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Climate funding opportunities: REDD+ funds

Briefing to the ACP Group of States July 19, 2012, ACP Secretariat, Brussels Duncan Brack , dbrack@dbrack.org.uk Consultant to the ACP GCCA Programme (LTS- Baastel -CAMCO). Climate funding opportunities: REDD+ funds. Outline. REDD+ concept Three multilateral initiatives in detail:

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Climate funding opportunities: REDD+ funds

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  1. Briefing to the ACP Group of States July 19, 2012, ACP Secretariat, Brussels • Duncan Brack, dbrack@dbrack.org.uk Consultant to the ACP GCCA Programme (LTS-Baastel-CAMCO) Climate funding opportunities:REDD+ funds Intra-ACP GCCA Programme

  2. Outline • REDD+ concept • Three multilateral initiatives in detail: • Forest Carbon Partnership Facility (FCPF) • Forest Investment Programme (FIP) • UN-REDD • Three initiatives more briefly: • Congo Basin Forest Fund (CBFF) • Australia’s International Forest Carbon Initiative • Clean Development Mechanism (CDM) • REDD+ funding in practice • The future Intra-ACP GCCA Programme

  3. 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 Intra-ACP GCCA Programme

  4. 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 Intra-ACP GCCA Programme

  5. Challenges • Reference levels • Leakage • Permanence • Safeguards • Governance • Measuring, reporting and verifying (MRV) • Finance Intra-ACP GCCA Programme

  6. 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 Intra-ACP GCCA Programme

  7. ‘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. Intra-ACP GCCA Programme

  8. 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 Intra-ACP GCCA Programme

  9. 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 Intra-ACP GCCA Programme

  10. Multilateral initiatives funding ($m) See Table 3 in paper (page 12–13) for developing country participation in initiatives Intra-ACP GCCA Programme

  11. 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 Intra-ACP GCCA Programme

  12. Regional distribution ($m) Intra-ACP GCCA Programme

  13. 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 Intra-ACP GCCA Programme

  14. 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, observers Intra-ACP GCCA Programme

  15. 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%) Intra-ACP GCCA Programme

  16. 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-sectoralpolicies: poverty reduction, agriculture • Stakeholder consultation processes • Challenges to implementation • Potential monitoring and implementation systems • Plan and tentative budget ($4.82 million) Intra-ACP GCCA Programme

  17. 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 Intra-ACP GCCA Programme

  18. 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 Intra-ACP GCCA Programme

  19. 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 Intra-ACP GCCA Programme

  20. 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 Intra-ACP GCCA Programme

  21. 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 Intra-ACP GCCA Programme

  22. 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 Intra-ACP GCCA Programme

  23. 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 Intra-ACP GCCA Programme

  24. 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 architecture Intra-ACP GCCA Programme

  25. 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 Intra-ACP GCCA Programme

  26. 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 Intra-ACP GCCA Programme

  27. FIP: examples of projects • DRC: addressing deforestation and degradation in the Kinshasa supply area ($36.9 million, December 2012) • Mexico: strengthening financial inclusion of ejidosand 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) Intra-ACP GCCA Programme

  28. UN-REDD (1) • Some countries not keen on World Bank • FAO / UNDP / UNEP initiative, operational 2008 • 42 partner countries 16 of them with national programmes • Funding: • $150.8m pledged • $118.2m deposited • $108.1m approved (71.7%) • $90.9m disbursed (60.3%) Intra-ACP GCCA Programme

  29. 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 Intra-ACP GCCA Programme

  30. 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 Intra-ACP GCCA Programme

  31. 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. Intra-ACP GCCA Programme

  32. 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 Intra-ACP GCCA Programme

  33. 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 Intra-ACP GCCA Programme

  34. 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. Intra-ACP GCCA Programme

  35. 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%) Intra-ACP GCCA Programme

  36. 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 Intra-ACP GCCA Programme

  37. 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) Intra-ACP GCCA Programme

  38. 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%) Intra-ACP GCCA Programme

  39. 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) Intra-ACP GCCA Programme

  40. 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 Intra-ACP GCCA Programme

  41. 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 Intra-ACP GCCA Programme

  42. 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) Intra-ACP GCCA Programme

  43. 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) important Intra-ACP GCCA Programme

  44. 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 markets Intra-ACP GCCA Programme

  45. 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 Intra-ACP GCCA Programme

  46. 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 Intra-ACP GCCA Programme

  47. 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 Intra-ACP GCCA Programme

  48. 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.’ Intra-ACP GCCA Programme

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