Legal and institutional structure

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  • Much of what I have in my presentation is drawn form the Meridian Institute Report (“REDD+ Institutional Options Assessment”). Thank Gurinder for including me and inviting me to talk on the topic of framing what is needed. My goal is to create a structure for discussion.
  • In actuality there is overlap. In the language of the Meridian Institute Report: national REDD+ strategy development and capacity building (Phase 1), implementation of national REDD+ policies and measures (Phase 2), and full-scale implementation (Phase 3). Note I am assuming that the Pay for Performance stage will be an Emissions Tading scheme; however that it not necwessarily the case.
  • Goals of the Readiness Stage are: establishing a national REDD+ strategy; developing a monitoring and verification system; establishing a forest carbon inventory and national reference scenario; and institution and capacity building to support a national REDD+ system. Current Grant Programs include: FCPF, UN-REDD, and various bilateral initiatives.
  • Designated National Focal Point and Recipient/Responsible Institution must have the mandate and legitimacy to consult and plan across sectors and government institutions.
  • Examples of Early Implementation Stage Activities: NAMAs (nationally appropriate mitigation actions) such as incentives to landholders to compensate for the opportunity cost of not clearing land, financing mechanisms to expand and strengthen protected area systems, identification and preparation of degraded land for productive use, and capital to promote low carbon development strategies as an alternative to traditional forest-intensive industries Conservative Accounting System is necessary if the country has not yet completed its National Forest Carbon Inventory and Reference Scenario Note: Although my slide assumes a grant scenario investments in early implementation could be structured as grants, loans, or forward contracts for emissions reductions.
  • Possibly pilot this phase by implementing subnational activities . A market-based model for REDD+ finance will require an authority that certifies the environmental integrity of REDD+ offsets.
  • Possibly pilot this phase by implementing subnational activities. Note activities would also include certain legal and policy reforms that could result in creditable reductions in emissions or enhancements of sinks. A market-based model for REDD+ finance will require an authority that certifies the environmental integrity of REDD+ offsets. Other provisions include: arrangements for carbon ownership and delivery
  • A market-based model for REDD+ finance will require an authority that certifies the environmental integrity of REDD+ offsets. Investor Country Regulatory Agency would: • Request and receive funding from international sources; • Submit country REDD+ strategies; • Submit country REDD+ reports with MRV performance; and • Regularly reporting to the COP or high-level body on REDD+ implementation. • Agreeing to and implementing: • International funding, fiduciary, and reporting procedures; • Standards, MRV methodologies, and other technical procedures; and • Social and environmental standards and grievance procedures. • Overseeing relations with international carbon markets.
  • Legal and institutional structure

    1. 1. Legal & Institutional Structure REDDeX Discussion 14 July 2010 All numbers are draft and US$
    2. 2. Lets talk about.. <ul><ul><li>Who </li></ul></ul><ul><li>Intro Gurinder Tamber </li></ul><ul><li>What’s needed Jonathan Rotter </li></ul><ul><li>Where are we </li></ul><ul><ul><li>Multilateral Context Duncan Marsh </li></ul></ul><ul><ul><li>Indonesia Pak Wahjudi </li></ul></ul><ul><ul><li>Brazil Fernanda Carvalho </li></ul></ul><ul><ul><li>Sub-national Louis Blumberg </li></ul></ul><ul><li>Gap Analysis YOU guys! </li></ul>
    3. 3. Intro <ul><li>3-stage evolution of the REDD sector </li></ul><ul><ul><li>1. “Readiness” activities </li></ul></ul><ul><ul><li>2. Early implementation (EI) or the “the missing middle” </li></ul></ul><ul><ul><li>3. Ex -post pay for performance system </li></ul></ul><ul><ul><li> </li></ul></ul>
    4. 4. Readiness <ul><ul><li> </li></ul></ul>Readiness Investments – public money [Eliasch suggests $4bn over 5 years for 40 countries] Establishing national REDD+ Strategies Developing a MRV system Establishing a forest carbon inventory and national reference scenario Institution and capacity building to support a national REDD+ system Key players: FCPF, FIP, UN REDD
    5. 5. Early Implementation <ul><ul><li> </li></ul></ul>Early Implementation Investments – public and some private players willing to risk capital to learn about the industry Incentives to landholders to compensate for the opportunity cost of not clearing land Financing mechanisms to expand and strengthen protected area systems Identification and preparation of degraded land for productive use Capital to promote LCDS as an alternative to traditional forest-based industries Key players: FCPF, FIP, UN REDD
    6. 6. Payment for Performance (ex-post) <ul><ul><li> </li></ul></ul>Payment for Performance - largely private money <ul><li>Project/sub-national crediting </li></ul><ul><li>Early action crediting </li></ul><ul><li>Nesting </li></ul>- Route to market - Long-term stable demand for credits Key Players - Project developers, brokers, investment banks, funds, FCPF Carbon Fund, Amazon Fund, etc.
    7. 7. REDDeX 14 July 2010 Jonathan Rotter The Nature Conservancy Legal & Institutional Frameworks: What’s Needed
    8. 8. Stages
    9. 9. Readiness Stage <ul><li>Legal Prerequisites </li></ul><ul><ul><li>External (Multilateral or Bilateral) </li></ul></ul><ul><ul><ul><li>Grant Programs </li></ul></ul></ul><ul><ul><ul><li>Grant Agreement </li></ul></ul></ul><ul><ul><li>National </li></ul></ul><ul><ul><ul><li>Proposal to create REDD+ Strategy </li></ul></ul></ul>
    10. 10. Readiness Stage <ul><li>Institutional Prerequisites </li></ul><ul><ul><li>Multilateral Funder </li></ul></ul><ul><ul><li>Bilateral Funder </li></ul></ul><ul><ul><li>Designated National Focal Point and Recipient/Responsible Institution </li></ul></ul>
    11. 11. Early Implementation Stage <ul><li>Legal Prerequisites </li></ul><ul><ul><li>External </li></ul></ul><ul><ul><ul><li>Grant Programs </li></ul></ul></ul><ul><ul><ul><li>Grant Agreement </li></ul></ul></ul><ul><ul><li>Internal </li></ul></ul><ul><ul><ul><li>REDD+ Strategy </li></ul></ul></ul><ul><ul><ul><li>Conservative Accounting System </li></ul></ul></ul><ul><ul><ul><li>Basic monitoring, reporting & verification (MRV) system </li></ul></ul></ul>
    12. 12. Early Implementation Stage <ul><li>Institutional Prerequisites </li></ul><ul><ul><li>Multilateral or Bilateral Funder </li></ul></ul><ul><ul><li>International Observing/Clearinghouse Body? </li></ul></ul><ul><ul><li>Host Country Institution </li></ul></ul>
    13. 13. Pay for Performance Stage <ul><li>International Legal Prerequisites </li></ul><ul><li>International Emissions Trading Structure </li></ul><ul><ul><ul><li>Oversight Authority </li></ul></ul></ul><ul><ul><ul><li>Offset Eligibility Requirements and Standards </li></ul></ul></ul><ul><ul><ul><li>Certification Process </li></ul></ul></ul><ul><ul><ul><li>MRV Requirements </li></ul></ul></ul><ul><ul><ul><li>International Registry </li></ul></ul></ul>
    14. 14. Pay for Performance Stage <ul><li>National Legal Prerequisites </li></ul><ul><li>Internationally Accepted National Forest Carbon Inventory and Reference Scenario </li></ul><ul><li>National Emissions Trading Structure </li></ul><ul><ul><li>Provisions for relationship to international market </li></ul></ul><ul><ul><li>Provision for Private and Subnational Actors </li></ul></ul><ul><ul><li>MRV Procedure </li></ul></ul><ul><ul><li>National Registry </li></ul></ul><ul><ul><li>Other enabling Provisions (e.g. for ownership & delivery) </li></ul></ul>
    15. 15. Pay for Performance Stage <ul><li>Institutional Prerequisites </li></ul><ul><ul><li>International Institutional Arrangement </li></ul></ul><ul><ul><ul><li>COP or Other </li></ul></ul></ul><ul><ul><ul><li>High Level Body </li></ul></ul></ul><ul><ul><ul><li>Technical Advisory Bodies </li></ul></ul></ul><ul><ul><ul><li>Designated Reviewers and Accredited Certification Bodies </li></ul></ul></ul><ul><ul><li>Investor Country Regulatory Institution </li></ul></ul><ul><ul><li>Host Country Regulatory Institution </li></ul></ul>
    16. 16. Thank you

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