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UNDP’s response to Norway in relation to Green Climate Fund’s “results based” payment to Indonesia reveals no mechanism for dealing with double counting, and how few REDD projects there are in the country

Posted on 30 September 202030 September 2020

By Chris Lang

In August 2020, the Green Climate Fund approved US$103.8 million of supposedly “results-based” funding for the period 2014 to 2016. The Green Climate Fund’s board approved the funding despite the horrific fires in Indonesia’s peatlands in 2015. To make matters worse, Indonesia is planning a series of infrastructure projects and a “Job Creation Bill” that will lead to further deforestation.

REDD-Monitor wrote about the Green Climate Fund’s extraordinary decision to fund Indonesia’s failure to address the causes of deforestation here:

The post on REDD-Monitor included a statement from the Green Climate Fund’s board meeting by Norway’s board member, Hans Olav Ibrekk from the Ministry of Foreign Affairs. Ibrekk raises the issue of “environmental integrity”, but doesn’t mention the 2015 fires in Indonesia.

He also mentioned the issue of double-counting as a result of private REDD projects in Indonesia and noted that the GCF Secretariat had provided information to Norway, but that the information should be provided to all board members.

REDD-Monitor made a information request to the Green Climate Fund for the information that the Secretariat provided to Norway. The GCF replied with UNDP’s response to Norway at the end of last week. It is posted in full here, followed by my observations.

The proposal has included details about all funding that Indonesia has received for REDD+ results in the UNFCCC context as it is required by the ToR of the GCF pilot programme. To note here that the voluntary peatland and forest-related private projects listed in VERRA’s project database are neither part of the UNFCCC framework nor is the Government of Indonesia party to these agreements. In addition, these projects are defined and certified under private standards utilizing different methodological approaches from the UNFCCC framework. However, to address Norway’s earlier question on this topic, and in recognition of the importance to fully address questions of any double-counting, we have provided an unofficial aggregate estimate of the tonnes generated by:

  • All VCS-validated projects (4 validated; 1 still under validation): (i) Katingan Peatland Restoration and Conservation Project; (ii) Rimba Raya Biodiversity Reserve Project; (iii) Mangrove Restoration and Greenbelt protection (Aceh/Sumatra); and (iv) Sumatra Merang Peatland Project
  • All Plan Vivo-validated projects (only 2): (i) Bujang Raba; And (ii) Rimbak Pakai Pengidup. These two projects are extremely small in comparison to the VCS projects and only one has issued credits during the GCF reporting period (i.e 47,910 tco2e only for 85,820 tco2e overall)

These estimates are derived from the VCS and Plan Vivo registries and reproduced below:

  • The total volume of VCUs generated by these projects since their respective start is 43M tco2e to date (50M tco2e including buffer, which totals 6.9M tco2e), for project periods starting from 2008 (Rimba Raya), 2010 (Katingan), 2011 (Mangrove Restoration), 2013 (Bujang Raba), 2017 (Sumatra Merang), 2018 (Rimbak Pakai Pengidup) until 2019. This volume issued corresponds therefore to a period much larger than that of results presented to the GCF (2014-2016).
  • Though vintages do not allow to narrow down credits issued exactly for the GCF period for all projects, once removing vintages that clearly do not overlap with the GCF results period, credits issued fall to 22.8M tco2e (29.6M tco2e incl. the 6.9M tco2e total buffer, which does not allow to identify the project period) for vintages overlapping partly or fully with the GCF results period, which is therefore still an overestimate.
  • From these 22.8M tco2e, only 2.6M tco2e are actually retired (i.e. paid for).

The volume of ERs offered to GCF (27M tco2e) represents only 19% of the total volume of ERs (145M tco2e), which leaves 118M tco2e unpaid.

So, even if (i) we were to account for all credits issued by these projects to date (i.e. beyond the GCF results period) and (ii) we consider that all credits issued have been sold, this would still leave a remaining 74.7M tco2e unpaid (including a deduction of ER offered to GCF), or 67.9M tco2e taken the buffer into account. This represents an extremely large overestimation of actual VCM credits paid for during the GCF period, and as only 2.6M tco2e are actually retired, the remaining ER results are likely to be rather close to 115M tco2e (108M tco2e with buffer). As such, these issued credits do not pose significant risk to the ER Indonesia offered to GCF. Furthermore, in line with the ToR of the GCF pilot programme, Indonesia has submitted a letter assuring that no other party has a competing claim to REDD+ results presented to GCF for payments. If, despite the existing regulation and safeguard measures in place, competing claims were to be presented by a third party, the Government of Indonesia will take full responsibility and necessary legal measures.

UNDP’s reply to Norway’s question reveals that there is no formal mechanism for dealing with double-counting of voluntary carbon credits generated by private REDD developers when it comes to results-based payments to states. UNDP’s response relies on the fact that there are very few REDD projects in Indonesia, and they have sold very few carbon credits.

In total UNDP came up with five REDD projects in Indonesia that have actually sold carbon credits – the project starting date is in brackets:

  1. Rimba Raya Biodiversity Reserve Project (2008);
  2. Katingan Peatland Restoration and Conservation Project (2010);
  3. Mangrove Restoration and Greenbelt protection (Aceh/Sumatra) (2011)
  4. Bujang Raba (2013)
  5. Sumatra Merang Peatland Project (2017)

That short list is in stark contrast to the list on the International Database on REDD+ projects and programmes produced by the Center for International Forestry Research (CIFOR), Chaire Economie du Climat, the French Agricultural Research Centre for International Development (CIRAD), and International Forestry Resources and Institutions (IFRI). That database lists 40 REDD projects – 21 of which are categorised as “Ongoing” – in Indonesia.

In total, these projects issued 50 million carbon credits (including 6.9 million “buffer” credits).

UNDP cannot tell how many REDD carbon credits may have been issued during the Green Climate Fund’s results period (2014 to 2016). UNDP explains that “vintages do not allow to narrow down credits issued exactly for the GCF period for all projects”.

So, UNDP removes “vintages that clearly do not overlap with the GCF results period”. That leaves 22.8 million carbon credits, of which only 2.6 million were actually sold.

 

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