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png_presentation_irpa_meeting_11_march_2010_paris

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  • 1. Moving forward: Interim REDD+ Partnership Arrangement Towards a long-term International REDD+ Mechanism Paris, France 11 March 2010
  • 2. Agenda 1. PNG’s Experience: Development & REDD+ 2. Status for REDD+ post-Copenhagen 3. Thoughts on the Institutional Needs for an Interim REDD+ Arrangement 4. Conclusions and Next Steps Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 1
  • 3. Papua New Guinea’s Climate-Compatible Development Strategy has three overarching goals to be achieved together Strategic framework Goals Economic Development: Achieve GDP per capita of US$ 3,000 by 2030 (from US$ 1,000 in 2009) while meeting our people’s Development aspirations for a better life. Mitigation: Reduce emissions of greenhouse gases, by at least 50% Climate by 2030 and become carbon Compatible neutral by 2050. Over 90% of this Develop- goal will come from REDD+ ment Mitigation Adaptation Adaptation: Invest to reduce the vulnerability to the risks associated with climate change, such as coastal and inland flooding, malaria and agricultural yield change. SOURCE: McKinsey Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 2
  • 4. PNG’s “Vision 2050” implies strong growth, relying heavily on agriculture, mining, oil, gas and services Assumptions for growth by sector GDP by sector Agriculture and forestry ▪ Food crops ▪ 1% yield & 1% area p.a. Constant 2007 USD bn Mining, oil and gas Agri- ▪ Palm oil ▪ 2% yield & 7.5% area p.a. Manufacturing culture and ▪ Coffee ▪ 2% yield p.a. Services forestry ▪ Cocoa 28 ▪ 2% yield p.a. 26 ▪ Forestry ▪ Slow rate of increase 24 ▪ Gold ▪ Double production by 2020 22 Mining, ▪ Copper ▪ Double production by 2020 20 7-8% oil and ▪ Nickel ▪ Double production by 2020 18 gas ▪ Oil ▪ Gradual decline 16 ▪ Gas ▪ Open 2 plants (2013,2023) 14 ▪ Manufac- ▪ 8% p.a. 12 turing 10 Industry ▪ Construction ▪ 8% p.a. 8 ▪ Power ▪ 5% p.a. for all 6 ▪ Retail ▪ 8% p.a. 4 ▪ Transport ▪ 8% p.a. 2 Services ▪ Telecoms ▪ 8% p.a. 0 ▪ Tourism ▪ 10% p.a. 2007 2010 2015 2020 2025 2030 ▪ Fin. services ▪ 8% p.a. Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 3
  • 5. Overall, emissions can be reduced by 50-75% by 2030 on PRELIMINARY the way to carbon neutrality by 2050 Emissions from all sectors under maximum abatement scenario Mt of CO2e/ year; 2005-2030 140 130 1) Smallholder Business as Usual agriculture 120 high growth 110 emissions path 2) Palm oil plantations 100 90 50- 3) Timber harvesting (SFM) 75% 80 70 6) Fire management 60 4) Afforestation/Reforestation 50 Low-carbon 5) Secondary forest mgmt growth and 40 Non-forestry sectors emissions path (oil/gas, power, 30 transport) 20 10 0 2005 2010 2020 2030 SOURCE: REDD+ working group and McKinsey analysis Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 4
  • 6. Predictability of funding necessary for developing countries to embark on a low carbon growth pathway Political and economic … needs to be risk associated with balanced with difficult economic adequate, predictable, transformations… sustainable funding $ Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 5
  • 7. Agenda 1. PNG’s Experience: Development & REDD+ 2. Status for REDD+ post-Copenhagen 3. Initial Thoughts on the Institutional Needs for an Interim REDD+ Arrangement 4. Conclusions and next steps Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 6
  • 8. The Copenhagen Accord includes substantial financial commitments Principles of Copenhagen Accord Funding and next steps Funding of CDM versus Copenhagen ▪ Sets goal for all countries to limit global USD billion temperature rise to less than 2 degrees above pre-industrial level CDM 2008 ▪ Recognises that mitigation in developing countries must go together with economic Copenhagen development ~10 2010-12 average ▪ Broadens scope of mitigation actions to Copenhagen more countries and sectors, including ~100 2020 target land-use change and forestry ▪ Confirms REDD+ as a critical component Next steps of mitigation ▪ Over 70 countries have made public ▪ Raises importance of adaptation and commitments to mitigation and provides additional funds adaptation actions since Copenhagen ▪ Commits developed countries to ▪ The Accord envisages continued unprecedented financial support overall, engagement through the UNFCCC rising to $100bn per year by 2020 process, leading to COP-16 in Mexico Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 7
  • 9. Short term financing committed through a ‘fast start’ partnership Fast start funding per annum 2010–12 $bn ▪ Formal commitment of $30bn for 2010-12 by developed countries – Adaptation and REDD +54% strongly emphasized 0.5 – Mechanism for channelling funds unclear ▪ Goal of $100bn per year by 2020 in long-term finance – Sources undefined – Governance systems to be defined EU Japan Norway Others Total CDM – CDM not addressed 2008 (yet) SOURCE: Copenhagen Accord, National announcements,WB. Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 8
  • 10. AS OF JAN 12 The role of REDD recognized and $3.5bn so far committed $3.5bn committed for REDD-plus… $bn, total 2010-12 …but commitment is only first step $bn 100% = 3.5 20.0-35.0 Japan Norway Australia 3.5 0.12 1.00 France 0.35 2010-12 2010-15 committed required 0.48 €15–25bn ($20-35bn) is required UK for early action on REDD+ 1.00 between 2010–15 for a decrease US in global deforestation rates of 25% [IWG-IFR] 2010–12 commitments approx 1/3 of required level SOURCE: IWG-IFR, press search, McKinsey Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 9
  • 11. REDD+ almost completed within the UNFCCC Body Overview ▪ REDD+ part of future regimes Conference ▪ Apply IPCC Methods for carbon estimation of the Parties ▪ National forest monitoring systems (steps toward) ▪ Guidance for Demonstration Activities ▪ National forest monitoring systems SBSTA ▪ if appropriate, sub-national systems as part of national monitoring systems ▪ historic data, and adjust for national circumstances ▪ Principles AWG-LCA ▪ Safeguards ▪ Inclusive of all REDD+ Actions ▪ Phased Approach ▪ Ambition (reductions and finance) Remaining ▪ Structure of Financial Mechanism (NAMAs?) Issues ▪ National Accounting (role of sub-national) ▪ Systems for MRV of Actions and Support Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 10
  • 12. Agenda 1. PNG’s Experience: Development & REDD+ 2. Status for REDD+ post-Copenhagen 3. Thoughts on the Institutional Needs for an Interim REDD+ Arrangement 4. Conclusions and next steps Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 11
  • 13. NOT EXHAUSTIVE Overview of the current landscape of major REDD+ initiatives REDD+ Initiative Payment ▪ FCPF Readiness Fund ▪ Pay readiness plan and ($180 / $155 / $10 / $3*) readiness activities Multilateral funds ▪ FCPF Carbon Fund ▪ Pay for readiness and ($55 / $34/ $0 / $0*) emission reductions ▪ Pledges: USD ~ $1 bil. ▪ UN REDD Programme ▪ Pay for readiness ($74 / $54 / $10 / $16[$2]*) preparations ▪ Disbursed ▪ FIP ▪ Pay for readiness directly to ($406 / $0 / $0 / $0*) transformation REDD+ : USD ~10 ▪ GEF ▪ Pay for projects million ($250 / $0 / $0 / $0*) ▪ CBFF ▪ Pay for projects ($200 / $200 / $? / $?*) ▪ The Amazon Fund ▪ Pay for performance Bilateral partnerships ▪ Guyana REDD+ Investment ▪ Pay for performance Fund (GRIF) Other ▪ NGO’s ▪ n/a (Initiative specific) ▪ VC’s * $ Pledged / $ Received / $Secretariat, $ Paid Out SOURCE: FCPF; UN-REDD Programme; CBFF; FIP Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 12
  • 14. There is pressing need to restructure existing REDD+ efforts Situation today… … needs to be improved ▪ Lack of coordination ▪ Establishment of central coordination ▪ Overlapping governance ▪ Clear responsibilities ▪ Significantly underfunded ▪ Funding from multiple sources ▪ Inconsistent methods ▪ An agreed set of guidelines ▪ Learning silos ▪ Best practise and knowledge exchange ▪ Inefficient decision-making ▪ Clear and lean processes ▪ Misguided stakeholder involvement ▪ Appropriate and timely consultation ▪ Un-integrated development planning ▪ National development strategies Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 13
  • 15. An institutional and finance framework should be built Responsible: to support the financing process IRC Interim REDD+ Com. DC Developing Countries Top down assessment Generation of bottom-up of funding need by a analysis (climate plans) mandated institution by developing countries Pledging process to 1 2 3 ensure predictability Strategy and sustainability of Scope design and funding planning Commit- IRC DC ments IRC IRC 4 Assessment of Assess- commitments ment and actions Implemen- DC tation 6 IRC Developing countries MRV1 DC taking action that matches the level of 5 commitments MRV of funding and actions Payment by verified results 1 DC responsible for Measurement and Reporting, with HLB overseeing Verification Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 14
  • 16. A phased approach provides flexibility and immediate action Potential scope for interim financing ▪ National ▪ REDD+ strategy commitment to ▪ Multi-stakeholder consultation develop REDD+ ▪ Minimum monitoring capability ▪ Advanced monitoring strategy ▪ Safeguards capability Phase 1 Phase 2 Phase 3 ▪ Design a REDD+ ▪ REDD+ strategy ▪ REDD+ strategy strategy implementation implementation – Grant payments a) Grants for – Payments for enablers verified emission b) Payments for reductions and Keystone, i.e., removals emission the interim reductions incentive measured by system verified proxies SOURCE: IWG IFR Secretariat Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 15
  • 17. National options for distribution of finance based on policies or drivers International forestry finance All units registered nationally National Accounting to avoid ‘double counting’ national State can opt to invest directly fund and keep the credits centrally... regions/ …and /or devolve credits provinces to regional level …and / or allow investors and communities to certify projects and receive credits in return Source: The Eliasch Review Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 16
  • 18. Public finance needed before carbon markets can be phased in during the medium term 2030 target: carbon market finance could make the sector carbon neutral Funding Funding gap: $11-19 billion per year in 2020 Global cap 2020 projection: carbon and trade market finance could be $7 billion per year and fund a 22% cut in deforestation Funds from partial emissions access to carbon markets 2012 Short term Medium term Long term Source: Modelling for the Eliasch Review Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 17
  • 19. National level institutions built around a set of principles Principle Description Development of ▪ Developing countries should establish a governance national structure that matches the global finance mechanism, governance supports strengthening of national institutions, and functions ensures development of technical bodies Strengthen ▪ National trust funds should be made to work reliably and transparently national trust funds ▪ Equitable and fair benefit distribution ▪ Prudent financial management Transition to ▪ Developing countries may enter partnerships with international institutions to ensure fiduciary oversight direct access to funds ▪ Developing countries should over time develop own process and capabilities Flexible choice of ▪ The choice of implementing partners should be under national control of developing countries implementing agencies ▪ Encourage public-private partnerships Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 18
  • 20. In a REDD+ institutional framework, a REDD+ fund with three windows supporting a phased approach Authority Information COP Apply lessons learnt from FCPF, FIP and UN REDD Programme High Level Body Registry & Verification Interim REDD+ Committee (i) MRV funding (ii) MRV action Standards Climate Fund(s) Incentive Systems Single fund REDD+ Fund with three funding streams Bi-, multi-lateral & Strategy design Implementation Performance Bi-lateral funds Market-based national Bi-lateral and planning (incl. investment) proxies carbon credits Funding flows controlled Funding flows controlled by Committee / COP Funding flows by Parties, accounted by controlled by the Committee / COP private sector Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 19
  • 21. Agenda 1. PNG’s Experience: Development & REDD+ 2. Status for REDD+ post-Copenhagen 3. Thoughts on the Institutional Needs for an Interim REDD+ Arrangement 4. Conclusions and Next Steps Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 20
  • 22. Suggested outcomes from today’s discussion ▪ Agree to work together towards the establishment of an ‘Interim REDD+ Partnership Arrangement’… ▪ … which should be guided by and support UNFCCC negotiations ▪ Start process today (Paris meeting of March 11)… ▪ … finalize arrangements by May 27 at the ‘Oslo Climate and Forest Conference’ ▪ be informed by a thorough review of the status quo (actions, finance and institutions) which should be completed asap ▪ draft concepts for the Interim REDD+ arrangement could be submitted asap ▪ Virtual group of facilitator countries (4+4) overseeing a small technical ‘secretariat’ to drive process in an inclusive and transparent manner ▪ Outcome to include ‘Oslo Accord for an Interim REDD+ Partnership’ including a scale-up plan for funding Interim REDD+ Partnership Arrangement –11 March 2010 - Paris | 21

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