the private sector and redd+ : trends, challenges and opportunities
DESCRIPTION
Using the REDD+ supply chain as an analytical framework and drawing on information gathered through expert meetings and interviews with over 40 developing-country REDD+decision-makers and implementers, the research examined: • In the REDD+ supply chain, who are the private sector players and what are their motivations and types of interventions? • What are the current challenges for private sector engagement in REDD+? • How can private sector engagement in REDD+ be enhancedTRANSCRIPT
The Private Sector and REDD+ : Trends, Challenges and Opportunities
Florence Bernard, Programme Associate, ASB Partnership for the Tropical Forest Margins
Tony La LaViña, Facilitator, Informal Group on REDD+ of LCA
Alfred Gichu, REDD+ Readiness Coordinator, Kenya Forest Service
Armin Sanhoevel, CEO, Allianz Climate Solutions GmbH
Jonathan Shopley, Managing Director, The CarbonNeutral Company
29TH NOVEMBER 2012DOHA CLIMATE CHANGE CONFERENCE
The Private Sector and REDD+ : Trends, Challenges and Opportunities
Florence Bernard
ASB Partnership for the Tropical Forest Margins29TH NOVEMBER 2012
DOHA CLIMATE CHANGE CONFERENCE
Improving REDD+ outcomes by fostering successful private sector engagement
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Distribution and trading Consumptio
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The REDD+ Supply Chain
INVESTMENT
Who Form of Intervention
Motivation
Investment funds
Banks
Direct investment with project developers
Pre-buying carbon credits through purchase agreement
Re-sale for profit within voluntary or pre-compliance markets
Gain of experience in REDD+
Emissions-intensive industries
Pre-buying carbon credits through purchase agreement
Voluntary credit offsetting
Large multinational firms
Grant Corporate Social Responsibility (CSR)
Medium- to large-sized carbon offset private firms
Direct investment Business for profit
PROJECT DEVELOPMENT AND IMPLEMENTATION
Who Form of Intervention
Motivation
Medium to large-sized carbon offset private firms
Development and implementation of REDD+ projects
• Niche of activities • Business for profit
Large multinational firms
Co-implementation of REDD+ projects (technical expertise and technological capacity)
• Corporate Social Responsibility
• Greening their image / Branding
CARBON CREDIT TRADING AND RETAILING
Who Form of Intervention Motivation
Financial firmsTrading and retailing / Intermediary between investor and producer
Re-sale for higher prices in the future
CARBON CREDIT PURCHASING
Who Form of Intervention Motivation
Emissions-intensive industries
Large multinational firms
Purchase agreement • Voluntary carbon offsetting
• Pre-compliance• CSR • Branding
VALIDATION AND CERTIFICATION
Who Form of Intervention Motivation
Audit firms, Certification firms
Audit • Business for profit• Niche of activity
CAPACITY-BUILDING AND TECHNICAL ADVISORY
Who Form of Intervention Motivation
Consulting firms
Technical expertise regarding deforestation and degradation mapping via remote sensing analysis; capacity building; law advisory
• Business for profit • Niche of activity
Key findings
• Functions not mutually exclusive; a private sector actor can wear several “hats” simultaneously
• Private sector involvement is critical for scaling up investment in REDD+, fostering innovation in REDD+ and addressing drivers of deforestation.
• Top 3 motivations: 1. Re-sale of carbon credits,
2. Voluntary carbon offsetting or pre-compliance purposes,
3. Corporate Social Responsibility, Branding
• Emergence of a strong secondary forest carbon market
• Growing involvement of financial institutions
Challenges to Private Sector Involvement
2)Lack of a clear regulatory and policy framework•Strong policy signal and policy clarity needed: national REDD+ strategies, national emission targets, clearly defined roles
1) Uncertainty on long-term and robust demand for REDD+ credits
• Central role of UNFCCC to ensure demand for tradable REDD+ credits
Challenges to Private Sector Involvement
3) Unclear land tenure and Carbon ownership systems
• FPIC with the communities, clear Benefit Sharing Mechanisms
4) Lack of a Legal Basis for Private Investment • Due diligence in the investment process• Insurance and Risk-Sharing Mechanisms • Appropriate Dispute Settlement Arrangements
5) Appropriate Social and Environmental Safeguards
Potential strategies to stimulate private sector involvement in REDD+
• Enhancing investment though compliance carbon markets
• New and emerging compliance markets : California and South Korea’s cap-and-trade systems, Australia’s new climate legislation and Japan’s Bilateral Offset Credit Mechanism
• Crediting using a nested framework• Direct issuance of performance-based payments to the
private sector • Enables crediting of subnational projects independently
from the overall national performance• Integrated, jurisdiction-wide accounting frameworks
within a country
Potential strategies to stimulate private sector involvement in REDD+
• Engaging the Private Sector in National-Level Strategies
Potential strategies to stimulate private sector involvement in REDD+
• Involvement of sector actors as both private drivers of deforestation (e.g., timber, mining), as well as potential investors
• Shaping an overall policy framework that is win-win-win for all parties
Thank You !
The Private Sector in the REDD+ Supply Chain: Trends, challenges and opportunities
Another key determinant of REDD+ success will be ensuring effective private sector engagement. Funding is a major concern in the implementation of REDD+ activities and involving the private sector will be absolutely critical to scale up investment in REDD+. Nevertheless, little has been done to identify who the key private sector players are, the roles they play and the sector’s diversity in terms of scale, expertise, motivations and forms of involvement. The research examined:
In the REDD+ supply chain, who are the private sector players and what are their motivations and types of interventions?
What are the current challenges for private sector engagement in REDD+? How can private sector engagement in REDD+ be enhanced?
In exploring these key areas, the research aims to increase the scope and scale of effective private sector involvement in REDD+. The research concludes that while challenges exist, private sector involvement can help bridge the financing gap between public sector financing and developing country needs, as well as make vital contributions to REDD+ initiatives by providing technical expertise.
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The three-year initiative, Building REDD+ Policy Capacity for Developing Country Negotiators and Land Managers, was delivered with the generous support of the Norwegian Agency for Development Cooperation (Norad) as part of its Climate and Forest Initiative civil society support program.
http://www.asb.cgiar.org/homepage
http://www.iisd.org/climate/land_use/redd/publications.aspx