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A global comparative review of REDD+ benefit sharing mechanisms

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Grace Wong gave this presentation in Jakarta on 15 May 2013 at a workshop which looked at the context, elements and dynamics of REDD+ in Indonesia.

Grace Wong gave this presentation in Jakarta on 15 May 2013 at a workshop which looked at the context, elements and dynamics of REDD+ in Indonesia.

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  • 1. A global comparative review ofREDD+ benefit sharing mechanismsGrace WongWorkshop on Context, Elements and Dynamics of REDD+ in IndonesiaJakarta, May 15, 2013
  • 2. Presentation Outline Definition of benefit sharing Review of benefit sharing mechanisms in 13 countries Comparing for effectiveness, efficiency and equity Assessment of risks Concluding thoughts
  • 3. What do we mean by‘benefit  sharing’  in  REDD+?• Benefit sharing = distribution of direct and indirect netgains from the implementation of REDD+• Benefits come with costs:• Direct financial outlays related to REDD+ (implementationand transaction costs)• Foregone revenues from alternative forest land andresource use (opportunity costs)• Benefit sharing mechanism = range of institutionalmeans, governance structures and instruments thatdistribute the net benefits
  • 4. Comparative review of benefitsharing mechanisms
  • 5. • Reviewed existing benefit-sharing mechanisms (BSMs) inREDD+ and forest management• Evaluated BSMs for their potential 3E (effectiveness,efficiency and equity) outcomes, and risks• Comparative analysis of 13 countries based on countryprofiles developed in 2009-2012, political economy analyses,and other relevant literature reviews• Bolivia, Brazil, Burkina Faso, Cameroon, Democratic Republic ofthe Congo, Indonesia, Lao PDR, Mozambique, Nepal, PapuaNew Guinea, Peru, Tanzania, VietnamStudy approachPham, T.T. et al. (2013)
  • 6. Effectiveness,Efficiency, Equity Effectiveness and efficiency = priority isto achieve carbon emission reductionsat least cost Equity = examines who has the right tobenefit and aspects of socialinclusiveness Trade-offs are involved between the 3Esdepending on the BSM approaches,their design and how they areimplemented
  • 7. Prevalence of effectiveness, efficiency andequity debates in study countriesCountries Effectiveness vs.efficiency: Benefitsshould be used as anincentive to bringabout reduction inemissions and shouldgo to actors providingthese reductionsEquity discourse I:Benefits should goto those with legalrights (statutory orcustomary)Equity discourseII: Benefitsshould rewardlow-emittingforest stewardsEquity discourseIII: Benefitsshouldcompensatethose incurringcostsEquity discourseIV: Benefitsshould go toeffectivefacilitators ofimplementationBrazil X X X XBolivia X X X XPeru X X X XIndonesia X X X XVietnam X X X X XNepal X X X X XLao PDR X X X XPNG X X X XTanzania X X X XBurkina Faso X X X XCameroon X X X XDRC X X X XMozambique X X X X
  • 8. • Only four countries (Vietnam, Indonesia, Brazil and Tanzania)have national REDD+ programmes that regulate thedistribution of REDD+ finance• Benefit sharing approaches tend to build upon existingmodels or practices in-country• Conflicts of interest and governance issues have delayedimplementation of REDD+ policies, and benefit sharing ischaracterised by minimal interaction between sectors• Many  of  the  “enabling  factors”  identified  as necessary forachieving 3E BSMs are lacking in all countriesStudy findings (1)
  • 9. • Market-based instruments: PES (national-level mechanismsin Brazil and Vietnam; projects implemented in almost allcountries, most notably in Latin America), CDM/CERs• Community forestry systems: Mixed success in mostcountries, Nepal and Tanzania are best known• Fund-based approaches:• Independent: FUNBIO (Brazil), PROFONANPE (Peru)• Managed by State: Amazon Fund (Brazil), Reforestation Fund(Indonesia), FONABOSQUE (Bolivia)• Within State budget: Donor aid (Nepal, Mozambique, Vietnam)• Forest concessions: All countries, except TanzaniaStudy findings (2): CommonBSM approaches
  • 10. Market-basedinstruments (e.g. PES)Collaborative forestmanagementFund-based models Forest concessionrevenue-sharingEffectiveness  Well-defined legalframework and likely to bewell enforced Poor performance-basedmeasurement Weak monitoring ofenvironmental and socialimpactsEfficiency  Better performance thantraditional programmes Potential for domesticfinancial sustainability High transaction costs dueto large number of buyersand financial managementrequirementEquity  National PES programmesalso used to addresspoverty reduction goals,with mixed results Elite capture problem Payments can be very low
  • 11. Market-basedinstruments (e.g. PES)Collaborative forestmanagementFund-based models Forest concessionrevenue-sharingEffectiveness  Well-defined legalframework and likely to bewell enforced Poor performance-basedmeasurement Weak monitoring ofenvironmental and socialimpacts Sustainableimplementation withcommitment and projectownership of communitiesand householdsEfficiency  Better performance thantraditional programmes Potential for domesticfinancial sustainability High transaction costs dueto large number of buyersand financial managementrequirement Higher efficiency throughincreased communitycontrol and povertyreduction of people livingnear forests High transaction costs dueto large numbers ofcommunity membersEquity  National PES programmesalso used to addresspoverty reduction goals,with mixed results Elite capture problem Payments can be very low Difficult to achieveequitable distribution,State retains largest shareof revenues Legal framework does notrecognize customary orcommunity rights Elite capture problem
  • 12. Market-basedinstruments (e.g. PES)Collaborative forestmanagementFund-based models Forest concessionrevenue-sharingEffectiveness  Well-defined legalframework and likely to bewell enforced Poor performance-basedmeasurement Weak monitoring ofenvironmental and socialimpacts Sustainableimplementation withcommitment and projectownership of communitiesand households Independent funds: easy toattract funding, leakagedepends on mandate, weakin sector coordination Funds within state: requirestrict conditions foradditionality, strong forsector coordination andcontrolling leakageEfficiency  Better performance thantraditional programmes Potential for domesticfinancial sustainability High transaction costs dueto large number of buyersand financial managementrequirement Higher efficiency throughincreased communitycontrol and povertyreduction of people livingnear forests High transaction costs dueto large numbers ofcommunity members Independent funds: lowertransaction costs Funds within state: lowcosts only if there is well-functioning administrativestructure Competitiveness increasesas REDD+ grows in volumeEquity  National PES programmesalso used to addresspoverty reduction goals,with mixed results Elite capture problem Payments can be very low Difficult to achieveequitable distribution,State retains largest shareof revenues Legal framework does notrecognize customary orcommunity rights Elite capture problem Independent funds: canprovide direct localcompensation, transparent,potential to capture co-benefits Funds within state: risk ofbeing used to balance statebudgets Elite capture problem
  • 13. Market-basedinstruments (e.g. PES)Collaborative forestmanagementFund-based models Forest concessionrevenue-sharingEffectiveness  Well-defined legalframework and likely to bewell enforced Poor performance-basedmeasurement Weak monitoring ofenvironmental and socialimpacts Sustainableimplementation withcommitment and projectownership of communitiesand households Independent funds: easy toattract funding, leakagedepends on mandate, weakin sector coordination Funds within state: requirestrict conditions foradditionality, strong forsector coordination andcontrolling leakage ‘Easy’  option  to  distribute  benefits from state-ownedforest land Simple forestry fee andfixed revenue sharingarrangements Potential over- of under-payments, givendifferences in opportunitycostsEfficiency  Better performance thantraditional programmes Potential for domesticfinancial sustainability High transaction costs dueto large number of buyersand financial managementrequirement Higher efficiency throughincreased communitycontrol and povertyreduction of people livingnear forests High transaction costs dueto large numbers ofcommunity members Independent funds: lowertransaction costs Funds within state: lowcosts only if there is well-functioning administrativestructure Competitiveness increasesas REDD+ grows in volume If land tenure is not anissue, transaction costs canbe low and large amountsof carbon sequesteredefficiently Quick scale-up potentialEquity  National PES programmesalso used to addresspoverty reduction goals,with mixed results Elite capture problem Payments can be very low Difficult to achieveequitable distribution,State retains largest shareof revenues Legal framework does notrecognize customary orcommunity rights Elite capture problem Independent funds: canprovide direct localcompensation, transparent,potential to capture co-benefits Funds within state: risk ofbeing used to balance statebudgets Elite capture problem Favours large-scalecommercial actors Disadvantages local-level Excludes local andmarginalized people indecision-making process,leading to poor complianceby communities Elite capture problem
  • 14. Study findings (3):Equity implications• All countries lean towards allocatingbenefits to those with legal rights and tocompensating those who incur costs• Conflicts between customary and formal rightsover land are evident in almost all countriesstudied• Carbon rights are in infancy with no legalframework• Allocation of REDD+ benefits to rewardlow emitting stewards is not a priority,potentially marginalising sustainable forestusers
  • 15. • Unclear and insecure land tenure creates injustice• Under-representation of certain actors in decision-makingreduces the legitimacy of REDD+ policies• Lessons on the enabling conditions for REDD+ aredisconnected from national decision-making• Decentralisation can be meaningful only if it is coupled withadequate capacity building for local government• The  scale  and  scope  of  the  definition  of  ‘forest’  and  land  tenure systems can lead to differences in the design andimplementation of REDD+ activitiesAssessment of risks
  • 16. • Study  has  found  that  there  is  progress  …  reviews  to  clarifyland tenure and rights over carbon; investments inmonitoring, reporting and verification systems; new agencyaround the value of standing forests• Risks can be mitigated through  …  improved  coordination,  better enforcement; clear guidance for and monitoring offinancial flows; improved information exchange; strongerinvolvement and capacity of all actors• Can REDD+ catalyse these  changes?  Depends  …  on  how  costs  and benefits of REDD+ are shared, if benefits are large enoughto incentivize change of behavior and policies, and on aninclusive processConcluding thoughts
  • 17. Terima Kasih!For further information:Pham, T.T., Brockhaus, M., Wong, G., Dung, L.N., Tjajadi, J.S., Loft, L., Luttrell C. andAssembe Mvondo, S. (2013) Approaches to benefit sharing: A preliminarycomparative analysis of 13 REDD+ countries. Working Paper 108. CIFOR, Bogor,Indonesia . http://www.cifor.org/online-library/browse/view-publication/publication/4102.html