REDD And Indigenous Peoples

Why Is It Important For Indigenous Peoples To Know About REDD?

REDD is being implemented in developing countries in the tropics and sub-tropics. These forests have been inhabited by indigenous peoples since hundreds if not thousands of years. They have used, managed and shaped these forests in different ways. Rather than destroying these forests, traditional land use and management practices have lead to a more diverse landscape, and thus to an increase in biodiversity. REDD aims at supporting forest conservation, and enormous amounts of money will be made available for that in industrialized countries. Even though we may agree that forest conservation is in the interest of everybody, and certainly in the interest of indigenous communities who depend on forests for their livelihood, we can expect, as we will see below, that these programs can also have a severe negative impact on indigenous peoples.

Indigenous peoples all over the world have become increasingly concerned about REDD since their experiences in the past have shown that governments and the private companies often refuse to recognize their rights and interests in forest policies and programs. But there may also be new opportunities that may benefit indigenous communities. The positions on of indigenous organizations on REDD differ. Some groups vehemently oppose the idea of treating forests mainly as a carbon storage, and they reject any form of forest carbon trading. Others accept that there could be benefits, and demand that indigenous peoples' positions are included in international and national processes. In any case, for indigenous communities at the local level it is important to know what REDD is all about, what the possible advantages and what the expected negative impacts are, so that they are prepared and can negotiate and defend their rights in case REDD programs are targeting their land and territories.

What Is The Expected Impact Of REDD On Indigenous Peoples?

General Problams With REDD

It has already become clear that REDD is it has so far been designed has several weaknesses, even dangers. Some problem are more technical, most however are ethical.

The Problem of Leakage: Protecting Here and Cutting There!

Leakage happens when a container has a hole. In the context of REDD it is referred to the problem of making sure that the REDD programs or projects do not have any holes, i.e. that when deforestation is prevented in one area it is not displaced to another area. For example, if a forest has been targeted to be converted into an oil palm plantation, but is protected under a REDD program which pays compensation to those who have the right to but agree not to cut the tree and plant oil palm: how can we be sure that these people (or the government in charge) does not simply establish an oil palm plantation in another area, which hasn't been targeted for plantations?

The Problem with Additionality and Perverse Incentive: Paying the wrong people and encouraging deforestation!

In order to be considered under a REDD program the respective forest owner a government, company or community has to prove that the carbon gains, this means the carbon prevented from being emitted into the atmosphere (and kept stored in trees), would not have happened without the compensation payment offered. They have to show that additional carbon is saved, to show that there is additionality. This means that if people protect a forest anyhow, for other reasons than for keeping the carbon locked in trees, they would not be entitled to compensation and thus not be included in a REDD program. Or to put it more simply: only forests that are immediately threatened to be destroyed or degraded are considered under REDD. This also means that the people who may in the end benefit from REDD are the forest destroyers like cattle ranchers or oil palm companies, and not those who have protected forests like indigenous communities. And most worrying is that REDD may actually encourage such people or companies to start destroying forests just in order to be included in a REDD program and get access to compensation money.

Since such encouragement or incentive is totally in contradiction to the declared intention of REDD it is called a perverse incentive. So there is a serious risk of increased deforestation during the present negotiation phase on REDD. For example, the government of Guyana is threatening that it could increase the rate of deforestation unless it is compensated for not doing so through REDD. Another problem is that the definition of forest used in the United Nations makes no difference between natural forests and plantations. This means that a company could replace a forest with a tree plantations, and still qualify for support under a REDD program. Once REDD programs are established, there will be a flow of enormous amounts of money from the industrialized countries to developing countries. There is a serious risk of large amounts of money being lost to corruption as money will be poured into some of the most corrupt governments of the world.

Measuring and monitoring and forgetting the people and the root causes of deforestation!

REDD schemes as they are planned now put a lot of emphasis on complex carbon measurement (how much carbon is stored in a forest?), accounting and monitoring systems (how much carbon could be saved through the REDD initiative, in comparison to what would have happened without the REDD initiative?), making new forest inventories, and on methods that help prove that emission reductions have happened. Very little attention has so far been paid to legal reforms that provide communities with titles to their land and forests and thus empower them for forest protection. And very few programs include monitoring of the impacts of REDD programs on forest communities, or monitoring of whether and how well those in charge of the program (government and donor agencies) are doing their job. In all that international agencies are focused on actions in developing countries, and they are not addressing the main drivers of forest destruction: international trade and global consumption of agricultural commodities, timber and pulp products. In the long run, forest protection will only work if there are serious actions taken to address inequalities in land tenure, discrimination against indigenous peoples, corruption, over-consumption and uncontrolled industrialization.

Trading in forest carbon: Helping polluters and not the climate!

Trading carbon stored in forests would allow heavy polluters in industrialized countries to continue with greenhouse gas emissions to continue. It is very likely that if trading in forest carbon is allowed it would lead to a massive increase in carbon credits available on the carbon market and therefore to a crash in the price of carbon. Therefore, trading forest carbon would not help in addressing climate change we need to find ways to stop burning fossil fuels, not create massive new loopholes to allow the pollution to continue.

Direct Negative Impacts On Indigenous Communities

Ignoring indigenous peoples' rights: Relocation and land grabbing!

Many fear that with REDD all the gains that have been made over the past years in getting recognition of and support for community-based conservation and collaborative management of forest (when communities, NGOs, governments and companies are jointly managing and protecting a forest) will be lost when REDD does not take the concerns and rights of indigenous and other forest communities into account. It is feared that governments could again favor a “fences and fines” approach, which does not only mean that strict rules on forest conservation are imposed on local people, but that it may also mean the eviction of indigenous and other poor communities from such carbon protected areas. Experiences in the past have shown that such an approach has failed to prevent the destruction of forests or the loss of biodiversity. The non-recognition of the rights of indigenous and other forest communities prevents their empowerment for conservation and encourages encroachment by others. Instead, it is expected that under REDD there will be an increase of zoning of forests by governments, companies and conservation NGOs, that there will be an increase of demarcation of protected areas, forest reserves or sustainable forest management zones (for certified logging) in order to receive REDD payments. The majority of already existing forest zoning and land classification programs throughout the world ignore the customary rights of indigenous peoples to their land and territories. As the value of forests increases under REDD it cannot be expected that governments will be interested in addressing the long-standing demands of indigenous communities for the recognition of their rights to their land and territories. The compensation payments for forest conservation may also lead to increased land speculation in forest areas, and unless REDD schemes take measures to secure and recognise customary collective lands for communities, there is a serious risk that more forests are being taken over by migrant settlers and private companies.

Competing over benefits: The danger of increased inequality and social conflict!

It is not just the expected increase of encroachment of outsiders on indigenous peoples' forests which may lead to more conflicts. The increased value of forests and the anticipated benefits from REDD schemes will undoubtedly generate more conflicts over boundaries between communities or among local landholders and forest owners. Once compensation payments under REDD begin to flow, there is also the risk that without careful measures to make sure that the different communities in the respective areas and the households within these communities equally benefit from these payments, there will be more and new conflicts between and within communities.

Targeting indigenous peoples land use practices: Banning a way of life!

Fire has been an important tool in land use and forest management of many indigenous people, not just those living in the forests of the tropics and sub-tropics. In the savannas of Africa, for example, pastoralists and hunters-gatherers have used fire to maintain the productivity of the ecosystem for livestock and game since thousands of years. In North America as well, before the arrival of the white colonists, indigenous peoples used to burn parts of the ecosystems in which they lived to promote a diversity of habitats which gave them greater security and stability. Their use of fire differed greatly from European settlers who burnt to create greater uniformity in ecosystems. The Gagadju in Australia's Northwestern Territory, like other Aborigines, have developed and even today pass on to younger generations a detailed knowledge on the use of fire as a tool to manage diverse ecosystems.

Fire is also the key technology in agricultural systems commonly called shifting or swidden cultivation, a farming method practiced by an estimated 300 to 500 million people worldwide, many of them indigenous peoples. Indigenous peoples' use of fire, just like many other aspects of their resource management systems have however often not been properly understood by outsiders, above all not by foresters, park rangers and other state agents in charge of the management and conservation of biodiversity and natural resources. As a result, such practices have been discouraged, or, in most cases, declared illegal. In the age of global climate change resource use and management practices that rely on the use of fire are coming under increased pressure. This is particularly the case with shifting cultivation. In the name of forest conservation governments all over the world and particularly in Asia have since long sought to eradicate this form of land use. The climate change discourse provides additional arguments in support of such drastic policies.

The UK based Forest Peoples Programme (FPP) and FERN have studied nine concepts for government programs on Reducing Emissions from Deforestation and Forest Degradation (REDD). Eight of these identify traditional agriculture or shifting cultivation as a major cause of forest loss (Griffiths 2008 20). Over the past few decades tropical and subtropical forests have been destroyed on a massive scale. Even though it is now generally recognized that the main causes of forest destruction and degradation are unsustainable logging, the conversion of forests to large plantations, small farms by migrant settlers, or cattle ranches, it is often shifting cultivators and thus indigenous peoples who are blamed to destroy forests Not only shifting cultivation, but also other forms of land use practiced by indigenous peoples controlled burning of forests to improve habitat diversity for game or pastures for livestock, the collection of fuel wood, cutting trees for house construction and other purposes, even the gathering of non-timber forest products are now considered a form of forest degradation under REDD programs. And since REDD aims at reducing deforestation and forest degradation, indigenous communities are and will increasingly be targeted in such programs. This will have a severe impact on the way of life and the livelihood security of the affected communities.


REDD Readiness Action Plan

Cooperation between FCPF and UN REDD Programme on REDD Readiness

Jointly prepared by the

FCPF Facility Management Team and UN REDD Programme

October 9, 2008

1. Introduction

This note deals with the proposed cooperation between the Facility Management Team (FMT) of the Forest Carbon Partnership Facility (FCPF) and the UN REDD Collaborative Programme of the Food and Agriculture Organization (FAO), the United Nations Development Programme (UNDP) and United Nations Environment Programme (UNEP) on REDD (UN REDD Programme).

This notes builds on the UN REDD Programme papers titled “Coordination Paper – Annotated Outline” and “Options for FCPF Coordination with UN REDD” of July 8, 2008, and on the FCPF FMT’s response of September 5, 2008 titled “Coordination between FCPF and UN REDD on REDD Readiness”. Staff of the FCPF FMT and UN REDD Programme met on September 18, 2008 in Washington to discuss cooperation and agreed to produce this joint note.

This note is being submitted to the FCPF Participants Committee in advance of its meeting of October 21 22, 2008 in Washington, DC. The FCPF Participants Committee will be requested to provide feedback on the proposals contained in the note during the session on the status of UN REDD and UNFCCC Secretariat (on October 22 at 14:45). It will also be considered by the soon to be established Policy Board of the UN REDD Programme.

2. Rationale for Cooperation

It is in the interest of developing countries embarking on programs designed to build their readiness for reducing emissions from deforestation and degradation (REDD) that international initiatives designed to support such programs, e.g., the FCPF and UN REDD Programme, adopt similar approaches to problem solving, articulate their financial support so as to cover all the needs but avoid duplication, and organize themselves in a way that maximizes country engagement and minimizes transaction costs.

Specifically, cooperation between the UN REDD Programme and FCPF makes sense if it results in REDD readiness programs that: (i) achieve a larger scale; (ii) are executed more quickly, (iii) are of a better quality than uncoordinated initiatives; (iv) follow consistent approaches; and/or (v) are driven by REDD country needs. Scale would be achieved by the fact of there being more money available for common needs. Speed would be possible as the two initiatives may be able to engage countries with different lead up times. Likewise, quality would rise as a result of countries being able to access the best readiness support structures and benefit from the combined support of the FCPF and UN REDD Programmes. Consistent approaches will provide assurance for subsequent transactions, such as through the FCPF Carbon Fund Participants Committee. Both the Bank and the UN Agencies endorse the principles of country ownership set out in the Accra Agenda for Action, agreed at the 3rd High Level Forum on Aid Effectiveness held in Ghana, 2 4 September 2008. Closer cooperation on REDD readiness support is very much in line with the Accra Agenda for Action.

The cooperation between the FCPF and the UN REDD Programme must be responsive to the needs of REDD countries as reflected through transparent and vetted governance structures such as the Participants Committee. The cooperation must also remain flexible enough to be adaptable to any post 2012 climate regime. Respect for the UNFCCC negotiation process is therefore paramount and no action should prejudice the negotiation outcomes.

A cooperative agreement between the UN REDD Programme and the FCPF should be based on the comparative advantages of each initiative. It is important, therefore, firstly to analyze the needs and various fields of readiness activities for the foreseeable future, secondly to determine which agency(ies) might be best positioned to contribute to them, and thirdly to envisage how the cooperation between the UN REDD Programme and the FCPF should be structured.

3. Areas of Cooperation at the Global Level

Table 1 suggests a way for the FCPF and the UN REDD Programme to work together on global REDD readiness issues that is based on comparative advantages in five main areas. A number of responsibilities would be exercised jointly. Even when one initiative takes the lead, it would strive to plan the activity with the other initiative. Moreover, it goes without saying that many other actors are and will be involved in funding and delivering REDD readiness services and may be in a better position than either the FCPF or the UN REDD Programme to address certain issues. A high degree of coordination between the FCPF, the UN REDD Programme and other initiatives is assumed and welcomed.

The far right column in Table 1 is meant to reflect the involvement of these other initiatives. However, Table 1 is not designed to capture all the activities undertaken by other partners and focuses instead on the comparative advantages between the FCPF and the UN REDD Programme, so that column is left empty at this stage.

Table 1 does not attempt to represent how REDD readiness needs might be met in any given country in particular. A particular country may well organize its readiness activities in a different way than suggested in Table 1, which only depicts how the FCPF and the UN REDD Programme may be able to cooperate at the global level. Principles for such national engagement are set out in Section 4 below.

More explanations on the contents of Table 1 are given after the table.

Table 1: Lead Responsibilities in REDD Readiness at the Global Level *

For each item, the two initiatives would strive to execute the planning phase together

i. Methods and Approaches

Monitoring/Assessment/Reporting/Verification (MARV): An agreement on the minimum standards for monitoring, assessment, reporting and verification protocols is a key tenet of a future agreement on the treatment of REDD under the UNFCCC. Without agreement, standards and methods will proliferate, with ensuing loss of efficiency and loss of value for REDD countries. The UN REDD Programme has already started exercising the lead responsibility with the organization of an international workshop on the topic on September 16 17, 2008 in Washington, DC. The scope of this component would cover the following areas: forest inventories, biomass and carbon accounting, and remote sensing, for which there is already considerable experience, even though using different standards, approaches and tools. In addition, an MARV system would require that countries put in place national registries for REDD, which involve the capacity to track and report on emission reductions starting from where they are generated and following them up to the point they are acquired by an external party.

ii. Capacity Building

MARV: A series of capacity building events on MARV but also other thematic areas critical to REDD and targeted at country specialists, Indigenous Peoples and the private sector, will be needed to create the social capital prior and in parallel to the country driven Readiness activities. South South technology and knowledge transfer will be supported where possible.

General readiness: Beyond the rather technical aspects of MARV, significant capacity needs to be built in such areas of governance, payment structures, co benefits, and participatory engagement, given the importance of these topics for REDD (REDD cannot succeed if it ignores the fundamental issues affecting the forest sector).

National negotiators: The joint UNEP UNDP program on training for UNFCCC negotiators would be enhanced to cover REDD.

Forest dependent peoples: Forest dependent peoples are among the main stakeholders who will need special attention throughout the REDD readiness process. The FCPF FMT proposes to continue the special relationship with the UNPFII and to continue giving support to regional workshops and capacity building seminars. The UN REDD Programme will also provide capacity building support for indigenous peoples.

iii. Knowledge Management

Lessons from past experience in the sustainable management of forests: At least two decades of attempts at sustainable forest management should be reviewed and analyzed. In particular knowledge about what has worked and not worked in developing countries should be synthesized in order to inform the current debates on REDD. It may be possible to build performance based payments on the successful experiences of the past.

Lessons from REDD readiness program implementation: The creation of a common knowledge sharing platform can become one of the most valuable tools for REDD countries when approaching the readiness stage as it will multiply the impact of the individual initiatives going forward. The UNFCCC REDD platform and the UN REDD Programme’s and the FCPF websites would be linked so as to develop and make accessible such knowledge as it becomes available.

iv. Analytical Work

More prior knowledge is needed in a range of fields, which would facilitate the operationalization of REDD readiness programs. The FCPF and UN REDD Programme will cooperate with other initiatives to break new ground on the topics below. Research papers could be commissioned and technical workshops could be conducted for the different issues that have not been settled yet, and are not being handled adequately by others. Results from analytical work should be evaluated jointly by relying on each institution’s analytical capacity, but also by involving ad hoc Technical Advisory Panels under the FCPF, similar bodies under the UN REDD Programme, governments and other stakeholders. Every issue needs special treatment and should have its own schedule, clear responsibilities and budget.

Forest degradation: How to measure and monitor changes in carbon stocks due to forest degradation is still the subject of considerable debate. Before capacity can be built in this area, more analytical work is probably necessary.

Reference case setting: Whether the reference scenario for emission from deforestation and forest degradation should be based on past data exclusively or also take into account the future is controversial. Analysis on the implications of the two approaches and how they may be implemented in specific situations would be very helpful to inform the deliberations of the UNFCCC.

Economic analysis for REDD strategy: Countries should know how much it may cost them to implement REDD programs. Poor data are available on the opportunity, implementation and transaction costs of REDD. Further work is needed on efficient methods to estimate these costs.

National legal and institutional frameworks for REDD: Multi country studies could be undertaken to shed light on the legal and institutional choices that countries may have to make to implement REDD, focusing on fundamental questions such as the rights related to participation in REDD transactions, the use of REDD revenues, and the delivery mechanisms for REDD (e.g., the aggregation and transfer of emission reductions, and the receipt and channeling of payments for emission reductions.).

Regional approach: The potential of developing regional approaches to REDD readiness in the Congo Basin, Mekong Basin and Meso American corridor, for example, should be explored. These regions may have enough commonality to treat elements of reference case setting, REDD strategies and MRV on a regional basis to complement national approaches. Regional approaches will need further preparation and may require specific financial resources.

Financial structures for REDD: How REDD should be financed is an important question. Should REDD countries count on traditional investment finance and, if so, from which sources? Are there other financing sources that are needed to cover upfront costs? How would these sources co mingle with carbon finance? What are the roles of the public and private sectors? How do we ensure equitable sharing of the revenues and benefits?

Biodiversity and livelihood benefits: REDD is central to the climate change discussions and provide a tool to mitigate climate change. However, ensuring that REDD also creates additional benefits for biodiversity and society is likely to make REDD more sustainable. Additional work should be carried out on the potential synergies and trade offs between REDD and biodiversity and livelihood benefits, based on real country situations. The cost implications of providing ‘REDD++’ should also be examined.

v. Readiness Needs Assessment

Template preparation (Readiness Plan Idea Note and Readiness Plan): The FCPF FMT created a Readiness Plan Idea Note (R PIN) template that has enabled initial country submissions, which diagnose problems and propose solutions to REDD. Additional work is being jointly carried out by the FCPF FMT and UN REDD Programme to produce a standard Readiness Plan (R Plan) template, through which countries will explain how they intend to build their readiness for REDD, while putting timelines and budget numbers on the process. The R Plan template will likely undergo improvements after it is tested and used by the first few REDD countries. It is envisaged that the R Plan template will be the subject of discussion and training sessions with REDD countries. This will be an opportunity for engagement with the UN REDD Programme with the aim of agreeing a standardized R Plan approach. Resources will also be needed to translate the template from English into French and Spanish.

National REDD Strategy preparation (templates, processes)

National UN REDD Joint Programme preparation (templates, processes)

4. Principles of Cooperation at the National Level

At the level of a specific country, the UN REDD Programme and the FCPF will organize themselves in the most sensible way possible under the leadership of the national authorities and develop a program that is tailor made to each country’s needs and specifies the roles, responsibilities and financial contributions of each. The division of activities at the global level above provides an indication of the respective areas in which UN REDD and FCPF will intervene at the national level, but the role of the two may vary in accordance with the needs of each country and comparative advantages specific to each country. In countries where both the UN Programme and the FCPF operate, the principles or modalities for collaboration would include:

•                    One national REDD programme: Both the FCPF and the UN REDD Programme contribute to the development of one national REDD programme, along with other donors and stakeholders. At the country level this means promoting the development of one reference scenario, one REDD strategy. and one monitoring system. Support will be provided by the FCPF or UN REDD Programme or both for this to take place if needed.

•                    Joint missions: The UN REDD Programme and FCPF will undertake joint missions in the countries where both are active. These joint missions will ensure coordination from the outset and the development of a cohesive national REDD programme to which both can contribute.

•                    National coordination mechanism: There will be an agreed national counterpart in each country which will act as the primary counterpart for all initiatives, including the UN REDD Programme and FCPF. The UN REDD Programme and the FCPF will coordinate through existing national coordination mechanisms where they exist. The REDD programme will build on existing donor coordination processes where these include both the UN and the World Bank.

•                    Shared REDD readiness process: The UN REDD Programme and the FCPF will work together to develop templates for national REDD plans, programs and policies. This would ensure countries follow similar processes regardless of the involvement of FCPF or UN REDD. UN REDD will help with the review of R PINs and R Plans in shared countries and the FCPF will be invited to review the plans for other countries which will be based on the R Plan format unless the country has an alternative template it wishes to follow.

•                    Joint planning workshops: UN REDD and FCPF will strive to hold joint planning workshops in all the countries where both will be engaged. The aim of the first of these workshops would be to help countries with the development of their respective national REDD strategies, including the roles for FCPF and UN REDD if any.

5. Practical Arrangements

After considerable discussion, the FCPF FMT and UN REDD Programme make the following proposal for consideration by the FCPF Participants Committee to put into practice the cooperation at the global level, as outlined in Section 3 above, and initiate country level cooperation as outlined in Section 4 above:

5.1 The World Bank and the UN REDD Programme would sign an administrative agreement, such as a Memorandum of Understanding, on cooperation on REDD readiness. The two initiatives believe that an administrative agreement of this sort is sufficient to ensure meaningful cooperation. This agreement would spell out the specific arrangements to be put in place to conduct cooperation between the FCPF and the UN REDD Programme.

5.2 The UN REDD Programme and the FCPF will strive to hold one week of coordinated/joint meetings from February 2009 onwards (tentatively twice a year). Invitations to the FCPF Participants Committee meeting and the UN Policy Board would be sent out jointly or in a coordinated manner and costs will be shared as appropriate. The week of meetings could, for example, include the FCPF PC meeting on days 1 2, a joint session on day 3 to consider the global issues set out in Table 1 above, as well as address issues related to common REDD countries, and the UN REDD Policy Board meeting on days 4 5.

5.3 The UN REDD Programme would acquire observer status, as per an amendment to Section

11.7 of the FCPF Charter, which would confer the right to the UN REDD Programme to participate in the meetings of the FCPF Participants Assembly and Participants Committee and have full access to the information generated in this context.

5.4 The FCPF would have reciprocal status on the UN REDD Programme Policy Board and take a place as an observer on the Board.

The World Bank And REDD

The World Bank wants to play a leading role in promoting and shaping REDD. It has already set up several very large Climate Investment Funds (CIF), which are supposed to support the development of clean technologies and other initiatives addressing climate change. Its main mechanism for promoting REDD is a scheme called the Forest Carbon Partnership Facility (FCPF). The FCPF intends to assist developing countries in their efforts to reduce emissions from deforestation and forest degradation. This is supposed to be done in two ways:

1. The Readiness Mechanism is aimed at building capacity for REDD. It assists 37 countries developing tropical and sub-tropical countries in preparing themselves to participate in a future, large-scale, system of positive incentives for REDD. What the program concretely does is

a) To support countries in making an estimate of their national forest carbon stocks and the sources of carbon emissions from forest.

b) To assist the countries in defining what is called a reference scenario. This means that in order to be able to estimate how much carbon emission was reduced in a particular year or how much can be reduced in the future, we need to know how much the emission actually is before the REDD projects starts. The Readiness Mechanism offers these countries technical assistance in calculating and comparing the costs of different possible REDD initiatives, and based on that to design their own REDD strategy that takes into account the countries priorities and constraints.

2. The Carbon Finance Mechanism. A few countries that will have successfully participated in the Readiness Mechanism will be invited to be part of pilot programs which are testing a system of positive incentives for reducing emissions from deforestation and forest degradation. In other words, the system will offer rewards for reducing deforestation and forest degradation, with the hope that the respective governments will respond positively and take concrete measures to reduce deforestation and forest degradation. If they are able to reduce the emissions below the level of the reference scenario they will receive compensation payments.

These two mechanisms are supposed to lead to the establishment of a much larger system of positive incentives and financing of for REDD in the future. The World Bank itself writes on its web-site that they hope to develop a realistic and cost-effective large new instrument for tackling deforestation, to help safeguard the Earth's climate, reduce poverty, manage freshwater resources, and protect biodiversity. The World Banks Forest Carbon Partnership Facility (FCPF) has however been heavily criticized for failing to consult properly with forest peoples, thereby ignoring its own internal safeguard policies according to which the need for effective participation of forest dependent indigenous peoples and forest dwellers should be taken into account in decisions that may affect them, their rights under national law and applicable international obligations should be respected. At present, the World Bank is I the process of designing the Forest Investment Programme (FIP). The FIP hopes to receive between US$1 billion and US$2 billion of funding for a activities promoting and supporting sustainable forest management and afforestation activities, including REDD. Many environmental and human rights groups however fear that unless the World Bank commits to a rights-based and people-centered approach to forest conservation there are real dangers that FIP funds will end up being used for supporting conventional large scale plantation and logging operations. As with the FCPF before, these groups have also raised concerns regarding the need for timely consultation with forest peoples and civil society about the design, governance and operation of the FIP. Indigenous peoples have pressed the Bank for effective participation in the design of the mechanism The World Bank has publicly announced that it will establish a permanent consultation mechanism for forest peoples under the FIP. It is however unclear whether any consultation will actually have an influence on the basic design, since there is so little time left until this huge forest fund is supposed to start operating.


The UN REDD Programme

The UN REDD Programme was set up in September 2008and is run jointly by three of the United Nations largest organisations: the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP) and the Food and Agriculture Organisation (FAO). UN REDD's aim is to assist developing countries and the international community to gain experience with various ways of paying for REDD and on how to deal with the risks involved. UN-REDD is explicitly promoting market-based REDD and payments for ecosystem services. UN-REDD is currently supporting pilot projects in ten countries: Bolivia, Democratic Republic of Congo, Indonesia, Panama, Papua New Guinea, Paraguay, Tanzania, Viet Nam, and Zambia. Like the World Bank's FCPF. These pilot projects have two purposes:

1. They are supposed to help the countries prepare for future national REDD schemes (called readiness activities since they are supposed to create the capacities of government to become ready for REDD).

2. They will test the REDD payment systems developed.

This means that with the help of these pilot projects the UN-REDD programme want to assess whether the capacity support given and payment system devised can create the incentives to ensure clear, measurable emission reductions that last, while at the same time maintaining and improving the other ecosystem services that forests provide. The government of Norway has provided the initial funding for UN-REDD. The UN REDD Programme declared that it will apply a rights-based approach which means that the programme will in all activities respect and promote the rights of people involved in and affected. UN-REDD also stated that it will adhere to the United Nations Development Group Guidelines on Indigenous Peoples. In February 2008 these guidelines were upgraded to make them consistent with the United Nations Declaration on the Rights of Indigenous Peoples.

The guidelines among others recommend that UN operations should respect the right to free, prior and informed consent, and recognise indigenous peoples collective land and territorial rights. The UN-REDD programme has monitoring plans which, for example, foresees to provide training for governments on the UN Declaration on the Rights of Indigenous Peoples, to raise awareness on traditional knowledge and to develop tools for assessing co-benefits (which means other benefits than just reduction of carbon emission). But the monitoring plan so far lack what is most crucial: criteria, indicators and tools to monitor and independently verify human rights impacts as well as the governance performance in REDD programmes. It therefore remains unclear how the UN will ensure that its commitment to a rights-based approach will be applied in practice or how it will respond to indigenous peoples demands developing monitoring mechanism which ensure that its activities comply with the Guidelines on Indigenous Peoples and accountability mechanisms.


Reduce Emissions From Deforestation And Degradation


Because forest destruction and degradation are major causes of global warming, and because forests can help lessen the impact of climate change, it has become clear that we need to slow deforestation and forest degradation and maintain healthy old growth forest systems. This has led to the idea of 'reducing emissions from deforestation and forest degradation', a idea which involves simply trying to stop forests being cut down or degraded and thereby reducing the amount of CO2 that is released into the air. At its simplest, this is all that 'redd' is. However this idea has been adopted by governments and inter-governmental bodies and agencies and has been developed into a more specific idea, which involves developed countries paying developing countries large amounts of money in order to stop forest destruction and degradation in developing countries. This set of policy ideas we refer to as Reducing Emissions from Deforestation and Forest Degradation in developing countries – REDD (in capital letters).

REDD is a very new idea, which is promoted by several Northern and Southern governments and large conservation NGOs. There are several different proposals for REDD mechanisms which differ mainly in how the finances for paying for REDD would be organized. All these proposals are based on the idea that developed countries would pay developing countries to reduce rates of deforestation or degradation by implementing various policies and projects. REDD is not yet part of the global agreement on Climate Change (Kyoto Protocol), but it is proposed to be included in the new agreement which will be discussed at the Conference of Parties in Copenhagen in December 2009. In the meantime, pilot schemes on REDD are being undertaken and funding mechanisms are being set up by UN agencies like UNDP, UNEP, FAO or international financial institutions like the World Bank, and also by private companies, governments and conservation groups. They all expect that REDD will be included in the new Climate Change agreement to be negotiated in Copenhagen.


The Basic Principle

The basic principle underlying all proposed REDD mechanisms is: Funds are provided to developing countries for reducing emissions from deforestation or forest degradation. The respective countries have to implement policies and programs which reduce deforestation and forest degradation. Any approach that reduces deforestation and degradation could in theory be applied. Some possible examples for such measures are: governments strengthen law enforcements, have better fire management and practice sustainable forest management or change laws to stop large-scale logging or forest conversion activities like plantations. What this means is that under REDD schemes new kinds of "carbon protected areas" would be created over large areas of forests, with the main objective to cut CO2 emissions by avoiding deforestation and degradation of these forests.

Different ways to finance REDD

The question is: how will REDD be financed? This is at present being hotly debated. Basically, there are two positions in this debate, supporting two different proposals on how the money to pay for forest protection under REDD is supposed to be generated: through the establishment of funds and through market mechanisms.

1. Financing through market mechanisms

The carbon market is the key mechanism by which the countries who signed the Kyoto Protocol seek to lower the impact of climate change. It works like this: each country is allowed to emit a certain amount of carbon each year. If they emit less, they have “extra carbon credit” which they can sell to other countries; if they emit more they have to buy credit from other countries. One carbon credit is equal to one ton of carbon. So carbon credits are traded between “buyer” countries, or companies, and “seller countries”, or companies, just like any other goods. Market mechanisms could be regulated under the UN system or via voluntary carbon markets using their own informal standards and verification procedures.

There are new companies that have been created just to trade with carbon credits. If a country or company engages in an activity that is sequestering (absorbing carbon from the atmosphere) instead of emitting carbon, like through planting trees, they create carbon credits. And if they prevent the emission of carbon, like when protecting a forest from being logged or turned into a plantation, they also create carbon credit. So the idea is to finance REDD project by selling carbon credits that are created when protecting forests. A large percentage, some 36%, of the carbon credit traded on the voluntary market comes from projects in reforestation and afforestation projects. But credits traded from avoided deforestation are so far only few, about 3% of the voluntary market. The carbon credit market system has been criticized because it allows industrialized countries to buy carbon credits in other countries, especially the developed countries, which may be cheaper than reducing their own carbon emission. It would therefore allow these countries to continue polluting the atmosphere at the same level as long as they can buy carbon credits to compensate their carbon emission. It is buying the right to keep polluting.

2. Financing through funds

A fund is a mechanism by which different people, companies or governments pool money in order to jointly finance a program, project, a business or an institution (like a school, an orphanage etc.). The money of a fund is kept in a bank account, and there are people who are in charge of managing the fund, i.e. to see to that the money is used for the purpose the fund was created for. Funds for REDD could be created at the global or regional level (like for Asia, for Africa etc.). For example, the government of Tuvalu, as small island state in the Pacific Ocean, proposed the foundation of an International Forest Retention Fund. Governments would pay money from taxes on activities that are harmful for the climate (like for air traffic, for fuel that powers the engine of a ship or aircraft etc.) to this fund. This money would then be used to pay for forest conservation. This proposal includes compensation to communities for protecting and sustainably using forests. Governments would report every year to the UNFCCC COP on the progress of their forest conservation work supported by the fund. Important to note is that under this system it is not possible for any government, in particular the industrialized countries, to “offset” emissions which they are causing themselves, like under the carbon credit market system.

Some industrialized countries have already set up their own funds or programs, through which they among others intend to support REDD. They provide this funding either directly to a country, or through agencies or programs of the United Nations, like the World Bank, or the UN REDD. Norway has launched its Climate Change Forest Initiative and will provide $600M annually for the next 6 years to support the United Nations UN-REDD programme and other projects. Norway believes both market and fund-based approach to a REDD regime are needed. Australia has pledged to provide US$185M funding for the next 5 years mainly for Indonesia, Papua New Guinea and the FCPF of the World Bank. Aside from the multilateral and bilateral funds and programs, there is an steadily increasing number of projects by the private sector, which means: by conservation agencies, private foundations and companies. Examples are the Nature Conservancy, Conservation International, WWF US, Environmental Defense Fund, Woods Hole Research Center, CIFOR, Winrock International, Wildlife Conservation Society. Examples for private foundations supporting activities related to REDD are the Rainforest Project, launched by Prince Charles, which is funded by 12 big companies such as the mining company Rio Tinto, or banks like Morgan Stanley, Goldman Sachs, Deutsche Bank. Another example for a large joint initiative is the Noel Kempff Climate Action Project in Bolivia by TNC, Fundaci?n Amigos de la Naturaleza (FAN), the Bolivian government, and three energy companies (American Electric Power, PacifiCorp, and BP Amoco).

The US Bank Merrill Lynch is funding the Ulu Masen project in Sumatra, and Marriot Hotels is involved in the Juma Sustainable Development Reserve in Brazil. Several foundations have programs on deforestation and are now supporting activities related to REDD. Among these foundations are the Gordon and Betty Moore Foundation in the Amazon and the David and Lucile Packard Foundation in Brazil; or the Rockefeller Foundation which is supporting the Clinton Climate Initiative to develop forests projects in tropical countries.

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