Duncan marsh redd_partnership_18_june_2011

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

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

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

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

Elements of Readiness & Implementa*on

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.

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

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

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

Thank You dmarsh@tnc.org

Duncan marsh redd_partnership_18_june_2011

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