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“Appropriate market based mechanisms cannot include trading carbon as offsets”: Accra Caucus intervention during UN REDD finance workshop

Last week a UN meeting on results based finance for REDD took place in Bonn, Germany. “Workshop on results-based finance for the full implementation of the activities referred to in decision 1/CP.16, paragraph 70”, to give it its full title. The aim of the UN work programme on REDD finance is to “contribute to the ongoing efforts to scale up and improve the effectiveness of finance for REDD-plus activities”.

This discussion has been going on for several years. Before COP18 in Doha, environmental law organisation Client Earth produced a summary of the submissions to the UN on REDD finance, available here.

Last week’s meeting in Bonn was the second time that the UN has considered REDD finance since Doha. In June 2013, a workshop on REDD finance took place during the the Subsidiary Body for Scientific and Technological Advice (SBSTA) meeting. The meeting was chaired by Indonesia and Norway – Indonesia’s (now defunct) REDD+ Task Force’s report of the meeting is available here.

The mandate of UN work programme on REDD finance includes the following three items:

  • Ways and means to transfer payments for results-based actions;
  • Ways to incentivize non-carbon benefits;
  • Ways to improve the coordination of results-based finance.

During its June meeting, SBSTA produced a draft text to be considered at COP19 in Warsaw. This draft text includes sections on non-market-based approaches to financing REDD, and non-carbon benefits of REDD. In both cases, SBSTA invited Parties and observers to submit comments by 26 March 2014, to be considered during the SBSTA meeting in June 2014.

The Accra Caucus, a network of NGOs representing about one hundred civil society and indigenous peoples’ organisation from 38 countries, made the following intervention during last week’s workshop in Bonn:

Accra Caucus intervention – REDD+ results based finance workshop

Bonn, 22nd August 2013

Dear co-chairs and Parties, thank you for this opportunity to speak. I am Samuel Nnah Ndobe representing the Accra Caucus on Forests and Climate Change. I would like to comment on the interaction between safeguards, non-carbon benefits, and finance.

The Cancun and Durban decisions are clear that countries must address the Cancun safeguards in order to access results based finance. Reporting on the safeguards provides a crucial threshold, yet the social, environmental and governance aspects included in the safeguards will require ongoing attention, to ensure effective and permanent emission reductions.

In this workshop we are discussing results based finance, yet as many countries have pointed out, there has been little progress on the ‘readiness phases’ of REDD. Defining results so narrowly as carbon, may make it difficult to ensure that ongoing support is available. It will also incentivize countries to invest in technical MRV systems, rather than to implement policies that result in emissions reductions.

Experience from the ground shows that recognition of customary rights and security of land tenure is the best way to protect forests from the wide range of drivers to deforestation and forest degradation. Lack of secure tenure poses the greatest challenge to implementing REDD+, but incentivizing such actions does not mean quantifying them. Results based finance can address the drivers of deforestation by rewarding increased tenure, use and access rights of forest dependent communities, based on changes in national laws and policies. This is just one example of simple indicators for monitoring non-carbon benefits as part of results based payments.

Finally, I would like to comment on sources of finance – we have heard that REDD costs are not covered with a carbon price of $5 a tonne. With oversupply in the European emissions trading system, carbon markets have collapsed with CDM credits currently trading for 60c a tonne. Carbon markets are neither a reliable source of finance, nor capable of reducing emissions when credits sold as offsets allow emissions to continue. Appropriate market based mechanisms cannot include trading carbon as offsets.

Results based finance must take account of these key challenges, to ensure environmental and social aspects are incentivized, drivers which threaten tenure security are addressed, and the risks of failure to reduce emissions are minimized.

Thank you for your attention.

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  2. “Appropriate market based mechanisms” is an oxymoron.

    Instead, they should have said:

    “Using REDD forest carbon as offsets is a particularly potent and expedient way that market based mechanisms do more harm than stated good to saving the climate or ecosystems.”

  3. This is not a completely accurate statement. Government compliance never works but a standardization of the emission off-set must be defined by a national entity. But REDD’s are seeing the same problem as REC’s and EEC’s, until the public sector embraces them as a monetization source of income. They will struggle.

  4. Climate Action Network also made an intervention during the Bonn workshop:

    Intervention for the Results-Based Finance Workshop
    August 22, 2013
    Bonn, Germany

    Thank you chairs. We welcome the space to discuss Non-Carbon Benefits with you, which are essential to REDD+’s success and long-term sustainability.

    My name is Allie Silverman and on behalf of Climate Action Network, we would first like to comment on the relationship between safeguards and Non-Carbon Benefits. We do NOT see these as two competing tracks between which you have to choose. Safeguards are not only necessary and required for REDD+, but also demonstrating that safeguards are met and respected is the only way to access results for payments.

    When it comes to Non-Carbon Benefits, we believe that successful monitoring of REDD+ should encompass more than just measuring carbon. National forest monitoring systems should support holistic monitoring that can provide information on implementation of safeguards, additional benefits from REDD+, drivers of deforestation, as well as emissions. Noting the discussions that have taken place today, Parties need to leave adequate space for non-carbon elements to be incorporated into monitoring systems.

    Now, I would like to briefly share three concrete recommendations on NCBs on behalf of the members of the Redd-Safeguards Working Group. The recommendations are more fully discussed in our briefing.

    Our starting point is that Non-Carbon Benefits are crucial to achieving the permanent carbon benefits; thus, they are crucial to the long-term success of REDD+. Focusing on NCBs is not about diluting the aims of REDD+ or turning REDD+ into traditional official development assistance. Moreover, while the focus on REDD+ within the UNFCCC is still on climate change mitigation, we recognize that this mechanism also has a crucial adaptation component. In order to achieve long-lasting mitigation and adaptation effects, we know that REDD+ has to deliver a range of benefits. Non-Carbon Benefits are therefore not results that can be separated from the carbon results of REDD+, but rather important results to formally incentivize in order to achieve sustainable and permanent emission reductions. This is “good news,” and there is more on the horizon!

    1) Our first recommendation is to establish specific international criteria that will be used as basic guidance for defining non-carbon benefits at the national level. Coming up with criteria rather than an international definition is important in recognizing that each country has its own priorities and conditions, which will impact how NCBs are defined and which are specifically relevant.

    International criteria will, however, be needed in order to ensure that nationally defined NCBs are related to what will be needed to achieve permanent emission reductions. Thus, elevating the link between SG and NCBS between now and COP 19 is very important.

    2) The second recommendation is to make sure that NCBs are incentivized throughout all phases of REDD+. It is important to note some of the Parties’ concerns yesterday related to incentives and funding for phases I and II. While this workshop is focused on results-based finance, NCBs can and should be incentivized throughout ALL phases of REDD+; and these incentives structures may change throughout the three different phases. Ex-ante financing of NCBs will be important to create the appropriate enabling conditions necessary to achieve real, long-lasting emission reductions.

    Incentives may however also be non-monetary. In relation to the results-based phase of REDD+, one promising idea for incentivizing NCBs would be to use NCBs as a basis for assessing risk and prioritizing funding because greater NCBs will increase the longevity and reduce the risk of reversals of emission reductions.

    3) Our third recommendation deals with monitoring. We believe that NCBs need to be monitored to determine whether they are actually achieved through REDD+ finance. The good news is that countries can use existing structures to monitor NCBs, so it should not be a huge burden. For example, countries are already developing safeguard information systems and national forest monitoring systems, which will likely generate most of the information needed to achieve NCBs.

    IMPORTANTLY and NECESSARILY, in compliance with the obligatory safeguards outlined in the Cancun Agreement, Parties need to recognize local communities’ and indigenous peoples’ roles in NCBs. In fact, their full and effective participation must be ensured throughout. Parties are required to fully respect human rights, including those of indigenous peoples. More good news: Community-based monitoring has already proven to be successful.

    In conclusion, access to results based payments should be tied to promoting these non-carbon benefits, in addition to the safeguards. The financing mechanism should support and sustain the enhancement of NCBs that are essential to achieving integrated sustainable development.

    Again, thank you for the opportunity to express these thoughts on the importance of defining, incentivizing and monitoring the tangible benefits that move REDD+ beyond carbon.