Funding Opportunities from Climate Change Adaptation and REDD+

VINAY SINGH

Expert - Adaptation and Conservation

For BEA International,

Nairobi, Kenya

25th June 2013

Natural Forest Deforestation & Degradation

Planted Forest

Various types of Fund for Climate Change & REDD+

• Carbon Funds

• Adaptation Funds

• REDD+ (Reduced Emission from Deforestation & Degradation)

CARBON FUNDS

The Adaptation Fund is a fund established by parties to the UN Framework Convention on Climate Change (UNFCCC) to finance concrete adaptation projects and programmes in developing countries that are parties to the Kyoto Protocol.

Carbon Funds are funds established with the objective of allowing participants to invest in projects that seek to reduce GHGs emissions worldwide

ADAPTATION FUNDS

REDD + FUNDS

REDD+ is a mechanism to create an incentive for developing countries to protect, better manage and wisely use their forest resources, contributing to the global fight against climate change.

FUNDING FOR ADAPTATION & REDD+ PROJECTS

Climate and Land Use Alliance: A collaborative initiative of the Climate Works Foundation; David and Lucile Packard Foundation; Ford Foundation; and Gordon and Betty Moore Foundation

Congo Basin Forest Fund: Congo Basin Forest Fund (CBFF) is a multilateral mitigation fund administered by the African Development Bank, committed to building capacity to tackle deforestation and poverty in the Congo Basin region.

Ecosystem Services for Poverty Alleviation Programme (ESPA): The Ecosystem Services for Poverty Alleviation Programme (ESPA) is an international research programme funded by the government of the UK in coordination with universities and research centres.

Forest Carbon Partnership Facility: The Forest Carbon Partnership Facility (FCPF) is a global partnership administered by the World Bank that assists developing countries in reducing emissions from deforestation and forest degradation; forest carbon stock conservation; sustainable management of forests; and enhancement of forest carbon stocks (REDD+). The facility demonstrates how REDD+ can be applied at the country level and thereby complements the UNFCCC negotiations on REDD+. The FCPF became operational in 2008

Global Climate Change Alliance: The alliance is a multilateral initiative of the European Commission and EuropeAid, aimed at funding projects for climate change- related opportunities in Least Developed Countries while at the same time promoting dialogue and South-South cooperation.

FUNDING FOR REDD+ PROJECTS

International Climate Initiative – Germany: This initiative of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports climate protection and biodiversity conservation projects.

Sustainable Forest Management (SFM)/REDD+ Programme: The SFM/REDD+ Programme focuses on efforts to prevent, control and reverse desertification and land degradation. It is administered by the Global Environment Facility (GEF) which draws on guidance provided from three international conventions dealing with forests; the Convention on Biological Diversity (CBD); the United Nations Framework Convention on Climate Change (UNFCCC)

UN-REDD Programme: The UN-REDD Programme is a multi-donor trust fund (MDTF) that allows donors to pool resources and provide funding to support the REDD+ mechanism which aims to reduce global emissions from deforestation and forest degradation in developing countries. The Programme, which is a collaborative initiative by the three UN agencies, UNDP, FAO & UNEP

Climate Change Funds

Of the three Rio Conventions, the United Nations Convention on Climate Change (UNFCCC) is the one that has received much attention and subsequently funding for its objectives.

Key Activities to Fund for REDD+

• An institutional framework for REDD implementation at community level;

• Establishing baseline scenarios for potential carbon sources

• The development and implementation of measures for addressing drivers of degradation and forest deforestation

Key Activities to Fund for REDD+ contd…

• Monitoring evaluation and documentation of project performance and impacts: Monitoring can help us to understand how biodiversity and ecosystem services respond to the different REDD+ activities. The challenge is to reconcile the need for data on these impacts with the limited resources available

• Methodology Selection: VCS approved methodology to be applied or in case the methodology in not available, then new methodology to be designed and get approved from VCS board.

Why funding for Adaptation & REDD + is of Utmost importance

• The Mau Forest has a significant impact on the local climate, especially water flows, not only of Kenya but also on the entire East Africa region.

• The forest covers the upper catchments of 12 rivers that drain into 05 major lakes.

• The cutting of forest reserves, combined with continuous and widespread encroachment, has led to the destruction of approximately 25 percent of the Mau Forest over the last 15 years.

• Devastating effect on water towers

Forest Area (% of Land Area) in Kenya is 6.1% (World Bank 2012)

Amalgamation

TEA GROWERS AGRICULTURAL

COMMUNITIES

INDIGENOUS PEOPLE

PRIVATE INDUTRIES

CONSERVE NATURAL

FOREST , BY REDD+

ADAPTATION STRATEGIES

Private sector is a key component in moving forward

• 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

Private sector in REDD value chain and their

motivations

(iv) End buyers through carbon

credit purchasing

(iii) Brokers through carbon credit trading and retailing

(ii) Advisors through capacity

building and technical

development

(i) Producers through project

development and investment

• 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

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 (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.

PUBLIC PRIVATE PARTNERSHIP (PPP)

• 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

Government Role

• 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

The Role of the Private Sector in REDD+

• The private sector is a source of implementation, innovation and investment and is a key REDD+ stakeholder. Private sector engagement must be broadened to slow, halt and reverse forest loss.

• Two main private sector groups are relevant in the context of REDD+: a) those focused on producing verified emission reductions (VERs) and b) those involved in the supply chains of forest-risk commodities.

• Approaches for engagement fall into four categories: incentives, risk mitigation instruments, setting of minimum standards and enabling conditions.

• The UN-REDD Programme can assist partner countries in engaging the private sector through convening, catalyzing and the sharing of experience and lessons learned.

Case Studies on VCS REDD+

• REDD+ projects are found across parts of Asia, Africa and Central and South America.

• There are 27 REDD projects across the globe

- 11 are located in Asia;

- 04 in Africa;

- 02 in the Pacific; and

- 10 in Central and South America

Real Scenario in REDD projects

• Most of the 27 projects are dealing with multiple drivers of deforestation and forest degradation, and thus required multiple REDD+ strategies to mitigate the deforestation

• 14 of the 27 projects have been validated against the voluntary Climate, Community and Biodiversity Standards, which require project developers to commit to a biodiversity monitoring plan, and to monitor and mitigate potential negative offsite biodiversity impacts caused by the shifting of deforestation drivers from within to outside the project areas.

Adopted strategies in existing REDD+ Projects

• Payment to communities for provision of ecosystems services & creation of alternative livelihoods through training, grants, microfinance, business creation, etc.

• Tree planting for land rehabilitation and timber supply (enrichment planting, reforestation, assisted natural regeneration)

• Engaging local communities in activities to protect & enhance carbon stocks (patrols, tree planting, fire fighting etc.) &/or MRV

• Strategies to reduce fuel wood use

• Community and indigenous people’s safeguards

REDD+ strategies contd…

• Improving agricultural productivity, practices and resilience (for local agriculture)

• Strengthening local government/community institutions for forest management/REDD+

• Community‐based forest management planning & controls

• Stopping large‐scale conversion for agriculture

• Stop commercial logging

Voluntary schemes used for REDD project validation

1. Climate, Community and Biodiversity Alliance (CCBA)

2. Voluntary Carbon Standard (VCS)

3. Plan VIVO (Plan Vivo scheme aims to support improved management by communities of their natural resources to generate climate, livelihood and ecosystem benefits.)

Case Study 1– BELIZE

Boden Creek Ecological Preserve (BCEP)

Location: Toledo District, Belize

Project Area (Ha) = 5,214

Causes of Deforestation: Deforestation mostly due to conversion for export crops (banana and citrus) are projected to result in deforestation of ~40% of the Preserve over 20 years.

Start Date: 2005

Accounting period: 24 years

Forest type: Tropical evergreen broad‐leaved lowland forest

Drivers of DD: Forest clearance for cattle, citrus & banana plantations; Extraction of valuable timber species

Rates of DD: 2.3% annual national deforestation rate

Case Study 1– BELIZE cont…

Climate benefits Total: 1,442,957 tCO2e

Annual average: 60,124 tCO2e

Annual average per ha: 11.5 tCO2e

Annual Monetary Benefits: 60,124 x 5 USD = 300620 USD (0.3 Million USD)

(VCUs Issued and being traded in International Market)

Social and biodiversity safeguards:

- employment of local community personnel

- Biodiversity: Initial biodiversity metrics developed for bat species, medium‐large mammals, and avian and mammalian listed IUCN species.

Case Study 2– INDIA

Umiam Sub‐watershed REDD+ Project, East Khasi Hills District Meghalaya, India

Location: East Khasi Hills District, Megahalaya, India

Project Area (Ha) = 8,379

Start Date: N.D.

Accounting period: 30 years

Forest type: Sub‐tropical pine forest, Grassland and savannas, Sacred Groves

Drivers of DD: Fuelwood collection, Grazing, Fire, Stone quarrying

Rates of DD: 5.6%, 2000‐2005

Case Study 2– INDIA contd….

Climate benefits Total: 412,824 tCO2e (rough estimate)

Annual average: 13,761 tCO2e (rough estimate)

Annual average per ha: Afforestation included

Annual Monetary Benefits: Verification to be conducted

Social and biodiversity safeguards: Improved livelihood and biodiversity conservation

Case Study 3 – AMAZON

Madre de Dios Amazon REDD Project

Location: Madre de Dios department, Peru

Project Area (Ha) = 97,817

Start Date: 2009

Accounting period: 38 years

Forest type: Tropical wet forest, Subtropical wet forest

Drivers of DD: Road construction; Migration resulting in forest clearance by farmers; Illegal logging

Rates of DD: N.D.

Case Study 3 – AMAZON cont…

Climate benefits Total: 25,072,135 tCO2e

Annual average: 659,793 tCO2e

Annual average per ha: 6.75 tCO2e

Annual Monetary Benefits: 659,793 x 7 USD = 4618551 USD (4.6 Million USD)

(VCS Registered project and issuance in process)

Social and biodiversity safeguards:

- employment of local community personnel

- Biodiversity conservation is the main focus on endangered species.

Case Study 4 – KENYA

The Kasigau Corridor REDD Project Phase Ⅰ‐ Rukinga Sanctuary

Location: Coast Province, Kenya

Project Area (Ha) = 30,168.66

Start Date: 2005

Accounting period: 30 years

Forest type: Montane forest, Dryland forest, Savannah grassland

Drivers of DD: Clearing by subsistence farmers

Rates of DD: 2.77%, 1995‐1999

Case Study 4 – KENYA cont…

Climate benefits Total: 6 Million VCUs

Issued VCUs = 0.3 million Annual Monetary Benefits: 0.3 x 8 USD = 2.4 Million USD)

(VCS Registered project and VCUs issued)

Social and biodiversity safeguards:

• the process of the independent audit of the community influence conducted in August 2007 and with adequate financial support from the carbon project

• permanent teams of rangers who patrol daily on foot checking for the presence of wildlife and for evidence of illegal activities, such as snaring, wood harvesting, illegal grazing or charcoal production

Few Private Sector Forest Carbon Offset Buyers and Project Investors, 2011-2012

The private sector remained the largest pool of buyers of forest carbon credits, contracting 12.3 MtCO2e from developers in 2011.

REDD+ Bilateral & Multilateral Finance Organizations

AFRICA BY NUMBERS, ALL MARKET 2011, POTENTIAL

Only 2.4 Million,

there is lot to do

in regard to

forest

conservation

Forest Conservation & Legal Issues in India

• Forest Conservation Act in India stopped many mining activities and hill city development; like Lavassa Hill City, mining in Orissa

• Company & Industries did not considered the mandatory requirement of forest conservation act

FORESTS ARE THE LUNGS OF EARTH

SO CONSERVE FORESTS…..?