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© 2007 theIDLgroup Ltd
Will the Rural Poor Benefit from REDD?
OPERATIONALISING CARBON FINANCE IN GHANAOPERATIONALISING 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, eco-tourism, alternative livelihoods and farming can be compatible with REDD
Environmental co-benefits• Erosion control, pollinisation, water quality, biodiversity, etc.
© 2007 theIDLgroup Ltd
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
National recognition of rights and tenure based on UN 2007 Declaration of Rights of Indigenous Peoples?
© 2007 theIDLgroup Ltd
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’
© 2007 theIDLgroup Ltd
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?
Equity risk 3. Community conservation economics
© 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
© 2007 theIDLgroup Ltd
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
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?
Wider equity concerns
© 2007 theIDLgroup Ltd
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
MAKING REDD WORK FOR THE POOR – POVERTY ENVIRONMENT PARTNERSHIP (PEP) REPORT
© 2007 theIDLgroup Ltd
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
MAKING REDD WORK FOR THE POOR cont. (PEP)
© 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