Ready for REDD - bmz.de · Ready for REDD Sharing the experience gained through German development cooperation with Reducing Emissions from Deforestation and Forest Degradation (REDD)

Ready for REDDSharing the experience gained through German development cooperation with Reducing Emissions from Deforestation and Forest Degradation (REDD)

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REDD activities of the Federal Ministry for Economic Cooperation and Development (BMZ) 3

Dirk Niebel

Federal Minister for Economic Cooperation and Development

The role of forests in mitigating climate change

The world’s forests provide a livelihood for more than one billion people. For those people, the forest is a source of income, construction materials, fuel wood, food and medicine. Forests contain and preserve 75% of global biodiversity. They store carbon and produce oxygen, thus regulating our global climate.

When people slash and burn forests, the greenhouse gas carbon dioxide is released. By protecting the forests, we can therefore also protect the climate and, at the same time, increase the capacity of ecosystems to adapt to climate change. Today about one fifth of all greenhouse gas emissions caused by human activity result from de-forestation. The worst losses are happening in the tropi-

4 REDD activities of the Federal Ministry for Economic Cooperation and Development (BMZ)

cal belt, where forests are being converted into farmland and oil palm plantations and where forest fires envelop entire regions in thick clouds of smoke.

The concept of protecting forests as a means of protecting the climate was introduced at the UN Climate Change Conference in Bali in 2007 and subsequently became one of the key issues in the field of climate change mitiga-tion. Today it is known around the world as REDD – Re-ducing Emissions from Deforestation and Forest Degra-dation, a scheme of performance-based payments for quantified and verified emission reductions in forests. As a concept embedded in a future climate regime, REDD is considered the most promising way of generating the revenues needed to protect tropical forests as well as en-suring large-scale, long-term investment in the sustain-

able management of forests. However, there is wide-spread agreement that efforts to reduce deforestation will only succeed if the communities that rely directly on forests for their livelihoods are fully engaged in the proc-ess. Thus, local development, sustainable management of forests, biodiversity conservation and climate protec-tion need to go hand in hand if REDD is to be successful. International development cooperation can play a vital role in consolidating progress in this field, and in moving forward with the practical implementation of REDD.

German development cooperation has been engaged for many years in a number of countries and regions that are particularly relevant for forest and climate protection, such as Brazil, Indonesia and the Congo Basin. Thanks to these programmes, we have gained experience on how


forest protection can be organised effectively in order to mitigate climate change. Forests, biodiversity and com-bating climate change continue to play a major role in German Official Development Assistance (ODA) and en-joy strong political support. Chancellor Angela Merkel’s pledge to increase German support for the conservation of forests and other ecosystems by half a billion euros by 2012 resulted in a strong increase in commitments for mainly forest-related development cooperation during recent years. From 2013 onwards, it is our aim to invest half a billion euros annually in forests and other eco-systems, including through REDD.

Germany’s pledge of fast-start climate funding under the Copenhagen Accord places a focus on REDD as a potentially effective and efficient tool for climate change

mitigation, biodiversity conservation and sustainable development.

This publication gives an overview of the efforts by Fed-eral Ministry for Economic Cooperation and Develop-ment (BMZ) to make a valuable contribution to mitigat-ing climate change by effectively protecting the world’s forests.

Dirk Niebel

6

ContentsI. REDD – AN INtRoDuctIoN 8

What is REDD and what is REDD+? 8What is new in REDD? 8Building on tried and tested solutions 10REDD step by step 12Projects worldwide 13Fighting deforestation in Brazil 13Forest protection and REDD in Ecuador 13REDD in the Lao People’s Democratic Republic 14REDD pilot measures in Indonesia 14

II. thE coNtRIbutIoN of GERmAN DEvElopmENt coopERAtIoN

17

Building on experience: benefiting both development and biodiversity

21

REDD: new opportunities and challenges 23

Recommended further reading 27Acronyms 27



I. REDD – An introduction

WhAt Is REDD AND WhAt Is REDD+?

About one fifth of all greenhouse gas emissions around the world are caused by forest destruction. Worst affected are the carbon-rich forests of the humid tropics. REDD, Reducing Emissions from Deforestation and Forest Deg-radation, aims to significantly reduce these emissions in developing countries at a comparatively low cost. The basic idea is to compensate national governments and local stakeholders in tropical forest countries for quanti-fied and verified emission reductions. REDD+ goes beyond forest conservation activities to include the enhancement of forest carbon stocks, for instance by improving forest management, rehabilitating forests and undertaking reforestation. REDD activities can range from small-scale local projects to nation-wide country programmes. REDD contains a great many new ideas, but can also draw on many tried and tested solutions in hands-on project work.

WhAt Is NEW IN REDD?

REDD adds the climate aspect to forest and biodiversity protection. What is new is the focus on current or future hot spots of forest destruction instead of designated conservation areas. The most important aspect of REDD is the performance-based payment for emission reduc-tions. This means that the impact of protection activi-ties on the climate must be quantifiable and verifiable. Therefore, REDD requires a special system of monitor-ing, reporting and verification (MRV), a sort of “carbon accounting”. Tropical forest countries (governments, institutions, alliances of indigenous forest owners or us-ers etc.) should only receive compensation payments in exchange for successful forest protection measures and resultant emission reductions.



At the climate conference in Cancún, Mexico, held under the United Nations Framework Convention on Climate Change (UNFCCC), a decision was adopted encouraging developing countries to contribute to mitigation actions in the forest sector. However, many technical and meth-odological issues still need to be resolved. In the interim, international development cooperation has a particu-larly important part to play. Commitments in the field of REDD must not only serve to mitigate climate change and conserve biological diversity but also contribute to development. REDD needs to get the local population involved and offer economic alternatives to destructive land use practices.

WhAt Is NEW IN REDD?

focus Current or future hot spots of forest destructionmEANs Performance-based payments (for emission reductions)pRINcIplE Emission reduction must be quantifiable and verifiable

buIlDING oN tRIED AND tEstED solutIoNs

German development cooperation has been working successfully for a great many years on protecting the world’s forests. We have been supporting our partners in the establishment of national forest policies, protected areas, measures to stem illegal logging, forest fire pre-vention, the distribution of land titles, the promotion of community forest protection schemes and sustainable forest management. Thanks to this wealth of experience, today German development cooperation is acknowl-edged worldwide for its expertise in the field of effective forest governance, which reduces poverty and protects biodiversity at the same time. Germany has also provided the impetus for the establishment and start-up financ-

ing of the multilateral Forest Carbon Partnership Facility (FCPF) which develops important standards and benchmarks for national REDD pro-grammes.



REDD stEp by stEp

REDD is implemented in three phases (see figure below). Ideally these phases follow one another. In practice, however, they often run in parallel with each other be-cause specific needs and settings vary from one partner country to another. Phase 1 (Achieving REDD readiness) aims to put in place the necessary institutional, organi-sational and legal framework in developing countries for performance-dependent payments to be made at a later date for emission reductions. Phase 2 (Policies and dem-

onstration activities) focuses on the actual introduction of national policies and local stand-alone projects which allow stakeholders to learn and demonstrate REDD’s fea-sibility. Finally, in Phase 3 (Performance-based payments based on binding standards) remuneration is provided for verified emission reductions; this is done by direct financial transfers. German development cooperation supports its partner countries during all three phases of a REDD programme.

phAsE 1: pREpARAtIoN AND REDD READINEss

Collecting baseline data at na-tional level, MRV system, REDD strategy and policies, capacity development

phAsE 2: polIcIEs AND DEmoNstRAtIoN ActIvItIEs

Implementation of national REDD strategies and policies, demonstration projects

phAsE 3: pERfoRmANcE-bAsED pAymENts

Remuneration for emission reductions


pRojEcts WoRlDWIDE

Fighting deforestation in BrazilIn 2004 the Brazilian government launched a new policy to fight deforestation in the Amazon Basin: the Action Plan for Prevention and Control of Deforestation in the Amazon (PPCDAm). Within only five years, rates of de-forestation in the region dropped by 75%, from 27,000 km2 in 2004 to below 7,000 km2 in 2010. Over the last 15 years, Germany has contributed more than 300 million euros to help Brazil achieve this remarkable feat. With Ger-man assistance, Brazil has established 53 conservation areas covering a total surface area of 200,000 km2, and has designated 99 indigenous territories with a total area of more than 380,000 km2. These areas are a “green bulwark” against deforestation. In four federal states in the Amazon, environmental authorities have received better equipment and training. In more than 500 small-scale projects, innovative local approaches to sustainable forest management have been tested. Technologies to monitor deforestation on private land have been intro-duced. In 2008 Brazil set up the Amazon Fund, which is currently the most important financial compensation

mechanism for REDD worldwide. Germany has pledged 21 million euros in financial cooperation and 4.5 million euros in technical cooperation to the Amazon Fund to support these positive developments in Brazil.

Forest protection and REDD in EcuadorIn 2008, Ecuador independently launched its Programa Socio Bosque (PSB). PSB pays indigenous and Afro- Ecuadorian communities and private forest owners to undertake forest protection measures. The country thus offers these groups an economic alternative to illegal log-ging. Demand for the programme is high and PSB is cur-rently entering into 20-year agreements with individual partners, i.e. local communities or individuals. Compli-ance is monitored annually, before the next instalment is paid. Germany is providing support of 14 million euros for this programme. The funds currently available to PSB allow about 600,000 hectares of forest to be protected. However, another 4,000,000 hectares are still at risk. The goal of German development cooperation, apart from supporting the protection of additional forest areas, is to


tap new sources of financing for forest protection activi-ties in Ecuador and to support the further development of REDD policies.

REDD in the Lao People’s Democratic Republic With support totalling 20 million euros from Germany, the World Bank, the Japan International Cooperation Agency (JICA) and others, the Ministry of Agriculture and Forestry is setting up the REDD Readiness Plan at the national and local level in the Lao People’s Democratic Republic.

Within the framework of the Lao system of national parks, the first concrete REDD demonstration measures are being conducted in three selected provinces. The partners are testing investment, financing and incentive mechanisms for innovative, poverty-related REDD activi-ties. Local villagers are contributing to and benefiting from the process, especially in land use planning and the co-management of national parks.

This is the first REDD initiative in the Lao People’s Demo-cratic Republic at implementation level, breaking new ground and providing valuable experience for national REDD policies.

REDD pilot measures in IndonesiaIn the joint Indonesian-German forestry programme (funding totalling 28 million euros) with WWF, TNC and AusAID, Germany is helping the Indonesian Ministry of Forestry to establish and implement REDD programmes at national and local level. After identifying priority regions and assessing the socioeconomic feasibility of REDD activities, a grassroots-level pilot project has been put in place. The pilot project is intended to demonstrate that local development, sustainable forest management, biodiversity conservation and climate protection must go hand in hand if they are to be successful.


Projects whose core objective is REDD

Projects whose core objective is the conservation and sustainable mangement of forests

EUR 479 million

AFRICA

LATIn AMERICA AnD CARIBBEAn

EUR 82 million

EUR 507 million

EUR 364 million

ASIA UnD PACIFIC

EUR 40 million

Bilateral REDD pledges [up to 2010, in EUR million]

Brazil 46

Indonesia 28

Lao People’s Democratic Republic 12

Plurinational State of Bolivia 10

Ecuador 14

Regional Latin America & Caribbean 12

Bilateral pledges for forest conservation [up to 2010, in EUR million]

1,500

1,300

1,100

900

200

100

0

122

OtherREDD1,524


17REDD activities of the Federal Ministry for Economic Cooperation and Development (BMZ)

II. The contribution of German development cooperation

The Federal Ministry for Economic Cooperation and Development (BMZ) determines the policies, principles and programmes of development cooperation. The bulk of BMZ funding is dedicated to bilateral cooperation in Germany’s partner countries and regions. The BMZ is currently working with 44 partner countries in the con-text of forest conservation. Together with their partners, the BMZ’s main implementing organisations, GIZ and KfW, are jointly responsible for ensuring the successful implementation of these programmes and projects (see Box “Implementation of Germany’s international coop-eration”).


Implementation of Germany’s international cooperation

On behalf of the BMZ, Germany’s implementing or-ganizations for bilateral development-cooperation conduct tropical forest-conservation and REDD pro-grammes and projects.

KfW Entwicklungsbank is responsible for the imple-mentation of financial cooperation programmes. It provides the funds for investment and also delivers advisory services in partner countries.

GIZ is a state-owned international cooperation enter-prise for sustainable development. Through the serv-ices it provides, GIZ supports complex development and reform processes in partner countries.

At present, BMZ is investing 122 million euros in bilat-eral REDD programmes. Programmes are classified as REDD programmes if all of the following criteria are fulfilled:

> they focus explicitly on reducing emissions from deforestation and degradation;

> they either apply performance-based payments or work towards application of such payments;

> they either verify climate-change-mitigation effects themselves, or work toward their partner countries providing such proof.

More than 1.5 billion euros are being invested in other tropical forest programmes that are also highly relevant for climate change mitigation but are not classified as REDD programmes per se.

A smaller percentage of BMZ funding is allocated to multilateral programmes, such as the Forest Carbon Part-nership Facility (FCPF) set up at the World Bank and the REDD+ Partnership (see boxes “Germany’s contribution to the FCPF” and “The REDD+ Partnership”). Currently the FCPF is receiving 54 million euros from Germany.


Left: Meeting of FCPF members in Oslo, Norway in 2011

Germany’s contribution to the FCPF

Germany has provided the impetus for the establishment, organisation and start-up financ-ing of the multilateral Forest Carbon Partnership Facility (FCPF). The FCPF supports the na-tional efforts of up to 37 partner countries to achieve REDD readiness while also preparing compensation pilot schemes for successful emission reductions. The German government coordinates its activities closely with those of other donors and with the Facility Manage-ment Team at the World Bank. The FCPF is now generating methodological and quality standards for REDD and represents a central forum for mutual learning between partner countries, civil society and donors.

Germany is aiming to achieve active cooperation and synergies between bilateral and multilateral REDD initiatives, especially in those partner countries which place great con-fidence in German development cooperation and have extensive experience in the forest sector as a result of long-standing bilateral cooperation.

Germany’s commitment to countries with major tropical forests is growing rapidly, and with it our wealth of shared experience as to what works and what does not work. Our commitment is based on international technical standards, the fundamental principles of REDD governance and donor coordination, a focus on results, and private sector involve-ment.


The REDD+ Partnership

The REDD+ Partnership was founded in May 2010 in Oslo by 58 countries, both industrial and developing, as a global partnership for moving towards better coordination of REDD implementation, building on the political momentum from Copenhagen 2009. Its main purpose is to enable effective, transparent and coordinated fast action on REDD as well as knowledge transfer both be-tween partner countries themselves and between partner countries and exist-ing multilateral initiatives such as the FCPF.

The REDD+ Partnership is in line with decisions taken by the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC), which encouraged the countries to undertake coordinated efforts and immediate action to provide positive incentives for developing countries in their efforts to reduce forest emissions from forest degradation and deforestation.

By the end of 2010, overall pledges of fast start financing amounted to USD 4 bil-lion from 12 donor countries. The REDD+ Partnership, which today has more than 70 member countries, is regarded as having the potential to evolve into the key international political forum during the interim phase of REDD imple-mentation.


buIlDING oN ExpERIENcE: bENEfItING both DEvElopmENt AND bIoDIvERsIty

Tropical forest conservation has long been an impor-tant priority area of German development cooperation. Worldwide, experience indicates that forests can only be protected if the local population is involved in protection measures and, particularly at the “agricultural frontier”, are offered an economic alternative to destroying the forest. Thus, the sustainable management of forests can be an important element of REDD, alongside forest con-servation and other measures to ease pressure on natural forests. Generally, all REDD activities must maintain or enhance forest biodiversity, since species-rich and di-verse forest ecosystems are more stable and more adap-tive to climate change. In this context it is important to prevent natural forests from being converted into planta-tions with low biodiversity.



REDD: NEW oppoRtuNItIEs AND chAllENGEs

Because of the substantial possible funding, REDD is considered the most promising way of generating the revenues partner countries need to secure tropical forest conservation and sustainable management of forests on a long-term basis. Performance-based compensation pay-ments are aimed at offering real economic alternatives to destructive forms of land use and also help partner countries to embark on a low-carbon development path. However forests can only sequester carbon and success-fully store it if they are strong and healthy. Both these characteristics are directly affected by climate change and can only be maintained if the forests are able to adapt to climate change. Therefore linking mitigation with adap-tation provides greater benefits than considering them separately.

In its support for REDD, the BMZ is guided by the convic-tion that forests are more than simply important carbon stocks but fulfil essential ecological and social functions. While REDD has the potential to alleviate poverty, con-serve biodiversity and reduce emissions, there is also a

risk of it having unintended negative consequences for the poor and marginalised if it is implemented without the appropriate social and environmental safeguards and sound fiduciary standards. Through its development co-operation, Germany is therefore already actively support-ing REDD countries’ efforts to:

> put in place the political and institutional framework needed to protect forests in developing countries;

> enable civil society and local populations who de-pend on forests to be involved in shaping REDD;

> meet the technical requirements for carbon monitor-ing;

> establish performance-based payment schemes for successful emission reductions.

Tropical forest protection and climate change mitigation cost money. It is estimated that between 15 and 20 billion euros will be needed every year for up to 20 years if we are to effectively reduce emissions from forest destruc-


tion. The bilateral and multilateral efforts of the inter-national community must be supplemented by private investment. The role carbon markets could play in this is currently the subject of much debate.

Without the systematic, ongoing and long-term engage-ment of the private sector in our partner countries, here in Germany and in other industrialised countries, it will be very difficult to achieve the ambitious goals that have been set in the field of REDD. Thus, German development cooperation is, in close co-operation with other develop-ment partners and actors, also actively engaged in:

> attracting new stakeholders and allies to the cause of REDD, such as private investors, or ministries of eco-nomics and finance in developing countries;

> supporting transparent REDD financing, improved do-nor coordination and common REDD standards, e.g. in the context of the global interim REDD+ Partnership and the FCPF.




Recommended further reading

The Forest Carbon Partnership Facilityhttp://www.forestcarbonpartnership.org/fcp/

GTZ (2009): Making REDD Workhttp://www2.gtz.de/dokumente/bib-2009/gtz2009-

0534en-redd.pdf

CBD/GIZ (2011): Biodiversity and Livelihoods: REDD benefits http://www.cbd.int/doc/publications/for-redd-en.pdf

FAO (2010): Global Forest Resources Assessment 2010. Key findings. Food and Agriculture Organization, Rome.http://www.fao.org/forestry/fra/fra2010/en/

KfW (2010): Conserving forests to protect our climatehttp://www.kfw-entwicklungsbank.de/ebank/DE_home/I/

Download_center/pDf-Dokumente_broschueren/KfW_

Waldschutzbroschuere_Eng._bf_final_101112.pdf

Acronyms

AusAID Australian Agency for International Development

bmZ Federal Ministry for Economic Cooperation and Development

fcpf Forest Carbon Partnership FacilityGIZ Deutsche Gesellschaft für Internationale

Zusammenarbeit GmbH (German agency for international cooperation)

KfW German development bankoDA Official Development Assistancepsb Programa Socio Bosque (Ecuador)REDD Reducing Emissions from Deforestation and

Forest Degradation tNc The Nature ConservancyuNfccc United Nations Framework Convention on

Climate ChangemRv Monitoring, Reporting and VerificationWWf World Wide Fund for Nature

http://www.forestcarbonpartnership.org/fcp/

http://www2.gtz.de/dokumente/bib-2009/gtz2009-0534en-redd.pdf

http://www.cbd.int/doc/publications/for-redd-en.pdf

http://www.fao.org/forestry/fra/fra2010/en/

http://www.kfw-entwicklungsbank.de/ebank/DE_home/I/Download_center/pDf-Dokumente_broschueren/KfW_Waldschutzbroschuere_Eng._bf_final_101112.pdf

Published by theFederal Ministry for Economic Cooperation and Development (BMZ), Division for development education and information

Edited byBMZ Division for the Environment and Sustainable Use of Natural Resources

DesignBLOCK DESIGN Kommunikation & Werbung, Berlin

Printed byBonifatius Druck und Verlag, Paderborn

Photo creditsp. 1: First Light/F1online, p. 6/7: vario images, p. 9: GIZ/Klaus Schmitt, p. 11 and 16: version-foto.de/Ralf Bäcker, p. 18/19: Weltbank, p. 20/21: blickwinkel/B. Trapp, p. 22: vario images, p. 25: version-foto.de/Ralf Bäcker, p. 26: vario images

As atAugust 2011

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Ready for REDD - bmz.de · Ready for REDD Sharing the experience gained through German development cooperation with Reducing Emissions from Deforestation and Forest Degradation (REDD)