VCS Jurisdictional & Nested REDD+: A core

framework to account for climate action in forests

Paula Tassara, Program Officer 8/26/2014

REDD+ FOR THE GUIANA SHIELD 4th Working Group Meeting

Macapá, Brazil

Agenda

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1) Introduction to VCS Program

2) Carbon market highlights

3) Overview of the Jurisdictional and Nested

REDD+ (JNR) Standard

4) Key points on jurisdictional baselines

5) JNR Pilots

6) Final remarks / Q&A

1) VCS Program

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Non Profit NGO

• Created in 2005 by

“to provide innovative and robust solutions for

addressing climate change”

• Mainly financed by

Issuance levy (USD$0.10 per VCU)

Donations for special initiatives

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Our Mission

WHO

VCS, public and private sector leaders all across the globe.

A GHG Program that delivers massive emission reductions

WHAT

Providing a trusted, robust and user-friendly program that brings quality assurance to carbon accounting & credits Pioneering innovative rules, tools and guidance to make carbon crediting accessible to businesses, non-profits and government entities that engage in on-the-ground climate action Sharing knowledge and encouraging the uptake of best practices so that carbon markets develop along coherent and compatible lines, complement other forms of environmental action, even as top-down regulations take shape

HOW

VCS Project Database

Projects and VCUs summary

Registered projects 1.187

Issued VCUs 153,867.122

AFOLU

Registered projects 94

Issued VCUs 22,685.81

http://www.vcsprojectdatabase.org/

VCS Program

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Verified Carbon Units (VCUs)

Other recognized

certifications (co-benefits)

Independent Third-Party Auditing (*for Crediting)

Assurance in the delivery of carbon

capture/reduction results

Validation & Verification Bodies (VVBs)

meet strict international criteria

Guard a descentralized system for the

approval of projects, programs, and

methodologies

42 accredited VVBs over 15 sectorial

scopes globally

Transparent International Registry System

Registries

Project integrity

Replace VCUs issued

by mistake

Avoid double counting

Requirements

No conflicts of interest

Financial solvency

Insurance

Protection against

insolvency

2) Carbon Market Highlights

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State of the Voluntary Carbon Markets 2014

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Volume value USD$379 million (-26%) / Average price USD$4.9/tonCO2 (-USD$5.9)

Voluntary Market Share for Third-Party Standards

Market Share by Buyer Motivation in 2013

Volumes and Value by Buyer Region, 2013

3) VCS Jurisdictional & Nested REDD+ Standard

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A Standard for REDD+?

• 2010: Agriculture, Forestry and Land Use (AFOLU

Sector) increasingly needed a set of common rules and

technical guidance for project and certification

VCS AFOLU Requirements doc, technical basis for REDD

• UNFCCC talks for REDD in 2020/2030… ??

• Growing bilateral/multilateral (donor)public sector

demand for results-based-payments in REDD

• Non-Annex I countries binding commitments 2015?

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Jurisdictional & Nested REDD+ Requirements

First global standard for

national or subnational

REDD+ programs (and

nested projects)

First published: Oct 2012

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Using the JNR Framework

1) A as a tool for jurisdiction-wide (or ecoregion)

accounting to measure & monitor progress in

reducing def/deg, in combination with other land use

strategies and policies.

Leading to non-verified emission reductions (i.e. non-

credited)

2) As a core jurisdictional platform for REDD+ leading to

verified emission reductions

To generate jurisdictional & nested carbon credits

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At a glance, the JNR framework:

• Provides best practices in REDD, tools and guidance to

address complex technical issues such as:

• Carbon accounting, deforestation/degradation baselines & MRV

• Full leakage accounting

• Non-permanence risks

• Aligns policies, programs/project activities to scale up

emission reduction potential

• To harmonize and increase market and results-based

public-funding streams

• Ensures fungibility of emission reductions/credits across

sectors, geographies and scales – majority of

international REDD+ projects are already using VCS

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JNR docks into multiple sources of finance

Incentives (markets and results-

based funding)

Social & Environmental Safeguards

Carbon Accounting Framework (including mechanisms for verification, crediting and ensuring permanence)

Jurisdictional & Nested REDD+ (JNR) Standard

Voluntary & Domestic Markets

California REDD Early

Movers

FCPF Carbon Fund

REDD+ SES SESA &

ESMF

+ MF indicators on resource tenure, benefit sharing,

non-carbon benefits

+ benefit sharing and own-effort by

jurisdictions

+ CA regulatory requirements to convert VCUs to Compliance Units

+ potential local requirements for domestic market

Additional

Requirements (potential VCU tags)

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E.g. California GCF States

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JNR Compatibility with Carbon Fund Meth Framework

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• Gap study: JNR Requirements automatically

satisfy 85% of the MF indicators (FCPF), with no

or minimal additional effort. Main differences:

Degradation accounting

Baseline/reference level: FCPF must not exceed the

historical average, except in very specific cases, while JNR

allows use of trends and modeling if more plausible than

pure average

World Bank safeguards must be applied, while JNR

requires conformance with UNFCCC Cancun Safeguards

JNR Scenarios

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Jurisdictional Program Description (JPD)

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Descargar: http://www.v-c-s.org/program-documents

Jurisdictional Baseline Description (JBD)

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Download: http://www.v-c-s.org/program-documents

How does it work? –starting point…

Jurisdictional Baselines (JBD):

• Mandatory for deforestation

• Optional for degradation and carbon stock increases

A Jurisdictional Program Description (JPD) captures….

• Identification of drivers/agents, mapping, monitoring, analysis..

E.g. expansion of road networks, agriculture, mining....

• Deforestation/deforestation reduction strategies…

E.g. work with immigrants or local communities, policies to

mitigate road construction, feasible responsible mining practices

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Examples of JPD Sections

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1 Jurisdictional REDD+ Program details

1.2. Jurisdictional Proponent

1.3. Other participating entities

1.4. Program start date

1.5. Program crediting period (5-10 years)

1.6. Emissions removals/reductions estimates

1.7. Jurisdictional location and geographical limits

1.10 Compliance to laws, statues and other regulatory

frameworks

1.11 Right of use to emission reductions

JPD Sections (cont)

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3 Jurisidictional baselines (JBD)

3.3 REDD+ activities and drivers of def/deg

3.5. Program boundaries (i.e. carbon pools to account for)

3.6 Jurisdictional baseline method description (in JBD)

4. Quantification of emission reductions/removals of GHGs

(baseline emissions, program emissions, leakage, totals)

5 Monitoring

*A JNR Guidance document will soon be released to lend

support in addressing each of these components!

Focus on JPD risk mitigation components

• Crediting: benefits distribution issues, avoiding double counting

• “Grandfathering” of existing projects

• Social & environmental safeguards

• JNR Leakage Tool: stepwise approach to estimating leakage emissions for def/deg:

Leakage categories: subsistence & market effects

• Non-Permanence Tool (for buffer account): “insurance” against carbon reversals –buffer percentage

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4) Jurisdictional baselines: key points

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Jurisdictional Baseline Development

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(JNR 3.11.11) For the historical reference period, al least

two BL for emissions/removals. Options:

• Annual historical average over a 8-12 year period,

ending within 2 years from program start date

• Historical trend (increasing or decreasing) based on

changes over at least 10 years, ending within 2 years

from program start date

Adjustments to not overestimate: past infrastructure

construction, natural disturbance

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Identifying the most plausible scenario

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Option: to model/adjust BL to créate a new projection of emissions (JNR 3.11.11):

• Projections for def/deg with variables that influence trajectory: GDP, forest access, commodity prices, demographic growth, other

• Demostrate adjustments according to certainty levels (ej: correlations with independent variables versus direct projection)

• Or, demostrate that independent variable trends lead to trends in def/deg..

*Econometrics!

Identifying the most plausible scenario (2)

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• National development plans, national/subnational

policies

• Data from analogue jurisdiction within same country,

with similar drivers/agents, landscape configurations,

social, economic and cultural conditions, similar

throughout the baseline period

• “Guidelines for REDD+ Reference Levels: Principles

and Recommendations” (2011) Meridian Institute

• Approved VCS methodologies (REDD)

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•

5) JNR Pilots

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From REDD+ projects to programs

JNR pilot process

• VCS supports national and subnational jurisdictions

in Latin America, Africa and Asia

• Process

1) Gap analysis

2) Work plan to guide the REDD+ Program

implementation, aligned with JNR

3) Goal: to register baseline and in some cases, a full

REDD+ program, verification and credit issuance

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Pilot: State of Acre

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REDD+ milestones in Acre

• 2003-2008: Acre GDP grew 44% while deforestation fell 70%...

• 2006: Economic and Ecological Zoning Plan approved to

regulate economic activity in 12% of the land already deforested.

Established parameters for sustainable forest management, and the

harvest of non-timber products in forested regions..

• 2006: Ambitious plan: Program for the Valuation of

Environmental Goods, including best practices and certification for

agriculture, livestock, forestry, and family farms in areas that are

already deforested or altered, and forest management in intact

forests.

• 2008: Acre State adopted a deforestation target: 80% reduction

below average 1996-2020 rates..

Pilot: Acre, Brazil

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• Acre: will be the first jurisdiction-wide program to deliver

compliance-grade REDD+ credits –California (GCF)

• KfW / REDD Early Movers: performance-based payments

totaling ~$25 million USD through REDD Early Movers, with

Acre using JNR as core accounting platform

• VCS agreements with Acre’s Institute of Climate Change and

Regulation of Environmental Services (IMC) and the Amazon

Environmental Research Institute (IPAM) to outline and

provide support to JNR pilot activities

• Acre’s jurisdictional program is currently undergoing pre-

validation under JNR Scenario 2, and seeking to issue VCUs

in 2015

6) Final Remarks, Q&A

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Finally.. JNR

• Aligning crossboundary jurisdictional efforts

• Facilitate technical exchange among participants

• Potentially save significant costs in MRV

• Opening options for program finance on the long

term

• Stimulate the development of nested projects

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Q&A

26 August 2014

VCS Association

1730 Rhode Island Avenue, NW

Suite 803

Washington, DC 20036

www.v-c-s.org

Paula Tassara

Program Officer

ptassara@v-c-s.org

Thank You

Paula Tassara

Program Officer

ptassara@v-c-s.org

SA Regional Office

Santiago, Chile

HQ Office

Washington DC, USA

JNR Leakage Tool

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• Tool for estimating jurisdictional leakage (jurisdictions can also

develop their own approaches)

• Applicability

• Subnational jurisdictional programs

• Used to estimate leakage from deforestation and degradation

activities

• Framework

• Identify the principle agents and drivers of deforestation/

degradation

• Identify potential for jurisdictional leakage and leakage mitigation

strategies

• Analyze leakage categories (Global commodities, domestic

market and subsistence, deforestation to degradation)

• Determine jurisdictional leakage deduction

JNR Non-Permanence Risk Tool

• Tool to estimate non-permanence risk to determine the buffer

withholding

• Applicability

• All jurisdictional programs

• Structure

• Evaluate risk based on various risk categories which include:

political and governance, program design and strategy, carbon

rights and use of carbon revenue, financing risk and natural risk

• Risk calculation can be reduced where risk mitigation strategies

are implemented

• Risk calculations for each category are summed to determine the

final percentage of emission reductions/removals to be deposited

in the jurisdictional pooled buffer account

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Ajustes en la LBJ por Eventos de Def/Deg

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(JNR 3.11.11.5 ) Para evitar sobre-estimar emisiones en el escenario del programa REDD+ (ej: próximos 10 años), el efecto de eventos de deforestación discretos en el pasado se debe excluir por las siguientes pérdidas:

• Proyecto de infraestructura >1000ha (*no expansión o patrón de caminos)

• Disturbios naturales >1000ha (eventos de bajo retorno >10 años)

• Pérdidas de >10% por impacto de proyectos comerciales de gran escala

Nota 1: para disturbios menores no se asumen emisiones 100% instantaneas de reservorios de carbono (ver AFOLU Requirements 4.5.3)

Nota 2: Prevenir proyectos de gran-escala planificados puede constituir la actividad principal de proyectos anidados.

Coordination, transparency = long term credibility

Local needs, REDD, government policies, CSR,

CC mitigation targets..

Strategies & actions for expected outcomes

JNR:

Mitigation,

Sustainable productive

systems, social development

Framework supporting land-use planning based on carbon accounting &

monitoring