Presented by Arild Angelsen (Professor, School of Economics and Business, Norwegian University of Life Sciences (NMBU), Ås, Norway & Senior Associate, CIFOR , Bogor, Indonesia) at SBSTA 50, 25 Jun 2019, World Conference Center, Bonn, Germany.
1. Result-based
payments for
REDD+
SBSTA, 25. June 2019
1
Arild Angelsen
Professor, School of Economics and Business,
Norwegian University of Life Sciences (NMBU), Ås, Norway
& Senior Associate, CIFOR , Bogor, Indonesia
arild.angelsen@nmbu.no
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2. • 10 years of CGS-REDD+
research
• CIFOR and partners
• Almost 500 publications
2008
2009 2012 2018
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4. Results-based payment
• Many names, essentially the same idea
– Performance/Output-based Pay, PES, COD, etc.
• A key element of the REDD+ idea, and phase 3
• Limited in practice, but increasing
– Phase 1 & 2
– Not backed by sufficient funding
– Major hindrances in MRV, transparency, institutional
arrangements, etc.
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5. What is RBP?
1. Payment based on predefined results;
2. Recipient discretion to decide how to achieve results;
3. Independent verification of results (Perrin, 2013).
Do current “RBP” funding meet these criteria?
Only partially
1. Some post-hoc payment
2. Not full recipient discretion (e.g. safeguards)
3. Negotiation of results
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6. Challange 1: What to pay for?
Two dimensions:
1. Where to pay along the impact chain
inputs → activities → outputs → outcomes → impact
Strong arguments to pay for what matters (= impacts),
but measurement, risk spreading and ref.levels more tricky
2. Which outcomes: C vs. NCBs
– Climate the mandate of UNFCCC
– Carbonization of forest governance” (Gupta et al. 2012)
– How to include NCBs?
• Constraints (safeguards)
• Extra payments:
– VCS price USD 2.3 per tCO2 (2016)
– VCS + CCB: USD 3.9 (+ 70%)
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7. Ways forward
• Incentives for all REDD+ phases
–Important steps towards the ultimate goal
–Fair as countries are at different stages
• Focus on carbon, with safeguards and NCB as additional
incentives
–Carbon sufficiently important to be main focus
–Conserving standing forests largely compatible with
other objectives, particularly if use PES (Duchelle et
al. 2018)
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8. Challenge 2: Ensuring
additionality (setting FRELs)
• What would happen without REDD+?
• Has REDD+ made a difference?
• Establishing the hypothetical counterfactual is the key
problem in any impact assessment
• … and indeed in science (i.e., establishing causality)
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9. Meanings of FREL/FRL/RL
1. Business as Usual (BAU) or counterfactual
– Emission reductions = actual emissions - FREL
– Benchmark to measure performance/impact/effectiveness
– Did the project/policy work?
2. FIB: financial incentive benchmark (“emission quota”)
– How much to pay?
3. “Expected effort“
– The contribution to international mitigation through REDD+
actions under the UNFCCC (UN REDD programme, 2015)
4. “Aspirational target”
• Overloading of the concept
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13. Ways forward
• The Paris rule book needs to clarify key aspects:
–Defining D&D
–Standardizing the period for historical emissions
–Eligible “national conditions”
–Flexibility (buy-in) vs. detailed rules
–Learning, cf. CDM
• Independent, third party review needed
–Independent of UNFCCC/GCF
–Critical, stimulate debate
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14. Challenge 3: whom to pay?
• Who owns the emission reductions (ER)
• Luttrell et al. (2013), 6 potential recipients:
1. actors with legal land rights (land owners)
2. actors achieving ER (companies, communities, ..)
3. low-emitting forest stewards (e.g. indig. peoples)
4. actors incurring the costs (proponents,
governments,..)
5. effective facilitators of REDD+ implementation
(NGOs, government);
6. poorest groups in the region (achieve other
objectives and boost public acceptance).
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15. Distribution within countries
• Who is to be credited for broad national policy reforms?
• Sharing between federal level and states/provinces
–Brazil: 40-60
–Indonesia: provincial distribution of FRELs
–Nested approaches
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16. Ways forward (C3)
• Main principle: incurred costs and attribution of results
–Opportunity costs of forest conservation (forsaken
benefits of forest conversion)
–Transaction costs
–Loss of tax revenue
–But tricky: how much D&D is fair and legal?
• National REDD+ offices the key to manage fragmented
REDD+ finance
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17. Only by recognizing the
pitfalls can we avoid them
• RBP has a number of attractive feature, in theory
• Will it also deliver more – compared with other
approaches – in practice?
–The empirical evidence is weak
• The effectiveness depends on design and
implementation
–Potential for gaming and misuse
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