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Workshop: South‐South collaboration on REDD demonstration activities, Manaus Brazil 2009
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Thursday, February 12, 2009 South-South Collaboration Workshop
Amazonas, Brazil
Marisa Meizlish Director New Forests Advisory Inc +1-415-321-3301 [email protected]
Amazonas Workshop: Readiness for REDD
Experiences from Papua, Indonesia
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Outline
1. Introduction to New Forests
2. Context for Papua Project
3. Papua project summary
4. Project characteristics
a) Governance
b) Baseline
c) Consultation / social
d) Link to national strategies
e) Distribution of benefits
f) Financing
5. Lessons learned & conclusions
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1. New Forests
• Private for-profit forest investment management and advisory services firm
• Headquartered in Sydney, Australia, with offices in Washington, D.C., San Francisco and Kota Kinabalu, Malaysia
• Investments primarily in Australia, New Zealand and the Asia Pacific region
• REDD: began studying in 2007 and developing the Papua project in 2008; hope to achieve certification (Voluntary Carbon Standard) in 2009
• Developing other smaller REDD projects as part of larger investments
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2. Papua Project Context
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2. Papua Project Context: Deforestation Drivers
• 90% of world’s palm oil exports come from Malaysia & Indonesia
• 300,000 ha converted per year globally
• Luxury products (cosmetics, shampoos, food) & biofuels
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2. Papua Project Context: REDD Markets
Mechanism Market Mitigation – Forestry
Project-Based / Credits (“market”)
National Accounting (“non-market”)
Regulatory
2008: $118B 3.9 BtCO2
UNFCCC CDM – Only Reforestation “CDM” – REDD post-2012 ?
Reforestation / Deforestation
REDD post-2012 – ?
Domestic Regulatory Markets (i.e. U.S.,
Australia, Canada)
Reforestation Forest Management
REDD – ?
Reforestation / Deforestation
Voluntary
2008: $499M 100 MtCO2
Business Commitments / Marketing /
Personal Choice
Reforestation Forest Management
REDD not relevant
• Voluntary market projects can move the REDD market forward while complex regulatory mechanisms are negotiated
• Develop technical methodologies and new business models
• Ultimately, REDD will survive or fail in regulatory markets
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3. Papua Project Summary
Mamberambo
Mimika
• Began with Memorandum of Understanding between Governor Suebu & New Forests, May 2008
• Government nominated 3 concession areas – 2 were prioritized after desktop review
• June 2008, site visits to begin feasibility and project design
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3. Papua Project Summary
• Project framework
o Baseline assumes conversion to palm
o Approximately 28MtCO2e conserved under project scenario
o Voluntary carbon sales – Voluntary Carbon Standard (VCS) & Climate, Community & Biodiversity Alliance Standards (CCBA)
o Revenues to local foundation, government & investors
o Local partner with political & implementation experience
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4a. Governance
• MOU for joint development of REDD project: “commercially sustainable model for forest conservation and community development”
• Applying for provincial license that will grant carbon rights to New Forests
• Term sheet defines financial arrangements
• Regency and district governments provide local political and logistical support
• Papua Carbon Foundation receives revenue from credit sales to fund community development & forest protection activities
o Governed by Advisory Committee with local stakeholders and relevant experts
Gov. Suebu signing MOU, May 2008
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4b. Baseline • No existing methodologies for Avoiding
Planned Deforestation - areas with low rates of historical deforestation require technical rigor
• Other areas of province have higher deforestation rates but causal “link” needs to be established
• Limited data and existing quantitative analysis of deforestation drivers
Where we are now:
• Understanding data requirements needed to establish biophysical and economic feasibility of conversion
• Understanding modeling requirements to demonstrate likely rates of deforestation
• Evaluating in-house capabilities and resource needs
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4c. Consultation Process
• Dozens of small villages in both project areas – primarily small scale agriculture, sago palm harvesting, hunting & fishing
• Loosely organized through district & regency governments
• In June 2008 met with local governments and held village meetings in conjunction with local NGOs and met with dewan adat (tribal council)
• “Oxygen” project
Village meeting in Bagusa, Mamberamo, June 2008
Meeting with regency & district government officials and village elders in Mimika, June 2008
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4c. Consultation Process
• Initial feedback at all levels of was positive
• Written letter of support from head of dewan adat in Mamberamo
• However, questions remain regarding community development aspirations, project activities and socio-economic considerations relevant to project design and implementation
Receiving letter from head of dewan adat in Casanoyagia, Mamberamo, June 2008
• Free, Prior & Informed Consent crucial to ensure successful project and social & environmental outcomes
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4c. Consultation Process • Free, Prior & Informed Consent
o Limited guidance & standards
o Work with best experts with field experience in community engagement for forestry in Papua and Indonesia
o Intention to provide full information about the project and potential outcomes & risks
o Decisions and debate at the community level to accept or reject the project
• Help shape the objectives and management plan for the Papua Carbon Foundation
• Further establish channels of communication between impacted communities and government
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4d. Link to National Strategies • Indonesia is extremely active in REDD
o More than 20 REDD projects in development in the country
o Participant in the UN-REDD Programme and the World Bank Forest Carbon Partnership Facility
o Bilateral agreements with Germany (Forest and Climate Change Program) and Australia (Forest Carbon Partnership)
o Governors of Aceh & Papua (and several Brazilian states) have signed an MOU with US governors for inclusion of REDD credits in emerging carbon schemes
• Unclear how these activities will interact on a technical level (i.e. carbon accounting)
• However, biggest questions now are legal and financial
o Draft national legislation issued in mid-2008 and national government is now working to revise and finalize legislation – June 2009
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4e. Distribution of Benefits • Beneficiaries at village, district, province and national level
• Private investment necessitates returns
• Primary distribution channel is the Papua Carbon Foundation
o annual disbursements to fund community development and forest protection activities – determined by FPIC process
o Advisory Board comprising representatives of community stakeholders and relevant experts
• Remaining revenue: government, investors & project managers
New Forests & Emerald Planet staff with provincial Forestry Department staff and government officials in
Mamberamo, June 2008
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4f. Project Financing • New Forests represents private
investors interested in financial and environmental returns
• Skilled in monetizing environmental assets associated with forestry investment
• Well aligned with Papua’s objectives and project parameters
• Returns delivered through credit sales over time
Managing Directors of New Forests and Emerald Planet meeting with Governor Suebu, May 2008 c
• Upfront costs shared among project partners
• Long-term commitment to sustainable resource use in Indonesia
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5. Lessons Learned • Projects in areas with low rates of deforestation have high hurdle
to establish evidence-based baselines
• Area, such as Papua, where this is limited data availability make this even harder
• Legal uncertainty for REDD projects outside national-level demonstration activities – right to transact credits?
• Also face technical uncertainty – project vs. national level baselines?
• FPIC is time consuming and requires dedicated resources – lack of standardized guidance
Difficult to get early project financing where there is no established legal & methodological frameworks
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6. Conclusions • Private investment can play pivotal role in more challenging
REDD areas that attract less public & multilateral funding
• Will take on the risks as long as there is some certainty on fundamental issues: o Legal right to transact in carbon
o Legal arrangements for revenue sharing among government agencies/levels
o Legal recognition of project activities within national-level activities
• Donor / grant / multilateral finance remains important for information gathering, data analysis and FPIC/community engagement
Arial view of Mimika site, June 2008
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www.newforests.com.au