Credible baseline setting and accurate and transparent Measurement, Reporting and Verification (MRV) of results are key conditions for successful REDD+ projects. In this presentation, Edenise Garcia from The Nature Conservancy introduces the ‘stock-flow approach’ as a means for establishing efficient, equitable, and environmentally sound reference emissions levels for REDD+. She gives an example as to how this approach might work in the Central Xingu REDD+ Project, Para, Brazil. Edenise Garcia gave this presentation on 8 March 2012 at a workshop organised by CIFOR, ‘Measurement, Reporting and Verification in Latin American REDD+ Projects’, held in Petropolis, Brazil. The workshop aimed to explore important advances, challenges, pitfalls, and innovations in REDD+ methods — thereby moving towards overcoming barriers to meeting MRV requirements at REDD+ project sites in two of the Amazon’s most important REDD+ candidate countries, Peru and Brazil. For further information about the workshop, please contact Shijo Joseph via s.joseph (at) cgiar.org

1. Stock-Flow Approach to Sub-national RELs:
Example from Central Xingu
Bronson Griscom & Rane Cortez
Photo by Peter Ellis
Edenise Garcia
Science Coordinator – Amazon Conservation Program
March 8, 2012

2. What is a Stock-Flow Approach?
A mechanism that provides incentive payments to conserve
forests in both historically high- and low-deforestation
regions while maintaining a level of environmental integrity
through an actual impact on mitigation
A portion of payments for emissions reductions would be
put into a “stabilization fund” that would re-allocate
payments based on forest carbon stocks
Incentive for maintaining forest carbon stocks

3. Here’s an example of how this could be applied
in Central Xingu REDD+ Project, Para, where
TNC is working…

4. Central Xingu Program Area, Southern Para

5. Potential Emissions Reductions by Zones in Central Xingu
(based on simple historic REL)
Source Data: Griscom & Kerkering, 2010, based on data from INPE, Asner et. al. 2005, Saatchi et. al. 2007

6. Carbon Stocks by Zones in Central Xingu
Source Data: Griscom & Kerkering, 2010, based on data from INPE, Asner et. al. 2005, Saatchi et. al. 2007

7. Basic Principles
Reference Emissions Level (REL)
• Historic emissions baseline
• “Business as usual” projection
Accounting vs. Crediting
a direct reflection of involves additional issues
carbon emissions of equity and political
negotiations
Qualifier: This is just an example for technical discussion – many questions
remain to be resolved by Brazilian stakeholders before a municipality scale
REL approach is resolved.

8. Basic Principles
• The design of RELs will affect:
– cost of obtaining the reductions (efficiency)
– distribution of REDD+ revenue across countries and regions (equity), and
– the ability of the REDD+ mechanism to produce credible emissions
reductions (environmental integrity),
• Trade-off between efficiency and equity (and integrity).
A stock-flow approach uses two instruments to minimize the
trade-offs:
Accounting REL determined as simple historic average emissions.
A “stock fund”

9. We propose that the REL is simply the
historic mean emissions.
Why?
Because:
1) Transparency
2) Broaden applicability
3) More complex ≠ more accurate

10. Simple historic REL vs. RELs based
on linear trend analysis

11. Only three States with statistically significant historic linear
trends…

12. Comparison of:
•Actual Deforestation (solid line)
•Modeled linear projection (dotted line)
•Simple Historic mean projection (dashed line)

13. Simple historic REL vs. RELs based
on linear trend analysis
Simple historic mean Error
DO NOT DISTRIBUTE - INTERNAL TNC DOCUMENT

14. OK, but then how do we include areas with low historic
emissions but high stocks, such as Indigenous Lands?
Answer: A “Stock Fund” to re-distribute a portion of incentives
from emissions reductions to areas with high stocks.
historic average REL
allocation to
Stock Fund
Emissions
(GtCO2/yr)
crediting
-10 y START +10y +20y

15. Scenario 1: Simple Historic Mean REL, No Stock Re-Allocation
Central Xingu REDD+ Project Area
Stocks: >1% 10% 1% 27% 22% 39%
Scenario:
•25% ERs
•10 “incentive
nuggets” per
ton CO2
Indigenous Lands
would receive less
than 20% of
incentives, while
holding over 60%
of stocks
Source Data: Griscom & Kerkering, 2010, based on data from INPE, Asner et. al. 2005, Saatchi et. al. 2007

16. Scenario 2: Simple Historic Mean REL, 15% Stock Re-Allocation
Central Xingu REDD+ Project Area
Stocks: >1% 10% 1% 27% 22% 39%
Scenario:
•25% ERs
•10 “incentive
nuggets” per
ton CO2
•15% set aside for
Stabilization Fund.

17. Scenario 3: Simple Historic Mean REL, 30% Stock Re-Allocation
Central Xingu REDD+ Project Area
Stocks: >1% 10% 1% 27% 22% 39%
Scenario:
•25% ERs
•10 “incentive
nuggets” per
ton CO2
•30% set aside for
Stabilization Fund.

18. Rules for Eligibility to Stock Funding
Private Lands:
High past deforestation
REL Zone X
Emissions Rate
Municipality Mean
eligible for SF
Start 20 yrs
PA’s & IL’s:
Low past deforestation
Emissions Rate
develop. ½ Municipality mean
eligible for SF
REL Zone Y
Start 20 yrs

19. Advantages of Stock-Flow Approach
•Environmental Integrity.
•Focus stakeholder negotiations on decision
about trade-off between Equity and Efficiency.
•Relieves pressure to attempt to project
changes from historic rates.
•Can be adjusted to address leakage
issue.

20. thanks!
Edenise Garcia (egarcia@tnc.org)
Rane Cortez (rcortez@tnc.org)
Bronson Griscom (bgriscom@tnc.org)

21. historic average Reference Emissions Level (REL)
country’s self-financed actions
and/or public $
Emissions
(GtCO2/yr)
crediting
-10 y START +10y +20y +30y +40y