The document discusses funding needs and priorities for REDD+ programs. It argues that immediate funding is needed for readiness activities and early implementation demonstration programs. A stabilization facility is proposed that would allocate payments to countries based on forest carbon stocks, to combat leakage and maximize participation. The success of REDD+ depends on both country readiness and large-scale demonstrations of emissions reductions. Early implementation requires up-front capital for activities that reduce emissions before payments are received. Different funding sources are needed over time, including for readiness, early implementation, stabilization of forests without threats, and full implementation with measurable reductions.

1. Characteriza*on
of
Funding
Needs
for
REDD+
Duncan
Marsh
The
Nature
Conservancy
June
18,
2010
REDD+
Partnership
mee*ng

2. Funding
Needs
-­‐
Overview
• Priori*es
for
Immediate
Funding
– Readiness
– Early
Implementa*on
and
Focused
Demonstra*on
Programs
• Catalyst
Funds
• Stabiliza*on
Facility
– Based
on
stock/flow
approach
to
reference
levels
– Would
re-­‐allocate
payments
to
countries
based
on
forest
carbon
stocks.
– Combats
leakage
and
maximizes
par*cipa*on

3. Readiness
&
Early
Implementa*on
The
future
success
of
REDD+
will
depend
both
on
the
readiness
of
a
porUolio
of
countries
to
par*cipate
in
REDD+
programs
but
also,
cri*cally,
on
proven
demonstra*ons
of
the
concept
at
large
scale.
To
go
beyond
readiness,
however,
countries
would
need
up-­‐
front
capital
to
fund
the
ac*vi*es
that
would
actually
begin
to
reduce
emissions—the
period
between
readiness
and
sale
of
ex-­‐post
tons
of
emissions
reduc*ons
(some*mes
called
the
“missing
middle”).
Create
a
bridge
to
pay-­‐for-­‐performance
and
private
investment
–
funding
that
will
be
needed
beyond
public
funding
sources
in
the
future
to
reach
the
goal
of
halving
deforesta*on
by
2020

4. Insights
from
Early
Implementa*on
• How
to
fundamentally
change
forest
sector
dynamics
– important
component
of
low
carbon
development
strategies
• How
to
measure
and
verify
emissions
reduc*ons
with
high
environmental
integrity
• Involving
communi*es
and
equitably
sharing
incen*ves
and
benefits
with
key
stakeholders
• Inclusion
of
social
and
environmental
safeguards
• Crea*ng
the
necessary
legal
and
ins*tu*onal
arrangements
for
carbon
ownership
and
delivery
• Leadership
and
management
structures
of
REDD+
programs
• Effec*ve
financing
structures
• Build
confidence
on
all
sides

5. Elements
of
Readiness
&
Implementa*on

6. Stabiliza*on
Facility
Based
on
Stock/Flow
Approach:
1. Countries
that
reduce
their
flow
of
emissions
from
deforesta*on
and
degrada*on
would
be
eligible
for
payments
as
part
of
the
results-­‐based
(or
“third”)
phase
of
REDD+.
– Might
include
market,
market-­‐linked,
and
non-­‐market
sources.
2. A
por*on
of
payments
for
emissions
reduc*ons
would
be
put
into
a
“stabiliza*on
fund”
that
would
re-­‐allocate
payments
to
countries
based
on
forest
carbon
stocks.

7. Stabiliza*on
Facility
(cont.)
• Investment
in
na*onal
plans
based
on
forest
carbon
stocks:
• forest
protec*on
• sustainable
development
• Funding
• Secng
aside
a
por*on
of
payments
for
REDD+
Ers
o Should
reflect:
a)
poten*al
scale
of
interna*onal
leakage;
and
b)
the
goal
to
maximize
par*cipa*on
• Could
be
complemented
by
support
from
public
sources
• While
the
quan9ty
of
stabiliza*on
funds
would
be
base
on
stocks,
eligibility
to
receive
those
funds
would
be
based
on
stabilizing
emissions
below
designated
levels

8. Funding
Needs
over
Time
Different
ac*vi*es
need
different
funding
sources
at
different
*mes
Poten2al
REDD
Implementa2on
Costs
• Readiness:
Capacity
building,
(US$
Billions)
$60
na*onal
strategies,
reference
levels,
monitoring
systems,
$50
stakeholder
engagement
$40
Full
Implementa*on
• Early
Implementa2on:
Up-­‐front
$30
funding
for
ac*vi*es
that
reduce
$20
emissions
$10
• Stabiliza2on:
Funding
for
$0
conserving
forests
without
historical
threats
Readiness
• Full
Implementa2on:
Stabiliza*on
Measurable,
reportable
and
Early
Implementa*on
verifiable
emissions
reduc*ons

9. Funding
flows
over
*me
For
more
informa*on
on
the
Stabiliza*on
Facility
proposal,
please
refer
to:
hgp://www.theredddesk.org/resources/reports/
establishing_efficient_equitable_and_environmentally_sound_reference_emission_leve

10. Thank
You
dmarsh@tnc.org