Session 6.1 engagement of private sector in redd+

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Engagement of private sector in REDD+:

issues, opportunities and challenges

Marisa CamargoUniversity of Helsinki; Indufor

Isilda Nhantumbo - IIED

12/02/2014 World Agroforestry CongressNew Delhi, India

Introduction

• REDD+: No binding agreement, but demonstration projects being tested on the ground

• Is the PS engaged in demonstration projects?• How did it acquire the right to develop and

transact credits?• How is it sharing benefits with local

communities?

World Agroforestry CongressNew Delhi, India12/02/2014

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Who is the Private Sector?

• No agreed definition: OECD, UN, EU • In this study:– For-profit: e.g. corporations, foundations,

consulting companies, brokers– Voluntary: NGOs


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Importance of the PS

• Benefits of engaging PS include:– help close the financial gap (limited public funds)– has technical capacity to help implement REDD+ more efficiently– provide price incentives to stimulate investment in SFM;– large size of investments = high potential for change

• Warsaw Framework for REDD+: 7 decisions– Finance: ‘results based’, resources from public and private,

bilateral and multilateral entities including alternative sources• But also risks… e.g. take land away from community• Private sector engagement is central to successful REDD+…

if equity considerations are incorporated


Database

• 115 demonstration projects (accounting for GhG): – Participants and target groups; objectives; activities; land

area; tenure arrangements; benefit sharing mechanisms

• LA - most projects in private land• Asia - host larger projects (ha)

World Agroforestry CongressNew Delhi, India

12/02/2014

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Database

• Objectives: Reduce emissions • Activities:

– agriculture productivity issues of smallholder sector, biomass energy efficiency in production and consumption, and sustainable management of forests including control of forest fires; participatory natural resources management and payment for ecosystems services; research on biophysical and socioeconomic aspects of REDD+ implementation; conservation of private lands and public private areas; instil political stability and security…..

• Agroforestry: – not the objective (~5/115), but feature in benefit sharing

and activities together with conservation agriculture - increase productivity from land and reduce need for expanding into natural forests


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Database: actors

• Several stakeholders: local and national governments, donors, local and international NGOs, research institutions, consultancy companies, legal firms, carbon brokers, private foundations, business, local communities

• Not all present at once• Private Sector: – Demand credits: corporations (e.g. offsetting)– Supply credits: consultancy co, brokers– Demand and supply: options to consumers


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Private sector engagement in REDD


Not only as developers, but as investors, donors, facilitators, TA…

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Rights: Who owns the carbon?


Rights: who owns the carbon?

• Carbon credit is a new commodity• Countries are still building legal frameworks

– Who owns cc? Conditions to transfer rights• Policy vacuum - developers are innovating:

– C interpreted as product of the forest, similar to wood, non-wood, wildlife, so communities (as holders of these rights) also hold rights to carbon

– Law defines - State owns all land and water including subsoil resources, so they interpreted that, by default, the State would also be the owner of carbon rights

– Governments - conservation concession borrowed from forest concession which exists in the legal framework

World Agroforestry CongressNew Delhi, India12/02/2014

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• Rights to carbon is not always discussed in project documents

• Too risky?


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• REDD+ as an opportunity to fill the policy vacuum with more equitable rules

• Inclusive legislation– Encourage more private sector investment– Ensure real community involvement and fair benefit

distribution• After all… – Project developers acknowledge that community

engagement is key to ensure sustainability to the project – risk mitigation strategy – decreases likelihood of leakage


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Benefit Sharing:how are communities engaged and

benefits distributed?


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Community engagement

• Communities are involved in several ways: – Decision making, employees, receivers of capacity

• Some projects: NO local community involvement – driven by a private land owner – NO people living in the area (and neighbor

communities will not be negatively impacted)– Communities not integrated…

• Long-term pressure on land? Population growth? Projects are in average (only) 30 years


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Benefit Sharing

• Communities not always see a share of carbon revenues - only 23%

• But project developers list several benefits: – E.g. capacity building, employment opportunities, introducing

sustainable land management practices• investment and costs incurred to secure generation of

carbon credits?• Communities also contribute with labour to ensure that

carbon credits are generated• What should we take into account when partitioning the

benefits? 12/02/2014 World Agroforestry Congress

New Delhi, India

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Benefit Sharing

• Not so transparent…– 16% give information on the share of the benefits

allocated to different stakeholders– Out of the 115 projects, only 4 contracts available– Peru project: list of preferential beneficiaries, but

the amounts allocated to each are confidential


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Conclusions


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Conclusions

• PS is an important player to help implement REDD and design more inclusive legal instruments

• However…. more transparency, accountability, integration, FPIC should be promoted to ensure the design of a more equitable and sustainable system

• WIN-WIN solutions


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Thank you!

Marisa Camargo [email protected]


mailto:[email protected]

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REDD+ in the landscape


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REDD+ at landscape level

• No evidence that projects actively involve businesses across sectors that are part of the landscape driving the local economies

• Exclusion of stakeholders poses several risks: – Increases competition and affects benefit sharing– reduces the potentially higher cumulative impacts – creates potential for leakage – sustainability is tested


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Inclusive REDD+

• Some elements of inclusive business models – Mapping of all land users and uses within the

landscape; – Conduct FPIC, including local communities but

also all other users (forest concessionaires, small timber operators, mining companies, large scale agriculture investments);

– design an intervention that brings the different interests in a shareholding approach;


Documents

Session 6.1 engagement of private sector in redd+