Equity risks in a REDD+ results-based framework

COP 22 Marrakech, 9 Nov 2016

Grace Wong, Maria Brockhaus, Amy Duchelle, Lasse Loft, Cecilia Luttrell, Pham Thu Thuy, Le Ngoc Dung

Renewed focus on REDD+ post-Paris

Paris Agreement reaffirms REDD+ as a results-based payment approach – and commits to finance

Forests and REDD+ included in at least 38 (I)NDCs Measuring “results” or policy performance – different

challenges for the different phases of REDD+ Non-carbon benefits - importance can be integrated within

REDD+ financing, but not as a requirement of conditionality Non-market approaches - joint mitigation and adaptation

recognized as an alternative to results-based payments, subject to REDD+ safeguards

Safeguards - “in accordance with national circumstances”, requirement for results-based payment (COP 19 Warsaw)

Equity matters

Highly debated and difficult to assess as equity perceptions are not universal, but relational depending on contexts

Equity can have significant positive feedback on policy/ program outcomes and legitimacy

Potential trade-offs with effectiveness and efficiency

Not only an issue for safeguards

Article 5 and results-based payments for REDD+

Recognizes the importance of adequate and predictable financial resources, including for results-based payments, as appropriate, for the implementation of policy approaches and positive incentives for reducing emissions from deforestation and forest degradation, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks; as well as alternative policy approaches, such as joint mitigation and adaptation approaches for the integral and sustainable management of forests; while reaffirming the importance of non-carbon benefits associated with such approaches; encouraging the coordination of support from, inter alia, public and private, bilateral and multilateral sources, such as the Green Climate Fund, and alternative sources in accordance with relevant decisions by the Conference of the Parties.

Article 5 and three key questions related to REDD+ performance

1. What is adequate and predictable finance, and how can it be structured to effectively incentivize REDD+ results? In essence, what is the ‘right’ payment size for REDD+? Whose and which costs are considered when determining payment size? What is the appropriate timing and sequencing of payments?

2. What should qualify as performance in REDD+, given that the different phases of REDD+ implementation require different definitions of performance: installing institutional/technical infrastructure, policy change, equity and livelihoods outcomes, and reduced carbon emissions? How can performance and results be measured?

3. How can non-carbon benefits be integrated into a results-based payment mechanism? How can non-carbon benefits be safeguarded?

1. How can adequate, predictable and effective REDD+ finance be achieved,

who pays? Command-and-control disincentives are most cost-effective

in Brazil towards reducing deforestation equity concerns lead to incorporation of PES in the policy mix to partially compensate for lost opportunities (Börner et al. 2015, 2014)  

Subnational institutions are highly involved in the implementation of REDD+ high level of subsidization by subnational governments, even though many of these costs are not financial (Luttrell et al., 2016)

Lessons from Fairtrade, certification and PES: upfront payments are important to enable broad participation, but transfers risks of non-performance to the buyer or donor (Tjajadi et al. 2015, Loft et al. 2014)

2. What qualifies as ‘performance’ in REDD+? How can it be measured?

Different REDD+ phases require different metrics (Wertz-Kanounnikoff and McNeill, 2012)

Policy study of 13 countries showed that the three countries with access to performance-based finance for REDD+ combined with national ownership over the REDD+ process advanced relatively more quickly in implementing policy reforms (Brockhaus et al. 2016).

Risks for under- or non-performance are influenced by a complex set of political, socioeconomic and environmental factors (Loft et al., 2016)

Risk of biased assessments and reference level setting (Angelsen 2016)

3. How can non-carbon benefits be integrated and safeguarded in a results-

based payment mechanism? To be eligible for results-based finance, REDD+ countries

must develop national Safeguard Information Systems (SIS) to monitor and regularly report on the social and environmental impacts of REDD+ (Duchelle and Jagger 2014)

Lack of guidance in reporting risks lack of action (Loft et al. 2016, Menton et al 2014)

Lessons from Voluntary Partnership Agreements in FLEGT relates to independent and formal civil society monitors and multi-stakeholder processes (Luttrell and Fripp 2015)

Allowing for a broad review of performance can enhance accountability and transparency, and increase commitment and confidence in the system (Angelsen 2016)

Conclusion REDD+ as a results-based finance: • needs to consider both carbon and non-carbon-related

performance and outcomes• still lacks clear, context-relevant criteria and metrics to help

justify and mobilize payments. Equity risks: • Distributional equity: Understanding variation in costs and

who is bearing different costs of REDD+ is critical for setting payments to incentivize effective and equitable outcomes

• Procedural equity: Enabling access to data (SIS, performance review) can support legitimacy

• Contextual equity: Ensuring agreement on performance, outcomes and their indicators is critical to national/local ownership

We acknowledge the support from:the Norwegian Agency for Development Cooperation (Norad), the European Union (EU), the UK Government, the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), Swiss Agency for Development and Cooperation (SDC), and the CGIAR Research Program on Forests, Trees and Agroforestry (CRP-FTA) with financial support from the CGIAR Fund.

& all research partners and individuals that have contributed to this research

www.cifor.org/knowledge-treewww.cifor.org/gcs

Thank you

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