Characteriza*on of Funding Needs for REDD+ Duncan Marsh The Nature Conservancy June 18, 2010 REDD+ Partnership mee*ng
Funding Needs -‐ Overview • Priori*es for Immediate Funding – Readiness – Early Implementa*on and Focused Demonstra*on Programs • Catalyst Funds • Stabiliza*on Facility – Based on stock/ﬂow approach to reference levels – Would re-‐allocate payments to countries based on forest carbon stocks. – Combats leakage and maximizes par*cipa*on
Readiness & Early Implementa*on The future success of REDD+ will depend both on the readiness of a porUolio of countries to par*cipate in REDD+ programs but also, cri*cally, on proven demonstra*ons of the concept at large scale. To go beyond readiness, however, countries would need up-‐ front capital to fund the ac*vi*es that would actually begin to reduce emissions—the period between readiness and sale of ex-‐post tons of emissions reduc*ons (some*mes called the “missing middle”). Create a bridge to pay-‐for-‐performance and private investment – funding that will be needed beyond public funding sources in the future to reach the goal of halving deforesta*on by 2020
Insights from Early Implementa*on • How to fundamentally change forest sector dynamics – important component of low carbon development strategies • How to measure and verify emissions reduc*ons with high environmental integrity • Involving communi*es and equitably sharing incen*ves and beneﬁts with key stakeholders • Inclusion of social and environmental safeguards • Crea*ng the necessary legal and ins*tu*onal arrangements for carbon ownership and delivery • Leadership and management structures of REDD+ programs • Eﬀec*ve ﬁnancing structures • Build conﬁdence on all sides
Stabiliza*on Facility Based on Stock/Flow Approach: 1. Countries that reduce their ﬂow of emissions from deforesta*on and degrada*on would be eligible for payments as part of the results-‐based (or “third”) phase of REDD+. – Might include market, market-‐linked, and non-‐market sources. 2. A por*on of payments for emissions reduc*ons would be put into a “stabiliza*on fund” that would re-‐allocate payments to countries based on forest carbon stocks.
Stabiliza*on Facility (cont.) • Investment in na*onal plans based on forest carbon stocks: • forest protec*on • sustainable development • Funding • Secng aside a por*on of payments for REDD+ Ers o Should reﬂect: a) poten*al scale of interna*onal leakage; and b) the goal to maximize par*cipa*on • Could be complemented by support from public sources • While the quan9ty of stabiliza*on funds would be base on stocks, eligibility to receive those funds would be based on stabilizing emissions below designated levels
Funding Needs over Time Diﬀerent ac*vi*es need diﬀerent funding sources at diﬀerent *mes Poten2al REDD Implementa2on Costs • Readiness: Capacity building, (US$ Billions) $60 na*onal strategies, reference levels, monitoring systems, $50 stakeholder engagement $40 Full Implementa*on • Early Implementa2on: Up-‐front $30 funding for ac*vi*es that reduce $20 emissions $10• Stabiliza2on: Funding for $0 conserving forests without historical threats Readiness • Full Implementa2on: Stabiliza*on Measurable, reportable and Early Implementa*on veriﬁable emissions reduc*ons
Funding ﬂows over *me For more informa*on on the Stabiliza*on Facility proposal, please refer to: hgp://www.theredddesk.org/resources/reports/establishing_eﬃcient_equitable_and_environmentally_sound_reference_emission_leve