REDD: Policy and Implementation Issues


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  • REDD: Policy and Implementation Issues

    1. 1. REDD: Policy and Implementation Issues Frances Seymour Director General Center for International Forestry Research (CIFOR) Jakarta, March 28, 2008
    2. 2. Presentation outline: <ul><li>What is CIFOR? </li></ul><ul><li>Forests, climate change, and governance </li></ul><ul><li>Causes of deforestation and degradation </li></ul><ul><li>Policy options </li></ul><ul><li>REDD opportunities and challenges </li></ul>
    3. 3. A quick introduction to CIFOR: <ul><li>One of 15 centers in the CGIAR </li></ul><ul><li>Focus on forest policy research </li></ul><ul><li>Headquarters in Bogor, Indonesia </li></ul><ul><li>Extensive collaboration with partners in Indonesia </li></ul><ul><li>Staff also based in Brazil, Bolivia, Burkina Faso, Cameroon, Ethiopia, and Zambia </li></ul><ul><li>Research activities in more than 40 countries throughout the tropics </li></ul>
    4. 4. CIFOR’s global research agenda: <ul><li>Forests and climate mitigation </li></ul><ul><li>Forests and climate adaptation </li></ul><ul><li>Small-scale and community forestry </li></ul><ul><li>Sustainable management of production forests </li></ul><ul><li>Conservation and development at landscape scale </li></ul><ul><li>Impacts of trade and investment on forests </li></ul>
    5. 5. Forests and climate emissions <ul><li>Deforestation and degradation accounts for approximately one-fifth of global emissions – more than the transport sector </li></ul><ul><li>Emissions from Indonesia’s forest fires globally significant </li></ul><ul><li>Disproportionate emissions from peatlands </li></ul>Fire on Peat Land
    6. 6. Significance of forest-based emissions (Among top five emitters) Source: Adopted from PEACE (Pelangi Energi Abadi Citra Enviro) report, 2007.
    7. 7. Significance for adaptation to climate change <ul><li>Healthy forests more resistant to forest fire as drought becomes more frequent and severe </li></ul><ul><li>Forest cover helps to anchor and bind the soil as intensive rainfall events become more frequent and severe </li></ul>
    8. 8. Governance poses key challenges: <ul><li>Property rights: Who owns forest carbon? </li></ul><ul><li>Procedural rights (information, participation, and accountability): Who decides? </li></ul><ul><li>Decentralization issues: At what level? </li></ul><ul><li>Institutional choice issues: Who implements, and with what authority, legitimacy, and capacity? </li></ul>
    9. 9. Direct causes of deforestation and degradation: <ul><li>Conversion due to agricultural expansion </li></ul><ul><li>Unsustainable wood extraction </li></ul><ul><li>Infrastructure development </li></ul>
    10. 10. Underlying causes of deforestation and degradation: <ul><li>Market failures </li></ul><ul><li>Misguided policy interventions </li></ul><ul><li>Governance failures </li></ul>
    11. 11. Market failures: Source: Don G. Roberts, Managing Director, CIBC World Markets Inc. Paper For The MegaFlorestais Working Group Meeting In St. Petersburg, Russia <ul><li>Commodity prices continue to rise </li></ul><ul><li>Forest biodiversity and ecosystem services remain unpriced </li></ul>
    12. 12. Misguided policy interventions: <ul><li>Direct and indirect subsidies to key drivers of deforestation and degradation </li></ul><ul><li>Infrastructure development (mining, roads) in forest areas </li></ul>
    13. 13. Governance failures: <ul><li>Unclear property rights </li></ul><ul><li>Overlapping jurisdictions </li></ul><ul><li>Non-transparent decision-making </li></ul><ul><li>Weak law enforcement and judicial systems </li></ul>
    14. 14. Example: oil palm development on peatlands <ul><li>Market doesn’t value biodiversity or carbon sequestration </li></ul><ul><li>Governance failures allow misallocation of land </li></ul><ul><li>Perverse subsidies to biofuels drive investment </li></ul><ul><ul><li>Despite significant negative impact on emissions – 840 years to repay “carbon debt” </li></ul></ul>
    15. 15. Example: Structural overcapacity in the pulp and paper sector <ul><li>Investors fail to do due diligence on legal and sustainable supply of feedstock </li></ul><ul><li>Governance failures allow mills to run on illegally-sourced wood </li></ul><ul><li>Bailout of companies following financial crisis </li></ul>
    16. 16. What replaced natural forests? 1982-2007 WWF Land Cover Database Riau, Indonesia
    17. 17. Policy Options: <ul><li>Economic and financial instruments </li></ul><ul><ul><li>Remove perverse subsidies </li></ul></ul><ul><ul><li>Provide positive incentives </li></ul></ul><ul><li>Strengthen direct regulation </li></ul><ul><li>Strengthen governance mechanisms and institutions </li></ul><ul><li>Can REDD funds support these options? </li></ul>
    18. 18. Eliminate perverse subsidies: <ul><li>… to agricultural expansion that replaces natural forests (including bioenergy and pulpwood) </li></ul><ul><li>… to forest industry without a legal and sustainable supply of wood </li></ul>
    19. 19. Create positive incentives for sustainable forest management: <ul><li>Access to markets through certification </li></ul><ul><li>Access to finance through increased transparency and compliance with safeguards </li></ul><ul><li>Access to payments for ecosystem services </li></ul>
    20. 20. Strengthen direct regulation: <ul><li>Reroute roads and mining activities away from forest areas vulnerable to conversion or degradation </li></ul><ul><li>Provide adequate support to protected area management </li></ul><ul><li>Improve regulation of production forests and conversion </li></ul><ul><li>Strengthen law enforcement (without harming the poor) </li></ul>
    21. 21. Improve management of concession areas: <ul><li>Significant carbon storage and biodiversity benefits can be achieved through improved planning and operational practices </li></ul>
    22. 22. <ul><li>Illegal logging “crackdowns” tend to focus on the little guy with the chain saw rather than the big guy with the bank account </li></ul><ul><li>Need to use law enforcement tools more targeted to the “big guys”, such as anti-money laundering and anti-corruption laws </li></ul>Strengthen law enforcement (without harming the poor):
    23. 23. Strengthen governance mechanisms and institutions: <ul><li>Clarify tenure and strengthen property rights </li></ul><ul><li>Improve the transparency and inclusiveness of decision-making </li></ul><ul><li>Improve intersectoral coordination </li></ul><ul><li>Build capacities of local communities and governments </li></ul>
    24. 24. <ul><li>Strengthening the rights and responsibilities of local communities </li></ul><ul><li>Strengthening the capacities and accountabilities of local governments </li></ul>Example: Community-based fire management Community-based fire brigade Controlled fire for land clearing – community action
    25. 25. REDD opportunities
    26. 26. Outcome of UNFCCC COP13: <ul><li>“Road map” to including REDD in the global climate protection regime </li></ul>
    27. 27. Reduced Emissions from Deforestation and Degradation
    28. 28. Why might REDD succeed? <ul><li>Volume of finance sufficient to shift the political economy of drivers of deforestation and degradation </li></ul><ul><li>Political attention and engagement at the national level </li></ul><ul><li>Performance-based finance </li></ul>
    29. 29. How much money are we talking about for Indonesia? <ul><li>Assume a baseline of 3 billion tons of carbon emissions per year </li></ul><ul><li>Assume a reduction of 20% below the baseline </li></ul><ul><li>Assume a price of $5/ton of avoided carbon </li></ul><ul><li>= $3 billion per year </li></ul><ul><li>By comparison: </li></ul><ul><li>Development aid to the forestry sector in Indonesia over the last two decades = $1 billion cumulative </li></ul><ul><li>Loss to the Indonesian economy from “undocumented” timber extraction = $3 billion per year </li></ul>
    30. 30. Good investments available: <ul><li>Research shows much forest conversion provides limited economic return </li></ul><ul><li>In some cases, <$1 per ton of carbon emitted </li></ul>
    31. 31. Potential for “win-wins”: <ul><li>With local livelihoods </li></ul><ul><li>With biodiversity conservation </li></ul><ul><li>With improved forest governance </li></ul>
    32. 32. 15,430 plant records > 2,100 species 3,642 specific uses 1,449 species 119 non-substitutable Field survey results from 200 plots in East Kalimantan: Example: Forest biodiversity
    33. 33. Low-risk investment options: <ul><li>Leveling the playing field through awareness-raising and consensus-building </li></ul><ul><li>Building capacity of local communities and governments </li></ul><ul><li>Clarifying property rights </li></ul><ul><li>Research and analysis </li></ul>
    34. 34. Higher risk investment options <ul><li>Buy time? (e.g., payments for moratoria on road-building or concessions) </li></ul><ul><li>Buy down demand? (e.g., payments to mothball current and planned processing capacity) </li></ul><ul><li>Bet on the effectiveness of policy reform? </li></ul><ul><li>Construct new PES mechanisms? </li></ul>
    35. 35. … but serious challenges ahead <ul><li>Need for “REDD readiness”: governance mechanisms and institutional capacity </li></ul><ul><ul><li>Decide on payments </li></ul></ul><ul><ul><li>Transfer payments </li></ul></ul><ul><li>Need to manage risks and trade-offs </li></ul><ul><li>Need to establish legitimacy </li></ul><ul><ul><li>Inclusive process </li></ul></ul><ul><ul><li>Equitable outcomes </li></ul></ul>
    36. 36. <ul><li>The most efficient investments are not necessarily the most equitable </li></ul>Managing trade-offs: Lessons from PES
    37. 37. Managing REDD risks: <ul><li>…of leading to human rights violations </li></ul><ul><li>…of making poor people worse off </li></ul><ul><li>…of corruption </li></ul><ul><li>…of ineffectiveness </li></ul>
    38. 38. “ REDD Readiness” will require: <ul><li>Technical components </li></ul><ul><ul><li>baselines and monitoring </li></ul></ul><ul><li>Changes in the political economy of Indonesia’s forests </li></ul><ul><ul><li>Not just the forestry sector </li></ul></ul>
    39. 39. Baselines: The forest transition
    40. 40. Baselines: National? Provincial?
    41. 41. Aceh/Papua Initiatives Irwandi Yusuf Aceh Governor Barnabas Suebu Papua Governor Abraham Atururi West Papua Governor
    42. 42. Indonesia’s REDD process <ul><li>Led by the Ministry of Forestry in preparation for the Bali COP </li></ul>
    43. 43. REDD still controversial: <ul><li>Concern about market mechanisms </li></ul><ul><li>Concern about risks, especially to indigenous peoples </li></ul>
    44. 44. Discussions at “Forest Day” illuminated areas for consensus-building and research: <ul><li>Better data and methods </li></ul><ul><li>Role of markets </li></ul><ul><li>Managing trade-offs </li></ul>
    45. 45. Looking ahead: Poznan and Copenhagen
    46. 46.