REDD (reducing emissions from deforestation and forest M o degradation) is based on a simple idea: pay developing countries v CIFOR i to reduce CO emissions from the forest sector. Nevertheless, n 2 g design and implementation of a REDD system raise many hard A questions: How are emissions reductions monitored, reported h e and verifi ed? How should REDD be fi nanced? Should payments a d be directed to countries, projects, or both? How should reference w levels be set? How are non-permanence and leakage accounted? i t How to achieve REDD co-benefi ts and avoid doing harm? h Moving Ahead with REDD R E D Moving Ahead with REDD: Issues, Options and Implications does D Issues, Options and Implications not attempt to give defi nite answers. Instead, the book presents I s design options for a global REDD architecture and reviews s u their implications on the 3E criteria – Eff ectiveness in reducing e s emissions, cost Effi ciency, and Equity and co-benefi ts. Anyone , O p involved in the REDD debate and negotiations can benefi t from t i this clear and concise presentation of key REDD issues. o n s a n d I m p Contributors: A. Angelsen, S. Atmadja, D. Brown, J. Brown, li c M. Dutschke, M. Guariguata, P. Guizol, M. Kanninen, R. Lubowski, a t C. Luttrell, D. Murdiyarso, L. Peskett, F. Seymour, M. Skutsch, i o O. Stella Martins, C. Streck, L.V. Verchot, P. Verweij, n s S. Wertz-Kanounnikoff and S. Wunder 9 789791412766 E d it e d b CIFOR y A r ild A n g e ls e n Edited by Arild Angelsen Moving Ahead with REDD Issues, Options and Implications Edited by Arild Angelsen Disclaimer Any views expressed in this book are those of the authors. They do not necessarily represent the views of the authors’ institutions or the financial sponsors of this book. Angelsen, A. (ed.) 2008 Moving ahead with REDD: Issues, options and implications. CIFOR, Bogor, Indonesia. Photo credits: Book cover, Chapter 3, 7 & 8: Ryan Woo, Chapter 1 & 4: Brian Belcher, Chapter 2: Herwasono Soedjito, Chapter 5: Christophe Kuhn, Chapter 6: Markku Kanninen, Chapter 9: Carol J.P. Colfer, Chapter 10: Agung Prasetyo, Chapter 11: Edmond Dounias. Printed by SUBUR Printing, Indonesia 156p. ISBN 978-979-1412-76-6 Published by Center for International Forestry Research Jl. CIFOR, Situ Gede, Bogor Barat 16115, Indonesia Tel.: +62 (251) 8622-622; Fax: +62 (251) 8622-100 E-mail: [email protected] Web site: http://www.cifor.cgiar.org © by CIFOR All rights reserved. Published in 2008 Center for International Forestry Research (CIFOR) CIFOR advances human wellbeing, environmental conservation, and equity by conducting research to inform policies and practices that affect forests in developing countries. CIFOR is one of 15 centres within the Consultative Group on International Agricultural Research (CGIAR). CIFOR’s headquarters are in Bogor, Indonesia. It also has offices in Asia, Africa and South America. CIFOR works in over 30 countries worldwide and has links with researchers in 50 international, regional and national organisations. Contents Preface iv Acknowledgements vi Summary vii List of authors xi 1 What is this book about? 1 Arild Angelsen and Stibniati Atmadja 2 What are the key design issues for REDD and the criteria for assessing 11 options? Arild Angelsen and Sheila Wertz-Kanounnikoff 3 What are the costs and potentials of REDD? 23 Ruben Lubowski 4 What is the right scale for REDD? 31 Arild Angelsen, Charlotte Streck, Leo Peskett, Jessica Brown and Cecilia Luttrell 5 How do we match country needs with financing sources? 41 Michael Dutschke and Sheila Wertz-Kanounnikoff With Leo Peskett, Cecilia Luttrell, Charlotte Streck and Jessica Brown 6 How do we set the reference levels for REDD payments? 53 Arild Angelsen 7 How do we deal with leakage? 65 Sven Wunder 8 How do we ensure permanence and assign liability? 77 Michael Dutschke With Arild Angelsen 9 How do we monitor, report and verify carbon emissions from forests? 87 Sheila Wertz-Kanounnikoff and Louis V. Verchot With Markku Kanninen and Daniel Murdiyarso 10 How do we measure and monitor forest degradation? 99 Daniel Murdiyarso, Margaret Skutsch, Manuel Guariguata, Markku Kanninen, Cecilia Luttrell, Pita Verweij and Osvaldo Stella Martins 11 How do we achieve REDD co-benefits and avoid doing harm? 107 David Brown, Frances Seymour and Leo Peskett Appendix: Overview of REDD proposals submitted to the UNFCCC 119 Philippe Guizol and Stibniati Atmadja Abbreviations 133 Glossary 135 References 143 iii Preface Emissions from deforestation and forest degradation in developing countries constitute some 20 percent of the total global emission of greenhouse gases annually. These large emissions are not included today under the United Nations Framework Convention on Climate Change (UNFCCC) or its Kyoto Protocol. If we are to be serious in our efforts to combat climate change and limit the rise in global temperature to no more than 2°C, reducing emissions from deforestation and forest degradation (REDD) in developing countries must be included in the next global climate regime. REDD has the potential to generate substantial benefits in addition to the reduction of greenhouse gas emissions. These include positive impacts on biodiversity and on sustainable development, including poverty reduction and strengthening indigenous peoples’ rights. Thus, if designed properly, REDD may produce a triple dividend – gains for the climate, for biodiversity and for sustainable development. At the Thirteenth Session of the Conference of Parties in Bali in December 2007, Norway launched its International Climate and Forest Initiative. Through this initiative, Norway is prepared to allocate up to NOK 3 billion a year to REDD efforts in developing countries over the next 5 years. The contributions from Norway and other donor countries, as well as multilateral agencies, must be seen as demonstrations of sincere interest and commitment to contribute towards reduced emissions from deforestation and forest degradation in developing countries. It will, however, be possible to achieve large-scale and sustainable reductions in greenhouse gas emissions from deforestation and forest degradation in developing countries only if these emissions are included in a global post-2012 climate regime. iv While the underlying idea of REDD is simple, there are complex issues to be solved, such as measurement, scale, funding, permanence, liability, leakage and reference levels. Norway has supported the production of this book with the aim to facilitate progress of the UNFCCC negotiations on these complex issues by clarifying options associated with each issue – and especially their implications for effectiveness, efficiency and equity. With strong political will from all parties, it is our hope and ambition that REDD can be included in the next climate agreement in a way that yields the triple dividend. Erik Solheim Minister of Environment and International Development Norway v Acknowledgements This book has been produced in just two months thanks to the enthusiasm and hard work of more than three dozen people. The authors worked long hours to write the text, and made several revisions in response to internal and external reviews. Most authors also peer-reviewed other chapters. Four of the chapters (3, 4, 5 and 10) are based on papers and Infobriefs prepared under a joint CIFOR-IPAM-ODI project, coordinated by Cecilia Luttrell. Cecilia pushed the work forward, provided significant intellectual contributions and did a very thorough job of editing those chapters. At the CIFOR headquarter in Bogor, Stibniati (‘Nia’) Atmadja coordinated the publication process, proofread and edited chapters, and provided vital inputs to various parts of the book, such as the overview of UNFCCC submissions and glossary. A number of other people at CIFOR have also been involved. Manuel Guariguata arranged for the external review. Sandra McGuire put the weight of the communications department at CIFOR behind this endeavor. Gideon Suharyanto took the lead in ensuring the book meets CIFOR’s printing standards. Rahadian Danil did most of the typesetting and graphics design, while Catur Wahyu helped improve many of the figures. David Kaimowitz and Robert O’Sullivan, the external book reviewers, gave critical and invaluable comments and suggestions. In addition to the authors of the chapters, a number of other people reviewed or contributed to one or more chapters: Laura Bozzi, Andrea Cattaneo, Joz Cozijnsen, Karsten Dunger, Manuel Estrada, Annette Frieberg, Alana George, Ole Hofstad, Dimitri Kanounnikoff, Katia Karousakis, Patrick van Laake, Michael Obersteiner, Krystof Obidzinski, Lucio Pedroni, Herry Purnomo, Paulo Moutinho, Stephan Schwartzmann, Fred Stolle and Dan Zarin. All chapters were thoroughly edited by Sandra Child, Mark Havard, Guy Manners, Claire Miller, Henning Pape-Santos and Catharine Way. vi The International Climate and Forest Initiative of the Government of Norway sponsored production of the book. The joint CIFOR-IPAM-ODI project was funded by The David and Lucile Packard Foundation. This book is the result of solid team work. To all the individuals and institutions that have contributed: terima kasih and tusen takk! Bogor, Indonesia and Ås, Norway, 30 November 2008 Arild Angelsen (Editor) vii Summary Reducing emissions from deforestation and forest degradation (REDD) is based on a core idea: reward individuals, communities, projects and countries that reduce greenhouse gas (GHG) emissions from forests. REDD has the potential to deliver large cuts in emissions at a low cost within a short time frame and, at the same time, contribute to reducing poverty and sustainable development. This sounds too good to be true. REDD is based on a simple and appealing idea, but turning the idea into action is much more complex. We must address many difficult questions before we can create mechanisms that fully exploit the potential of REDD: How can we measure reductions in emissions when data are poor or do not exist? How can we raise the billions of dollars needed to put a REDD mechanism in place? How can we make sure that any reductions in deforestation and degradation are real (additional), and that they do not lead to more trees being chopped down in other forest areas (leakage) or next year (permanence)? How can we make sure that the poor benefit? This book discusses these questions. They are highly relevant to the design of the global REDD architecture in the post-2012 climate regime that is currently being negotiated under the United Nations Framework Convention for Climate Change (UNFCCC). Each chapter deals with a key issue, presents the options and assesses the implications according to the ‘3E’ criteria: carbon effectiveness, cost efficiency, and equity and co-benefits. While there are technical solutions to all the problems, there are sometimes tradeoffs between the 3Es. Moreover, there are few purely technical issues; most options have political implications, for example, on the distribution of REDD funds across countries. REDD will require unprecedented levels of funding to achieve emissions reductions of, say, 50 percent. Public funding, including development aid, is needed for capacity building (readiness), demonstration activities, policy reforms and for activities in high-risk regions with weak governance. Tapping into carbon markets, however, has the potential to raise even larger amounts of funds. This funding might be generated by selling REDD credits directly in compliance markets, or from funds generated by auctioning of emission allowances or from a tax on carbon trade. viii