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Engaging the Private Sector in REDD+: challenges and opportunities

Engaging the Private Sector in REDD+: challenges and opportunities. Florence Bernard ASB Partnership / ICRAF. With support from the Norwegian Development Agency. Presentation outline. Research objectives Research methodology Durban agreements Initial key findings

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Engaging the Private Sector in REDD+: challenges and opportunities

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  1. Engaging the Private Sector in REDD+: challenges and opportunities Florence Bernard ASB Partnership / ICRAF With support from the Norwegian Development Agency

  2. Presentation outline • Research objectives • Research methodology • Durban agreements • Initial key findings • Who is the private sector? • Private sector in the REDD+ value chain and motivations • Private sector perspectives • Government perspectives • Key questions

  3. Research objectives • Goal: Improving REDD+ outcomes by fostering successful private sector engagement. • Outcome: Enhanced understanding of current and potential future contributions of the private sector to REDD+ initiatives, and identifying key components of effective private sector engagement. • Output: A policy paper outlining the key lessons learned for successful private sector participation in implementing REDD+ initiatives.

  4. Research methodology • Comprehensive desk review • Semi-structured interviews with key informants at the country and project level (11 interviews conducted) • Review of 16 selected projects : Kenya (2), Cameroon (1), Tanzania (4), DRC (2), Madagascar (2), Zimbabwe (1), Vietnam (2), Philippines (2).

  5. Private sector is a key component in moving forward • Financing gap between current public funding commitments ($4.5bn) and the amounts required to significantly reduce deforestation (estimated at $17bn - $33bn) • COP 17: Private sector sources “could be developed” to fund project activity; financing “may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources” and “appropriate market-based approaches could be developed” • Green Climate Fund : “private-sector facility” intended to enable the sector to finance private-sector mitigation and adaptation activities • Appropriate means and scope of private sector involvement, going beyond financing

  6. Who is the private sector? • Definition : all of the paradigm cases of private firms, including sole proprietorships, partnerships (general, limited, or limited liability), corporations (privately owned or publicly traded), cooperatives and franchises • Diverse array of firm sizes, structures and operations that range from the purely local to national, regional and international in scope. • Not-for-profit ventures, non-governmental organizations and charitable foundations will be treated as a “third sector”.

  7. Private sector in REDD value chain and their motivations • Some medium to large-sized private firms (e.g. Wildlife Works) • Large multinational firms motivated by CSR (e.g. Walt Disney Corporation) • REDD+ investors not developing projects themselves (e.g. Althelia Climate Fund and Ned Bank) • Private consulting companies for capacity building and technical development services (e.g. PDD, establishing Reference Levels, MRV or the accreditation processes) • Small number of companies (e.g. Carbon Neutral) • Companies that are major emitters : to offset their own emissions and reach ‘’carbon neutrality’’ • A lot of CSR-motivated companies

  8. Strategies to incentivize Private Sector investments and create demand for REDD+ ER credits • Number of new multimillion dollar private REDD+ investment funds have been established (e.g. Althelia ($250m), Macquarie-IFC ($25m+), Terra Global Capital ($50m+)) • Compliance markets, including new and emerging compliance markets such as the Australia and California cap and trade systems. • REDD+ delivering more and more VCS and CCB standard carbon credits which are likely to be used to access some compliance regimes • REDD+ opportunities should be brought to the attention of banks, insurance companies, large companies with a CSR orientation, customer sales, event management companies.

  9. The private sector requires a conductive regulatory, institutional and policy framework and active government support in protecting their investments • Need for a strong policy signal such as a national REDD+ strategy and incentive structures to be put in place to drive REDD+ • Level (national or project) of the performance-based payment, question of payments for overall national performance versus project-level performance and risk mitigation mechanisms • Need for a clear land tenure system • Issue of the non-permanence of emissions reductions which needs further insurance

  10. The government also needs some guarantees from the private sector to enable their engagement • Carbon rights: an agreement and Benefit Sharing Mechanism (BSM) needs to be developed • Forest rights: there is a need for a clear understanding of the implications and impacts for the communities’ access to forest resources • Land rights have to be clarified to avoid land-grabbing and appropriation • Potential role of broker raises fairness or equity issues • Need to develop appropriate social and environmental safeguards

  11. Socio-economic International context Regulation/Policy Framework REDD Value Chain

  12. Thank you for your attentionand now…Sharing your thoughts and ideas!

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