Transcript Potential and constraints of Payments for Ecosystem Services

Will the Rural Poor
Benefit from REDD?
OPERATIONALISING CARBON FINANCE IN GHANA
Roundtable Meeting, 27-28 November 2008
Michael Richards, FRR (a division of theIDLgroup Ltd,
UK), in association with Forest Trends
© 2007 theIDLgroup Ltd
POTENTIAL SOCIAL/EQUITY BENEFITS
Property Rights & Governance
• Opportunity to strengthen property rights
• REDD is an incentive for improved governance & policies
Capacity Building
• Community empowerment leading to creation of new opportunities
• Human and social capital development
• Participatory carbon monitoring
Economic/financial opportunities
•
Carbon cash & in-kind payments
• Employment
• Community forest management, ecotourism, alternative livelihoods and
farming can be compatible with REDD
Environmental co-benefits
• Erosion control, pollinisation,
water quality, biodiversity, etc.
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Equity risk 1: Carbon property rights
•
Land in Ghana is owned
by the communities (TAs)
but trees belong to state
(except if planted)
•
Does tree ownership =
carbon rights?
•
On and off-reserve
differences? NB Potential
of CREMAs
•
Increasing international
policy discussions on how
to safeguard community
rights
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National recognition of rights
and tenure based on UN 2007
Declaration of Rights of
Indigenous Peoples?
Equity risk 2: “Paying the Bad Guys”
The ‘additionality’ principle of baseline &
credit REDD favours developers
REDD policy options:

Tackle deforestation agents via
tougher laws, stronger compliance?
AND/OR

Pay deforestation agents for not
breaking a weakly applied law?
Problem of perverse incentives – both at
the national and community levels
NB Fund-based approach - easier to reward
community conservation and avoid
perverse incentives, but low ‘additionality’
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Equity risk 3. Community conservation economics
Will carbon benefits outweigh the foregone benefits
or livelihoods? (opportunity costs)
Will carbon payments be high enough to dissuade
chainsaw operators?
¢
Will the transaction costs be too high?
Premium if high social and biodiversity benefits?
‘Back-end’ carbon payments but ‘up-front’ incentives
Role for ODA to support/subsidise community REDD?
© 2007 theIDLgroup Ltd
Equity risk 4: National REDD Strategies
Policing/exclusionary policies v.
CFM and community conservation
Balance between compensating the
developers & law enforcement?
How to define and target ‘equity’ ‘do no harm’ or ‘maximise social
benefits’? (need to define pro-poor
criteria in REDD strategy)
Community REDD Investment Fund
proposed
Multiple Stakeholder Consultation
and Outreach to be basic part of
World Bank FCPF R-Plan
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Equity risk 5.
Institutional failure
Institutional/governance
problems (national or local)
increase risk & transaction costs
Transparency & accountability in
financial management is critical
Conflict resolution and judiciary
process
Effective channelling of targeted
REDD incentives
Intra-community distribution:
benefit sharing & accountability
in stool-based tenure systems
© 2007 theIDLgroup Ltd
Influence of post Kyoto REDD deal
Market based system + Fund-based system? Perverse
incentive for communities?
‘Degradation’ – will it be included? Should favour communities,
but higher measurement costs
Nested approach? Communities could gain even if national
policy failures
Accounting mechanism? ‘Partial accounting’ or ‘full
accounting’? (e.g., agro-forestry)
Include soil carbon? Africa should try and negotiate REDD +
Over-regulation of REDD carbon? Will REDD be any simpler
than CDM?
International standards and premiums? Voluntary adoption by
governments – also linked to funding?
© 2007 theIDLgroup Ltd
Wider equity concerns
Potential effect on food, land
(& timber) prices – less land
for farming, more competition
Less ODA for pro-poor
development? – donors may
prefer REDD
Forest users/farmers are
marginalised in the current
forest management regime
Will the international
community properly fund
climate change adaptation?
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MAKING REDD WORK FOR THE POOR – POVERTY
ENVIRONMENT PARTNERSHIP (PEP) REPORT
Legal, Property Rights and
Governance
•
Clear legal definitions & protection
•
Flexible and equitable long-term
contracts
•
Community mapping using GPS
•
Appropriate state enforcement
mechanisms
•
Equitable judiciary and conflict
resolution procedures
•
Community access to legal advice
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MAKING REDD WORK FOR THE POOR cont. (PEP)
Information/popular education – ‘voice and choice’
Participatory design - REDD strategy, policies and projects
Demonstration projects - participatory carbon measurement
Governments – develop & incorporate pro-poor criteria; recognise &
adopt international social standards, poverty impact assessment
Strengthen local institutions – reduce transaction costs
Partnerships and networking - support capacity building process
‘Global Support Platform for Pro-Poor REDD’ - international
initiative with regional and national focus
© 2007 theIDLgroup Ltd
Some conclusions
There are equity risks – but these can be countered by
appropriate government action supported & rewarded by the
international community
Carbon property rights and governance will be the main
determinants of equity impacts
Tensions in market-based approach – international focus on
how to make REDD pro-poor, e.g., market regulation +
Fund-based approach to compensate carbon stocks
ODA support - community conservation & adaptation finance
Local institutional capacity building, information, networking
Future – soil carbon would be more pro-poor than REDD
© 2007 theIDLgroup Ltd