REDD+ Finance and Safeguards
Finance for safeguards implementation is essential to attract and sustain funding
To attract and sustain funding, REDD+ finance must operate within a governance framework capable of demonstrating compliance with social, environmental and governance safeguards. REDD+ must also be competitive in terms of risk and return, which is currently not the case. Forests are seen as a challenging environment fraught with regulatory uncertainty and perverse incentives for unsustainable practices.
- Key message: transparent national systems to implement, monitor and report on REDD+ safeguards and demonstrate that they are being addressed and respected throughout REDD+ implementation are essential to reduce risk, provide confidence to investors and ensure sustainable outcomes.
Governments have primary responsibility to build the enabling environment necessary for REDD+ implementation. Coordination among developed country donors is essential to support the development of frameworks for safeguards implementation and the establishment of effective safeguards information systems (SIS) in a participatory and inclusive way.
- Key message: improved coordination among developed country donors is needed to ensure adequate, predictable and sustainable support for early implementation of safeguards and SIS.
Until long-term finance is established and secured, REDD+ will be in a period of trial and innovation. Cooperation between the private and public sectors, working closely with indigenous peoples, local communities and civil society, will be necessary to scale up REDD+ finance and direct adequate funds towards implementing safeguards and establishing effective SIS. Such a cooperative approach will also be essential to the negotiations of a new international legal framework under the Durban Platform that includes forests in conjunction with stringent targets.
- Key message: a cooperative approach among stakeholders, engaging public and private sectors, is needed to scale up REDD+ finance and direct adequate resources towards implementing safeguards and establishing robust, cost effective SIS and MRV (measurement, reporting and verification).
REDD+ payments for broad-based performance will achieve more sustainable outcomes
There is a growing body of opinion, reflected in several submissions1 that REDD+ performance, and therefore results based payments, should be defined more broadly than carbon to include biodiversity and social benefits, and essential governance measures such as policy and institutional reform. A system of payments for broader performance that delivers a “bundle” of benefits would be more likely to lead to outcomes that are sustainable over the long-term. Basing payments solely on carbon risks the loss of biodiversity and ecosystem resilience, for example by creating perverse incentives to change the structure of existing forests to maximise carbon content. Moreover, implementing safeguards has implicit carbon benefits. For example, improvements in forest governance can reduce illegal logging, which has a carbon benefit in addition to non-carbon benefits. A carbon-only approach also sends a message that non- carbon outcomes are less important and provides fertile ground for sub-standard projects. Moreover, addressing non- carbon outcomes only through ‘premium payments’ implies that they are optional extras rather than an integral part of a package of desired outcomes, or multiple benefits.
- Key message: REDD+ performance, and results-based payments, should be defined more broadly than carbon to include biodiversity and social benefits, as well as essential governance measures.
The SIS provides a basis for cost effective REDD+ performance assessment
An effective SIS can provide an important basis for assessing non-carbon performance and indicating progress towards achieving carbon performance (e.g. through governance reforms). An integrated approach to measurement and information collection (e.g. through measuring carbon and biodiversity at the same time) with full and effective participation of communities in monitoring would help to ensure cost effectiveness and ownership. Indigenous knowledge also compliments and enriches scientific knowledge-based monitoring and reporting systems. Using local resources, and the national forest monitoring system as well as other existing relevant and reliable data sources, would keep costs down, while stakeholder review of information2 would ensure transparency, accountability and reliability of data.
- Key message: the SIS provides a basis for assessing non-carbon REDD+ performance as well as progress towards achieving carbon performance.
- Key message: Using an integrated approach with full and effective participation of communities in monitoring while strengthening and using the national forest monitoring system as well as other existing data sources is cost effective. Indigenous knowledge compliments and enriches scientific knowledge-based monitoring and reporting systems while stakeholder review of information at national level increases trust in the data.
The application of safeguards in all phases should be demonstrated to access results based finance
For full implementation of results-based REDD+ actions, systems must be in place to ensure that changes in forests are measured, reported, and verified; safeguards are addressed and respected, with relevant stakeholders participating in readiness and implementation; and benefits are equitably distributed.3 In accordance with the Cancun Decision, safeguards must be applied in all phases.4 Results-based finance should be provided only in the context of robust, participatory and transparent national systems that provide information, nationally and internationally, demonstrating that safeguards are being addressed and respected and have been applied throughout the preparation and implementation of REDD+.
The Durban LCA Decision on finance emphasises the role and importance of safeguards in several of its clauses, and provides that developing country Parties should have a SIS in place in order to access results-based finance for REDD+.5 At a minimum, before accessing this finance Parties should have demonstrated that safeguards have been applied in all phases and are being fully addressed and respected.
- Key message: before accessing results-based finance, Parties should provide as part of their National Communications and biennial update reports (or in a separate interim report) a summary of information, reviewed by stakeholders, demonstrating that safeguards have been applied throughout readiness and implementation and are fully addressed and respected.
Asia Indigenous Peoples Pact (AIPP) | Ateneo School of Government (ASoG) | Centro Mexicano de Derecho Ambiental (CEMDA) | Center for International Environmental Law (CIEL) Civic Response | Climate Justice Programme (CJP) | ClientEarth | Federation of Community Forest Users, Nepal (FECOFUN) | Global Witness | Greenpeace HuMa (Association for Community and Ecology-Based Law Reform) | Institute for Law and Environmental Governance (ILEG) | Indigenous Livelihoods Enhancement Partners (ILEPA) Rainforest Foundation Norway (RFN) | Tebtebba (Indigenous Peoples' International Centre for Policy Research and Education)
1 Bolivia, Phillipines-Switzerland, COMIFAC, Japan (submissions on modalities and procedures for financing results-based actions and considering activities related to Decision 1/CP.16, paragraphs 68–70 and 72).
2 Noting that stakeholder review is recommended for assessing implementation of the REDD+ Social and Environmental Standards.
3 As per Decision 1/CP.16 para 70 and para 2 of appendix I.
4 Decision 1/CP.16, paras 69, 70, 71(d), 72 and 73, when read together, support this.
5 Decision 2/CP.17, para 64.