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A global comparative review of REDD+ benefit sharing mechanisms

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Presented by Moira Moeliono, from the Center for International Forestry Research (CIFOR), at the Knowledge Sharing Event "Sharing Insights Across REDD+ Countries" in Georgetown, Guyana, on June 6, 2017.

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A global comparative review of REDD+ benefit sharing mechanisms

  1. 1. A global comparative review of REDD+ benefit sharing mechanisms CIFOR team Knowledge sharing event Georgetown, Guyana: 6 June 2017
  2. 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. 3. What do we mean by ‘benefit sharing’ in REDD+? • Benefit sharing = distribution of direct and indirect net gains from the implementation of REDD+ • Benefits come with costs: • Direct financial outlays related to REDD+ (implementation and transaction costs) • Foregone revenues from alternative forest land and resource use (opportunity costs) • Benefit sharing mechanism = range of institutional means, governance structures and instruments that distribute the net benefits
  4. 4. Comparative review of benefit sharing mechanisms
  5. 5. • Reviewed existing benefit-sharing mechanisms (BSMs) in REDD+ and forest management • Evaluated BSMs for their potential 3E (effectiveness, efficiency and equity) outcomes, and risks • Comparative analysis of 13 countries based on country profiles developed in 2009-2012, political economy analyses, and other relevant literature reviews • Bolivia, Brazil, Burkina Faso, Cameroon, Democratic Republic of the Congo, Indonesia, Lao PDR, Mozambique, Nepal, Papua New Guinea, Peru, Tanzania, Vietnam Study approach Pham, T.T. et al. (2013)
  6. 6. Effectiveness, Efficiency, Equity  Effectiveness and efficiency = priority is to achieve carbon emission reductions at least cost  Equity = examines who has the right to benefit and aspects of social inclusiveness  Trade-offs are involved between the 3Es depending on the BSM approaches, their design and how they are implemented
  7. 7. Prevalence of effectiveness, efficiency and equity debates in study countries Countries Effectiveness vs. efficiency: Benefits should be used as an incentive to bring about reduction in emissions and should go to actors providing these reductions Equity discourse I: Benefits should go to those with legal rights (statutory or customary) Equity discourse II: Benefits should reward low-emitting forest stewards Equity discourse III: Benefits should compensate those incurring costs Equity discourse IV: Benefits should go to effective facilitators of implementation Brazil X X X X Bolivia X X X X Peru X X X X Indonesia X X X X Vietnam X X X X X Nepal X X X X X Lao PDR X X X X PNG X X X X Tanzania X X X X Burkina Faso X X X X Cameroon X X X X DRC X X X X Mozambique X X X X
  8. 8. • Only four countries (Vietnam, Indonesia, Brazil and Tanzania) have national REDD+ programmes that regulate the distribution of REDD+ finance • Benefit sharing approaches tend to build upon existing models or practices in-country ~ diverse, hybrid • Conflicts of interest and governance issues have delayed implementation of REDD+ policies, and benefit sharing is characterized by minimal interaction between sectors • Many of the “enabling factors” identified as necessary for achieving 3E BSMs are lacking in all countries Study findings (1)
  9. 9. • Market-based instruments: PES (national-level mechanisms in Brazil and Vietnam; projects implemented in almost all countries, most notably in Latin America), CDM/CERs • Community forestry systems: Mixed success in most countries, 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 Tanzania Study findings (2): Common BSM approaches
  10. 10. Market-based instruments (e.g. PES) Collaborative forest management Fund-based models Forest concession revenue-sharing Effectiveness  Well-defined legal framework and likely to be well enforced  Poor performance-based measurement  Weak monitoring of environmental and social impacts Efficiency  Better performance than traditional programmes  Potential for domestic financial sustainability  High transaction costs due to large number of buyers and financial management requirement Equity  National PES programmes also used to address poverty reduction goals, with mixed results  Elite capture problem  Payments can be very low
  11. 11. Market-based instruments (e.g. PES) Collaborative forest management Fund-based models Forest concession revenue-sharing Effectiveness  Well-defined legal framework and likely to be well enforced  Poor performance-based measurement  Weak monitoring of environmental and social impacts  Sustainable implementation with commitment and project ownership of communities and households Efficiency  Better performance than traditional programmes  Potential for domestic financial sustainability  High transaction costs due to large number of buyers and financial management requirement  Higher efficiency through increased community control and poverty reduction of people living near forests  High transaction costs due to large numbers of community members Equity  National PES programmes also used to address poverty reduction goals, with mixed results  Elite capture problem  Payments can be very low  Difficult to achieve equitable distribution, State retains largest share of revenues  Legal framework does not recognize customary or community rights  Elite capture problem
  12. 12. Market-based instruments (e.g. PES) Collaborative forest management Fund-based models Forest concession revenue-sharing Effectiveness  Well-defined legal framework and likely to be well enforced  Poor performance-based measurement  Weak monitoring of environmental and social impacts  Sustainable implementation with commitment and project ownership of communities and households  Independent funds: easy to attract funding, leakage depends on mandate, weak in sector coordination  Funds within state: require strict conditions for additionality, strong for sector coordination and controlling leakage Efficiency  Better performance than traditional programmes  Potential for domestic financial sustainability  High transaction costs due to large number of buyers and financial management requirement  Higher efficiency through increased community control and poverty reduction of people living near forests  High transaction costs due to large numbers of community members  Independent funds: lower transaction costs  Funds within state: low costs only if there is well- functioning administrative structure  Competitiveness increases as REDD+ grows in volume Equity  National PES programmes also used to address poverty reduction goals, with mixed results  Elite capture problem  Payments can be very low  Difficult to achieve equitable distribution, State retains largest share of revenues  Legal framework does not recognize customary or community rights  Elite capture problem  Independent funds: can provide direct local compensation, transparent, potential to capture co- benefits  Funds within state: risk of being used to balance state budgets  Elite capture problem
  13. 13. Market-based instruments (e.g. PES) Collaborative forest management Fund-based models Forest concession revenue-sharing Effectiveness  Well-defined legal framework and likely to be well enforced  Poor performance-based measurement  Weak monitoring of environmental and social impacts  Sustainable implementation with commitment and project ownership of communities and households  Independent funds: easy to attract funding, leakage depends on mandate, weak in sector coordination  Funds within state: require strict conditions for additionality, strong for sector coordination and controlling leakage  ‘Easy’ option to distribute benefits from state-owned forest land  Simple forestry fee and fixed revenue sharing arrangements  Potential over- of under- payments, given differences in opportunity costs Efficiency  Better performance than traditional programmes  Potential for domestic financial sustainability  High transaction costs due to large number of buyers and financial management requirement  Higher efficiency through increased community control and poverty reduction of people living near forests  High transaction costs due to large numbers of community members  Independent funds: lower transaction costs  Funds within state: low costs only if there is well- functioning administrative structure  Competitiveness increases as REDD+ grows in volume  If land tenure is not an issue, transaction costs can be low and large amounts of carbon sequestered efficiently  Quick scale-up potential Equity  National PES programmes also used to address poverty reduction goals, with mixed results  Elite capture problem  Payments can be very low  Difficult to achieve equitable distribution, State retains largest share of revenues  Legal framework does not recognize customary or community rights  Elite capture problem  Independent funds: can provide direct local compensation, transparent, potential to capture co- benefits  Funds within state: risk of being used to balance state budgets  Elite capture problem  Favours large-scale commercial actors  Disadvantages local-level  Excludes local and marginalized people in decision-making process, leading to poor compliance by communities  Elite capture problem
  14. 14. Study findings (3): Equity implications • All countries lean towards allocating benefits to those with legal rights and to compensating those who incur costs • Conflicts between customary and formal rights over land are evident in almost all countries studied • Carbon rights are in infancy with no legal framework • Allocation of REDD+ benefits to reward low emitting stewards is not a priority, potentially marginalizing sustainable forest users
  15. 15. • Unclear and insecure land tenure creates injustice • Under-representation of certain actors in decision-making reduces the legitimacy of REDD+ policies • Lessons on the enabling conditions for REDD+ are disconnected from national decision-making • Decentralisation can be meaningful only if it is coupled with adequate 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 and implementation of REDD+ activities Assessment of risks
  16. 16. • Study has found that there is progress … reviews to clarify land tenure and rights over carbon; investments in monitoring, reporting and verification systems; new agency around the value of standing forests • Risks can be mitigated through … improved coordination, better enforcement; clear guidance for and monitoring of financial flows; improved information exchange; stronger involvement and capacity of all actors • Can REDD+ catalyse these changes? Depends … on how costs and benefits of REDD+ are shared, if benefits are large enough to incentivize change of behavior and policies, and on an inclusive process Concluding thoughts
  17. 17. Terima Kasih! For further information: Pham, T.T., Brockhaus, M., Wong, G., Dung, L.N., Tjajadi, J.S., Loft, L., Luttrell C. and Assembe Mvondo, S. (2013) Approaches to benefit sharing: A preliminary comparative analysis of 13 REDD+ countries. Working Paper 108. CIFOR, Bogor, Indonesia . http://www.cifor.org/online-library/browse/view- publication/publication/4102.html

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