The Role of Governance and Institutions in REDD Operationalising Carbon Finance in Ghana. Roundtable Meeting 27-28 Novem

1. The Role of Governance and Institutions in REDDOperationalising Carbon Finance in Ghana. Roundtable Meeting 27-28 November 2008 Robert Bamfo, Forestry Commission and Michael Richards, FRR/Forest Trends

2. Carbon finance depends on good governance • Institutional & governance constraints increase risks & transaction costs – so the cost effectiveness depends on it • REDD depends on clarification and protection of carbon property rights (including community rights) • Credit buyers conduct country risk assessments, e.g., compliance capacity? will local property rights be protected? etc. • Targeted REDD incentives must reach forest managers or communities cost effectively • Institutional coordination is vital for the success of policies to reduce deforestation

3. REDD should stimulate better governance • REDD is a market or results based incentive for better governance & policies • R-Plan calls for multiple stakeholder participation in developing the REDD strategy • Accountability, transparency, compliance, conflict resolution procedures, etc. are necessary • International pressures for good governance in REDD – could result in a premium? • Links to VPA …

4. REDD – VPA synergies • They have similar aims - reduce deforestation and social/ecological benefits • Legal definitions are key • Role of civil society • Clear standards vital • Monitoring and verification • Transparency & accountability • Both have to tackle the informal sector issues, e.g. how to formalise it? VPA measures can pave the way for REDD – which could help pay for VPA

5. Some national institutional issues • How to channel benefits effectively to forest managers – action research via REDD ‘demonstration activities’ (NB existing beneficiary mechanism for plantation development) • How to improve coordination between sectors especially since the main causes of deforestation are outside the forest sector • National land use policy? • How much decentralisation is good? (should favour transparency) • Is a new specialised institution for carbon finance needed? (Costa Rica model - FONAFIFO)

6. Some institutional roles (from R-Pin) • MLFM and FC: REDD Strategy coordination (FCPF R-Plan Focal Point); data generation/storage; carbon measurement & monitoring (RMSC + CSERGIS); law enforcement coordination • EPA: Climate change policy direction, standard setting, monitoring; NB EPA is the Designated National Authority (DNA) for Clean Development Mechanism (CDM) • District Assembly: byelaws, negotiations, stakeholder platform, enforcement • Traditional Authorities: set byelaws and standards, resource creation, land allocation, mediators, community mobilization • Civil Society (Forest Watch): Monitoring, awareness creation, mediation, etc.

7. Local Institutions • Strong local institutions vital to reduce transaction costs • Collaborative Resource Management Programme, inc. CREMAs • Local government, DAs will play vital role – capacity building • Communities should maintain flexibility in their land use options in REDD contracts • Admin. & technical capacity building is vital, inc. M&E • Action research on benefit-sharing mechanisms

8. Some conclusions • REDD should be as a major incentive for improved governance • The cost-effectiveness of REDD depends on good governance, e.g., keeping transaction costs to a minimum, institutional coordination to reduce deforestation • Clarification of carbon rights and tenure is fundamental • There are clear opportunities for REDD to build on the VPA governance and policy platform • Broad stakeholder consultation and participation in the formulation & implementation of national REDD strategy • Action research (via REDD demonstration activities) is needed on the appropriate institutional arrangements for channeling targeted REDD incentives, and for community level benefit sharing mechanisms • Major capacity building of national and local institutions will be an essential part of Readiness Plan