regulation• Pollination, nutrient

recycling• Landscape/culture values• Transportation

Goods

Forest goods and services – foundation for various sectors transformation to GE:

• Water• Energy, biomass, fuels• Timber, fiber, • NTFP, food• Pharmaceuticals• Genetics

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Forests catalyze green economy• Forest industry contributed USD468 billion (1%) of global

gross value added in 2006 • Trade in wildlife products est. at USD 15 billion/year• Sales of natural origin pharmaceuticals worth USD75

billion/year• Fiber and fuel: accounts in many countries to 80% of total

energy consumption• Contributions to food products through nutrient

recycling, disease control, pollination, health and agro-biodiversity

• More than 1/3 of the world’s population (2.4 billion) relies on wood or other plant-based fuels for cooking and heating

• 60, 350, 1,600 million depend on forests to varying degree

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Case for valuation & incorporation…Need full valuation of forests, incorporation in national

accounts, and cost- benefit analysis development options

Examples:• Preserving forests provided 2.8 times the economic

benefits compared to deforestation (Kenya)• Mangrove restoration cost 1.1 million USD- annual

savings of 7.3 million USD in sea dyke maintenance (Vietnam)

• T21 modeling in Kalimantan (Indonesia)

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Indonesia's Green Economy Corridor Initiative

Government of Indonesia & UNEP/FAO/UNDP- UNREDD+

Government led: Economic Master Plan Framework – green economic corridors

Objectives: a) Reduce forest based forest based greenhouse gas emissions in Kalimantan b) achieve multiple benefits for people’s livelihoods, the economy and conservation

How: Development of “roadmap for transformation”, including process, timeline, budget, roles and milestones

Investment package, with pledges, institutional arrangements and capacity to deliver F

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Continued - Forests in 2050: ‘BAU and green investment scenario’

Key Forest Sector Indicators in 2050

Business As Usual

Green Investment Scenario

Natural Forest Area (Billion ha)

3.36 3.64

Deforestation rate (ha/year)

14.9 6.66

Planted forest area (Million ha)

347 850

Total forest area (Billion ha)

3.71 4.49

Carbon storage in forests (Billion tonnes)

431 502

Gross Value Added (US$, Trillion)

0.9 1.04

Employment (Million) 25 30

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Part II - GEF V Strategies for ‘Forests under a Green Economy

(GE)’

GEF support to forests at a glance

• Since its inception in 1991, GEF has financed over 300 projects and programs focusing on forest conservation and management in developing countries;

• Total GEF allocation to forest initiatives during this period amounts to > $1.6 billion, leveraging $5 billion from other sources;

• Until 2006, GEF supported forest projects drawing from the focal areas of biodiversity and land degradation;

• In response to the growing international recognition of the role of forests in delivering global benefits across a variety of themes, in 2007 the GEF Council approved the broadening of the GEF’s efforts in the field of sustainable forest management.

Background SFM/REDD+ Financing • In GEF-5, for the first time a separate funding envelope for SFM/REDD+

has become available for countries willing to invest portions of their allocations from biodiversity, climate change and land degradation toward more impactful SFM/REDD+ projects (3:1);

• For SFM/REDD+ this envelope is worth $ 250 m. It operates as an incentive for developing countries to invest up to $ 750 million of their allocations from BD, CC and LD for more comprehensive SFM/REDD+ projects and programs.

• Altogether, the GEF will thus make up to $1 billion for SFM/REDD+ funding available throughout GEF-5. This investment is expected to leverage substantial additional funding from external sources.

• Types of projects supported: Forest policy (re-)formulation, forest protected area creation and management, forest inventory and carbon measurement and monitoring, reduced-impact logging, certification of timber and non-timber forest products, payment for ecosystem services.

– Biodiversity (national STAR)– Climate Change (mitigation & adaptation) national

STAR & others– Land Degradation (national STAR)– Sustainable Forest Management/REDD+

(global/national set-aside fund)– International Waters

– Chemicals

– Cross-cutting capacity development

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E’GEF Focal Areas:

Biodiversity

– Improve sustainability of protected areas (e.g. financing sustainability of forested PAs)

– Mainstream biodiversity conservation and sustainable use into production landscapes & sectors (forest policy & regulatory frameworks, forest biodiversity friendly goods and services)

– Build capacity on ABS (applications Bonn Guidelines – e.g. public-private partnerships on forests products bioprospecting, applying national ABS frameworks, forest PA and local community safeguards, etc) – also NPIF fund

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3 out of the 4 BD objectives target forests and elements of a GE:

– Promote investments in renewable energy technologies -deployment of reliable, least-cost RE technologies that address the natural resource endowments of countries (e.g. where RE would reduce pressure on forests, protect watersheds for micro-hydro, 2nd/3rd generation bio-energy, etc)

– Conservation and enhancement of carbon stocks through sustainable management of LULUCF (e.g. good management practices/SFM, restoration of forest carbon stocks, reforestation & peatlands; avoided GHG emissions/forest conservation) G

EF V

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Climate Change - Mitigation2 out of the 6 CC objectives target forests and elements of a GE:

– Generate sustainable flows of forest ecosystem services in arid, semi-arid and sub-humid zones, including sustaining livelihoods of forest-dependent people (enhanced enabling environment within dryland forest sector; improved dryland forest management, and functionality & cover of dryland forests maintained)

– Reduce pressures on natural resources from competing land uses in the wider landscape (e.g. avoiding deforestation from expanding economic sectors such as plantations; integrated watershed management, technical capacity to monitor and reduce GHG emissions) G

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Land Degradation2 out of the 4 LD objectives relate closely to ‘forests and elements of a GE’:

Part III – How to access GEF funding

1. Prepare pre-concept /identify lead NEA

2. Choose GEF IA (regional banks, IFAD, UNEP, UNDP, UNIDO, FAO, WB) – develop PIF concept

3. Consult your national GEF focal point – secure their STAR allocation

4. Get on NPFE – portfolio shortlist;

5. Use Multi-focal area to target extra SFM/REDD fund (3:1) for more forest focus H

ow to

acc

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EF fu

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gGEF Trust Fund

Adaptation Fund (UNFCCC):

1. Administered GEFSEC, but not GEF funding

2. Less than 1 million=small project; regular 1 m +

3. AF Board decides(1 SIDS rep.)

4. Grants for community, national, transboundary and multi-country initiatives;

5. See programmatic strategy for themes and approach eligible

6. Has to go through National Implementing Entity (NIE) or Multilateral Implementing Entities (MIE) – if qualified like UNDP, UNEP..)

7. Project Formulation Grants Available

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Thank you

for your attention!

More info: Max Zieren, UNEP/GEF Regional Focal Point – Asia, UNEP/ROAP (max.zieren@unep.org)