Update on the

Forest Carbon Partnership Facility

Steering Committee Meeting

Paris, July 9, 2008

… Make REDD

Happen

A Partnership to …

GuidingPrinciples

Partnership Developing (“REDD”) countries have equal voting

rights with donors and CF participants on Participants Committee (10 + 10 + Observers)

Voluntary & country-driven Neutral to climate change negotiations

Capacity building Various kinds of performance-based financial

approaches will be tested Catalyst

$300 million will not save the world’s forests Private sector is needed for scaling up

National National strategies for REDD National reference scenarios Projects within national accounting approach “National” does not mean “governmental” only

Test, learn and disseminate

ReadinessFund

(Bank as Trustee)

ReadinessFund

(Bank as Trustee)

Carbon Fund

(Bank asTrustee)

Carbon Fund

(Bank asTrustee)

FCPF Governance

Participants Committee (PC)Participants Committee (PC)

Facility Management Team(Bank)

Facility Management Team(Bank)

Ad Hoc Technical Advisory Panels

Ad Hoc Technical Advisory Panels

Carbon Fund Participants Committee

Carbon Fund Participants Committee

Participants AssemblyParticipants Assembly All Eligible REDD Countries, Donors and Buyers

- Forum for exchange of information- Meets at least annually - Opportunity for ‘subgroups’ to meet and discuss experiences, elect their representatives

Primary decision making body, including all policy issues

Decision making on specific carbon transactions

ObserversObservers

Two Mechanisms

Readiness Mechanism

READINESS FUND

Capacity Building(2008-?)

Carbon Finance Mechanism

CARBONFUND

Payments for Emission

Reductions(2009-?)

~$100 million ~$200 million

Incentive Payments for REDD

Reforms &Investments for

REDD

REDDReadiness

FLEG, alternative livelihoods, alternative

agribusiness investments,

intensification of agriculture and cattle ranching, improved

infrastructure planning, reforestation,etc.

Reference scenario,REDD strategy,

Monitoring system

Value ≥ Cost

FCFP Readiness FundInter alia

Forest Investment FundInter alia, once operational

FCPF Carbon FundInter alia

Readiness + Investments + Payments

39 Requestsfor

Participation&

24 R-PINs

South America (7): Argentina Bolivia Colombia Ecuador Guyana Paraguay Peru

Meso America (7): Costa Rica El Salvador Guatemala Honduras Mexico Nicaragua Panama

SE Asia & Pacific (8): Indonesia Lao PDR Malaysia Papua New Guinea Philippines Thailand Vanuatu Vietnam

Africa (15): Cameroon Central African Republic Dem. Republic of Congo Ethiopia Gabon Ghana Kenya Liberia Madagascar Republic of Congo Senegal Sierra Leone Sudan Tanzania Uganda

South Asia (2): Nepal Pakistan

+ 3 Brazilian states (Acre, Amazonas, Mato Grosso)

Contributions Announced

and Formalized

as of July 9, 2008

Readiness Fund

Carbon Fund Total

Australia 11 11Denmark 5 5EC 8 8Finland 5 5AFD 6 6Germany * ‡ 5 58 63Japan ** 5 5Netherlands * 12 12 23Norway 5 5Spain 8 8Switzerland 7 7TNC 5 5UK * 15 15 30USA 5 5TOTAL 84 102 187* This is only an indicative breakdown between RF & CF** Total pledge worth USD 10 million‡ Full contribution will be available over 4 years

Steering Committee

REDD Countries

Bolivia Gabon Ghana Lao PDR Liberia Madagascar Mexico Panama Vietnam

Donors

AFD Australia Finland Japan Norway Spain Switzerland United States

(United Kingdom)

Timeline

October 2006: Start of consultations December 2007: Announcememt in Bali June 2008:

June 25: FCPF declared operational Internal and external reviews of country

submissions (Readiness Plan Idea Notes)

July 2008: July 8: Technical Advisory Panel Meeting with 18

REDD Countries to discuss R-PINs July 9-10: Steering Committee meeting to select

initial countries in Readiness Mechanism July 31: deadline for submitting R-PINs for second

round

September 2008: (September 17-19): Organizational Meeting

Reference Scenario Historical emissions

How many years and data points?

Future emissions? Adjustment coefficient applied to past

emissions? Based on national development policy?

Estimation of carbon stocks Forest inventory Test various methodologies based on

IPCC Good Practice Guidance and Guidelines

Readiness Mechanism

(1)

National REDD Strategy In the countries interested in REDD, how will emissions be

reduced? Where? When? At what cost? Economic analysis National or sub-national implementation? Policies or projects? How will investment costs be financed? Who will participate in REDD activities? How will they be able to participate? Information,

consultations, capacity building Who will be allowed to sell? Legal framework How will additional social and biodiversity benefits be

recognized? Valuation, monitoring? Sector strategies (environment, forestry, energy, transport,

etc.) are the basis for the national REDD strategy, but the focus is the resulting emission reductions

The strategy must be national Public sector Private sector Civil society Indigenous peoples

Readiness Mechanism

(2)

National Monitoring System System design + implementation National accounting of emissions Link sub-national projects with national

system National registry including

sub-national/private accounts

Readiness Mechanism

(3)

R-PIN Selection

3 chances to have R-PIN approved July 2008 (September) 2008 (January 2009)

An R-PIN not selected can be improved based on TAP and SC comments and resubmitted One TAP reviewer to check that

comments have been taken into account

Participants Committee to reconsider R-PIN

Carbon Fund:

What Would Be Created

and Paid For?

Emission Reduction (ER) generated by reducing deforestation and/or degradation

ER = all rights, titles, and interests attached to a ton of CO2e of emission reduced

ER delivered to the FCPF when verification report is received

Performance-based payments Carbon + other benefits ERs distributed to Carbon Fund

Participants through internal registry

ER Creation

High quality standards, set in accordance with • IPCC Good Practice Guidance and Guidelines• Emerging UNFCCC modalities• Guidelines from Participants Committee

Quality control & enhancement• ER Program based on REDD Strategy from “ready”

country• Selection among competing ER Programs by

Carbon Fund Participants Committee, aided by Technical Advisory Panel

• World Bank’s due diligence • Ex ante assessment by third party• Ex post verification by third party

Other Work:Economics

of REDD

3 seminars on the costs of REDD:

3rd seminar (May 27, 2008): Attended by leading economists + 60 Bank

staff + 20 visitors. Papers and presentations posted at

http://go.worldbank.org/WGOVBCRCG0 Consensus paper on different methods to

estimate costs will be produced in August

Study being launched in Peru Valuation Note for FCPF Carbon Fund

being updated Discussion on April 1, 2008 CF Price Advisory Committee

REDD Cooperation

Example of Panama:

R-PIN to FCPF Requested 8

Areas for Support

Methods Issues

in BLUE

REDD Need:Panama in R-PIN to FCPF

FCPF

UNDP, UNEP, FAO

Other Partners

1) Ensure methodology used in forest inventory allows estimating C stocks

2) Support implementation of SFM at national level

3) Assess historic emissions from deforestation and degradation: define technical requirement and how far back to assess

4) Projection of deforestation emissions into future

5) Revision of national REDD strategy: links bet. current development and REDD strategy

6) Design system to monitor emissions and emissions reductions from deforestation

7) Implement the monitoring system

8) Design of system for targeted financial incentives for REDD

THANK YOU!

For more information:

www.carbonfinance.org/fcpf