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Design of 3E REDD+ Benefit Sharing Mechanisms: Learning from Other Experiences

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This presentation was given by CIFOR scientist Maria Brockhaus at a COP20 side-event titled "Benefit and Burden Sharing in Forest Policies and REDD+" in Lima, Peru.

The event addressed the benefits and costs associated with forest conservation initiatives across multiple countries, and their equity implications. It builds on results gathered from an ongoing multi-year European Commission-funded project aimed to provide policy options and guidance to improve the design, development, and implementation of REDD+ benefit sharing mechanisms.

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Design of 3E REDD+ Benefit Sharing Mechanisms: Learning from Other Experiences

  1. 1. Design of 3E REDD+ Benefit Sharing Mechanisms: Learning from Other Experiences Maria Brockhaus, Grace Wong, Cecilia Luttrell, Lasse Loft, Anastasia Yang and Shintia Arwida COP 20 Lima, Peru, 9 December 2014
  2. 2. CIFOR’s Global Comparative Study (GCS-REDD+) • To support REDD+ policy arenas and practitioner communities with - information - analysis - tools • so as to ensure 3E+ outcomes: - effectiveness - efficiency - equity and co-benefits
  3. 3. EC-funded: Opportunities and challenges to developing REDD+ benefit sharing mechanisms in developing countries  To provide REDD+ policymakers and practitioners with policy options and guidance to improve the design, development and implementation of REDD+ benefit sharing mechanisms. - Review of existing performance-based distribution and benefit-sharing mechanisms - Estimating the costs and benefits of REDD+ Policies and Measures, and of REDD+ projects - Understanding multi-level forest governance as the context for REDD+ and assessing rights to REDD+ benefits - Comparative options assessments to guide the development of REDD+ benefit sharing mechanisms
  4. 4. What do we mean by benefit sharing?  Benefit sharing is the distribution of direct and indirect net gains from the implementation of REDD+  Two types of direct benefits: • Monetary gains and cash incentives from international and national finance related to REDD+ • Benefits associated with the increased availability of forest products and ecosystem services  Indirect benefits, e.g. improved institutional and governance processes  Benefit sharing mechanisms (BSM): Range of institutional means: governance structures and instruments that distribute finance and other net benefits from REDD+
  5. 5. Assessing 3Es in BSM: incentives, institutions, outcomes A 3E BSM design for REDD+ needs to address:  the distribution of incentives  creation of enabling institutional conditions  change in LU practices to realize carbon and non-carbon outcomes  Effectiveness: relates to the environmental, social and economic impacts or performance of the instrument  Efficiency: the level of administrative and social costs associated with the instrument to achieve the policy objectives  Equity: 1) procedural refers to participation in decision making and inclusion and negotiation of competing views; 2) distributive refers to the allocation of outcomes and their impacts on different stakeholders Luttrell et al. 2013; McDermott et al. 2013 5
  6. 6. Why a review of other sectors and experiences for REDD+ benefit sharing? 1. How to operationalize equity, identifying target groups, setting up eligibility criteria? 2. Should incentives be provided for inputs or outcomes to change behavior? 3. What is the process of participation and decision-making (institutions) at multiple levels? 4. How is accountability and outcomes measured/ monitored?
  7. 7. Lesson from …  Lessons derived from current BSMs: Payment for Ecosystem Services (PES), Community Forestry systems (CF), Conditional Cash Transfers (CCT), Indigenous People’s trust funds in Brazil (IPTF), and European Rural Development Policy (RDP)  Lessons from governance practices: Anti-corruption measures in Indonesia (ACM), standards and certification (S&C); VPAs under FLEGT Loft et al. 2014; Wong 2014; Gebara et al. 2014; Forthcoming: Nawir et al., Yang; Arwida et al.; Tjajadi et al.
  8. 8. Lessons from …. PES Review of lessons from PES of relevance to BS CF Review of BS issues in various community forestry models in Indonesia and Nepal CCT Review of cash transfers regarding the use of conditionality , the impact of cash transfers and targeting IPTF Lessons from the Pater Surui and Kayopo funds as examples of trust fund mechanisms RDP Lessons from a voluntary output based incentive for land management across Europe ACM Selection of oversight and transparency mechanisms in Indonesia including EITI, state audits, anti-corruption agency, multi-stakeholder approaches cross ministry and enforcement agencies, online permit application system and budget monitoring S& C Review or various certification standard schemes and how they operationalise equity (Fairtrade, FSC, CCB, Plan Vivo etc) VPAs Review of relevant aspects from experience of VPAs for BS (MRV and multistakeholder processes
  9. 9. 1. Operationalizing equity a) Techniques for assessing and recognizing the level of costs and to whom they are accruing - S&C periodic review of producer costs (Fairtrade) b) Setting fair and minimum payments c)Establishing phased and upfront payments (but need to make sure financial incentives are maintained till end - Plan Vivo TGB) d) Paying attention to the type of benefit • A focus on development activities and in kind benefits • The pros and cons of cash • Securing of rights
  10. 10. 2. Increasing efficiency as a key element in cost and benefit sharing a) The use of input rather than output indicators b) Addressing scale e.g. bundling smallholders into groups (Son La and Lam Dong) c) Using targeting to increase effectiveness and efficiency d) Clarifying tenure
  11. 11. 3. Institutional design to enhance efficiency and effectiveness a) Using existing governance systems to reduce costs b) Role of local government c) Role of intermediaries - collect and distribute payments and to promote the scheme to potential beneficiaries. Examples include the National Fund for Forest Financing (FONAFIFO) which manages the Costa Rica PES and the independent private nongovernmental institution (FAS) which manage the Bolsa Floresta program d) Coordination
  12. 12. 4. Accountability through MRV a) Inclusion and participation in process b) Transparency - Lack of transparency in the land fee distribution process in Cameroon from the transparent distribution of money to the transfer to the local Governments accounts c) Dispute resolution
  13. 13. Negotiating options – key lessons.. PES: - helps understanding risks (elite capture) and advantages (effective collection/ distribution) of the role of intermediaries in cross-scale transactions CF: - indicates that allocation of rights is a more sustainable incentive than performance or input based incentives in a situation when difficult for theses incentives to reflect true transaction and opportunity costs CCT: indicates that: a) cash may be more effective than in-kind transfers to ensure more flexible, efficient and effective incentives; b)conditionalities bring effectiveness but are costly;
  14. 14. and more … so much to learn – IPTF : - creates awareness that heavy safeguards requirements of funds may restrict IP participation RDP: - indicates that targeting to poorer areas helps to achieve equity objectives ACMs – requires a (budgeted for) coordination mechanism and strong !! authority C&S: - shows that integrate minimum price guarantee can lower risks VPAs under FLEGT: - highlights a) need to plan for time and compromise involved in inclusive multi-stakeholder process (MSP); b) the value of dispute resolution mechanisms & transparency
  15. 15. This presentation draws from the following CIFOR research:  Assembe, S. et al. 2013. Assessment of the effectiveness, efficiency and equity of benefit sharing schemes under large-scale agriculture: Lessons from land fees in Cameroon, European Journal of Development Research  Arwida S. et al. (Forthcoming) Lessons from anti-corruption measures in Indonesia  Gebara MF. et al. 2014. Lessons from local environmental funds for REDD+ benefit sharing with indigenous people in Brazil. CIFOR InfoBrief 98. Bogor, Indonesia: CIFOR.  Kowler LF. et al. 2014. The legitimacy of multilevel governance structures for benefit sharing: REDD+ and other low emissions options in Peru. CIFOR InfoBrief 101. Bogor, Indonesia: CIFOR.  Loft L. et al. 2014. Lessons from payments for ecosystem services for REDD+ benefit-sharing mechanisms. CIFOR InfoBrief 68. Bogor, Indonesia: CIFOR.  Loft, L. et al. (Forthcoming) Taking stock of carbon rights in REDD+ candidate countries: Concept meets reality.  Luttrell et al. 2013. Who should benefit from REDD+? Rationales and realities. Ecology and Society 18(4): 52.  Myers, R. et al. (2014) Who holds power in land use decisions? Implications for REDD+ in Indonesia. CIFOR InfoBrief 100. Bogor, Indonesia: CIFOR.  Nawir A. et al. (Forthcoming) Lessons from community forestry in Nepal and Indonesia  Pham T.T. et al. 2013. Approaches to benefit sharing: A preliminary comparative analysis of 13 REDD+ countries. Working Paper 108. Bogor, Indonesia: CIFOR.  Pham T.T. et al. 2014. Local preferences and strategies for effective, efficient and equitable PES benefit distribution options in Vietnam: Lessons for REDD+. Human Ecology.  Tjajadi, J. et al. (Forthcoming) Lessons from environmental and social sustainability certification standards  Wong G. 2014. The experience of conditional cash transfers: Lessons for REDD+ benefit sharing. CIFOR InfoBrief 97. Bogor, Indonesia: CIFOR.  Yang, A. (Forthcoming) Lessons from Scotland’s Rural Development Policy.
  16. 16. Thank you! http://www1.cifor.org/redd-benefit-sharing/home.html The CIFOR REDD+ Benefit Sharing project is supported by: With co-financing from:

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