Global Forest Carbon Supply
Considerations:
Learning from the FCPF Program
Forest
Carbon
Partnership
Facility
“Modeling Costs and Volumes of GHG Offsets” workshop
RFF and EPA, Washington DC 5/12/09
Ken Andrasko, World Bank/Carbon Finance Unit
Areas with high net change in forest
area between 2000 and 2005
• Global forest cover -- 3,952 million ha, 30 percent of world’s land area
• Net forest area loss 7.3 million ha/yr vs. 8.9 million ha/yr in the 1990s
FAO, 2006
Carbon balance land use change and forestry sector by region
Positive Values = Emissions
• Emissions climbing
Tr. Asia
• But reductions possible: China, Trop Amer
• Which future path will be taken?
Tr. Am
USA
Tr. Africa
China
Source: Houghton (2003)
Key Questions for Global Forest Offsets
• What activities are eligible?
• Where, and when?
Summary of
Issues
• At what cost (implemented on ground)
• How will they be measured and monitored?
• How can implementation considerations be
addressed, to bring tonnes to market?:
eg, governance, indigenous peoples, REDD
program delivery infrastructure
Global Economic Model Results Identify Quantities and Prices:
But Not Implementation Potential.
FCPF program exploring HOW to develop REDD national programs
Source: Brent Sohngen slide , this workshop
Global
Forest
Carbon
Range of
REDD costs
Estimate: Global model
estimations based on
DIMA, GTM and GCOMAP
Source: Kinderman et al,
2008; Union of Concerned
Scientists.
www.ucsusa.org
Question: Which Opportunity Set are We in?
What Are Requirements to Bring Tonnes to Market?
Global
Forest
Carbon
Range of
REDD costs
Source: Brent Sohngen slide , this workshop
Reference Case Assumptions Are Critical:
e.g., Updating GCOMAP Reference Case to FAO 2005:
Change in Carbon Density (t C/ha)
Region
GCOMAP
(2006)
GCOMAP
(2008)
% Change
Africa
74
98
33%
Central
America
71
124
75%
South
America
South-east
Asia
142
124
-13%
68
101
48%
Source: COMAP (2008) carbon density data derived from
biomass and carbon density values by country and region in
FAO 2005 Global Assessment of Forests (FAO 2005).
The Challenge:
How to translate political will in climate
negotiations, country experience to date
(mostly failures), carbon finance concept,
and field realities … into REDD action?
Basic building block concepts:
REDD
Challenge
- Reducing emissions from deforestation is feasible
– if a country can design a feasible REDD strategy,
implement it, and sustain it.
- Country is critical scale for REDD…
But subnational implementation likely
- Emissions reductions measured from agreed
reference case– each country
- Carbon finance feasible – but will vary by country
- Governance issues & stakeholder consultations
are critical
- Co-benefits of REDD may include rural livelihoods,
biodiversity conservation, development plan ning
Forests and Climate Change:
World Bank-Managed Instruments
Carbon
Funds
Climate Investment
Funds
$2.3 billion*
~ $6 billion
BioCarbon Fund
(BioCF)
Forest Carbon
Partnership Facility
(FCPF)
Forest Invesment
Program
(FIP)
$90 million
Target= $385 million**
Target= $500 million?
Growing Forests Partnership (GFP)
$15 million
* $2.6 billion if FCPF is included
** $185 m Readiness Fund + $200 m Carbon Fund. Only Readiness Fund operational ($107 million)
The Phases & Financing of REDD
• Payments
• Performance-based
FCPF Carbon Fund, Norway,
GFCM (?), carbon market (?)
FIP, UN-REDD, CBFF,
GEF, ODA
FCPF Readiness Fund,
UN-REDD, CBFF, GEF, ODA
Maintenance
Reforms &
Investments
Readiness
• Forest governance
and information
• Sustainable forest
management
• Investments outside
forest sector
• Reference Scenario
• REDD Strategy
• Monitoring System
World Bank‟s Forest Carbon Partnership
Facility, FCPF:
Announced Bali, 12/07. Declared operational: 6/26/08
The FCPF:
Two Funds
Readiness
Mechanism
Carbon Finance
Mechanism
READINESS
FUND
CARBON
FUND
Capacity
building
Payments for
Emission
Reductions
~ now $150 million
~$200 million
FCPF: 37 Countries Selected
SAR: 1 country
Honduras
EAP:
Guatemala
Suriname
7 countries
Thailand
El Salvador
Cambodia
Indonesia
LCR:
15 countries
Chile
CAR
Legend
Equatorial
Guinea
Tanzania
Africa:
14 countries
Mozambique
Countries selected
(2008)
Countries selected
in March 09
FCPF Countries in REDD: Different scales of deforestation
1,800
Deforestation Rate (thousand ha per year - from 2000 to 2005)
500
High Rates
of Loss (>
100,000 ha)
400
Medium Rates of
Loss (50,000 to
100,000 ha)
300
Low Rates of Loss
(< 50,000 ha)
200
Countries selected in March 2008
Countries selected in March 2009 PC meeting
Guyana
Suriname
Vanuatu
Vietnam
El-Salvador
Panama
Chile
Gabon
Costa Rica
Kenya
Equatorial Guinea
Republic of Congo
CAR
Colombia
Mozambique
Guatemala
Madagascar
Liberia
Lao PDR
Uganda
Nicaragua
Tanzania
Nepal
Peru
Thailand
Ghana
PNG
Ethiopia
Argentina
Cambodia
Paraguay
Honduras
Cameroon
Bolivia
0
Mexico
100
DRC
Area Deforested (thousand ha/yr)
Indonesia
Source: FAO FRA 2005
FCPF National Readiness Plan Components
Cross cutting
Management
Conceptual
framework
Policy
• Consultations and
participation
• Investment and capacity
building
• National REDD working
group
•Readiness managmt. sys
• Assessment of land
use, policy & governance
• REDD strategy
•
Methodology
Implementation
Reference scenario
• Monitoring, reporting
& verification
• Impact assessment
•
REDD Implementation
framework
Detailed R-Plan guidance document available
http://wbcarbonfinance.org/Router.cfm?Page
=FCPF&FID=34267&ItemID=34267&ft=DocLib&ht=43249&dl=1
Emissions reference scenario
FCPF Readiness
What does
„ready‟
mean?
Where to Draw the
Line between
Readiness
and
Investments?
National REDD strategy:
1. REDD strategy: how to reduce emissions?
2. REDD implementation framework
3. Stakeholder consultations
Monitoring:
1. Design system
2. Conduct forest inventory
3. Capacity building
4. Carbon stock assessment: different levels
 Using default factors/existing inventory data
 Finance additional inventories, permanent plots
 Full assessment for forest degradation
Governance:
Implementation of Land-(use) reforms
Legislative reforms
Institutional reforms
Improve law enforcement
Financial sector reforms
REDD is Context-Specific:
Each country needs to assess its own context,
potential for REDD,
other land uses,
& policy options to slow deforestation
and provide co-benefits
What REDD Strategy makes sense
for each context??
Needs Address Deforestation
Drivers & institutional setting
Total Area: 147,181 Sq. Km.
Population: 24 M
NEPAL
Different Drivers of Deforestation Need to Be Addressed
In REDD Readiness Plans
Drivers
Source: WRI, http://earthtrends.wri.org/updates/node/303
Countries Likely to Define Location & Risk (additionality)
of Deforestation, Spatially Resolved
Note: national program
likely to focus on key
subnational
Projects & areas …
Early Thinking About Reference Case
Setting: What is Needed for REDD?? At
What Scale & Resolution??
Potential
Typology
For
Reference Regional
Case ?? Reference
Case: 4-5
countries
Subnational
Reference
Case
Global
Target Reference
Case?:
-Via negotiations?
-- via analytic
method?
Issues:
National
Implementation
Reference Case ??:
- To implement
global case
Subnational
Reference Case
Global
Objective
Reference
Case ??
(independent,
via remote
sensing?)
Subnational
Reference
Case
- National scale probably key for
REDD and FCPF
- Policy discussion focusing on
global scale to date
- How resolve relation between
global, national & project??
- How to develop guidance??
Need Guidance on Reference Case Methods:
Example: Brazil‟s Amazon Fund
(Running historical average approach)
AERi ,t
PAEt ( HE i ,t
Ei ,t )
National Baseline,
Accounting &
monitoring
A nested approach when both
national accounting and
project approaches co-exist
Inter-regional strategy
and policies
REGION 1:
baseline &
policies
Multilevel
distribution
of funds &
accounting
REGION 3:
baseline &
policies
REGION 2:
baseline &
policies
Independent
REDD
Projects
REDD Funds for
Region 2
REDD payments
to stakeholders
Project 1
Transaction costs:
land registry, M&E
Project 2 …
Indigenous
Peoples
Logging
concessions
Agricultural
activities
We TargetWill
REDD ERs?
Challenge:Q: Can
REDD
Need to Address Dynamic
Land Use Change, Cost, & Governance Issues
• REDD Opportunities
Vary by Opportunity
Cost (OC) of Land, C
Density, and Threat of
Deforestation
REDD
Problem
Statement
Deforestation Threat
& C Density Class,
for East Kalimantan
(Gibbs and Brown,
2007)
• Can we identify lowOC, medium – high C
and deforestation
threat lands, with low
barriers to
implementation, and
target them for REDD
ER activities?
• What are priority
governance concerns
with these targeted
lands and REDD
strategies, by country?
Gibbs, H. and S. Brown. 2007. Geographical Distribution of Biomass
Carbon in Tropical Southeast Asian Forests: A Database.
ORNL/CDIAC.
4. REDD Implementation Framework
Addresses issues such as:
Implementation
Framework
•
National approach (national boundary) and/or subnational
approaches (regional or project boundaries);
•
Defining who would be entitled to sell Emission Reductions
or receive payments for ERs;
•
How payments to local communities, agencies, or others
would be structured and managed-- for what deliverable?
•
Tracking REDD activities or projects and payments in a
national carbon registry?
•
Clarifying specific land tenure or other legal arrangements
or policies.
FCPF Readiness: Early country cost estimates
(based on R-PINs, discussions with REDD countries and
independent estimates
Average
funding
needed to
reach
Readiness?
Average cost estimate from smaller/mid size
countries: US$ 3.3 million
(NOT included: large countries like Indonesia,
DRC, Brazil, Peru)
Need Document Defining Requirements for Forest
Monitoring and Reporting for REDD, Gaps,
& Cost Estimates + Work Plans to Improve.
Existing NFI
Capacity:
-Field
- remote sensing
-- biodiversity
•Little
experience
Identify REDD
monitoring &
reporting
system
requirements:
Perform Gap
Analysis :
2009-2013?:
Provide Tech
Assistance,
Funding:
-By country
-China listed
needs
-- by REDD
program
-Build global
guidance for
“REDD
-NRI include
biomass, soils
-- develop work
plans
-- build country
capacity
-- remote
sensing data &
processing
-- eg, need more
inventory plots?
Finer resolution
remote sensing?
-Add
biodiversity?
-FCPF uses RPlan process to
guide country
capacity building
& investment
needs
•* Experienced
-Guidance
-training
FCPF Resources and Contacts
•
Guidance on specifics of R-Plan template is being added
to FCPF website: www.forestcarbonpartnership.org.
•
Questions or comments to Ken Andrasko
(kandrasko@worldbank.org, tel +1-202-473-8355) or
Werner Kornexl (wkornexl@worldbank.org, tel +1-202458-7916).
•
When complete, submit R-Plan to:
1) World Bank Country Management Unit for your
country; and
2) FCPF Facility Management Team at
fcpfsecretariat@worldbank.org.
THANK YOU!
Kindermann et al. 2008 3-Model
Comparison
Table 3: Carbon price in $ t−1 CO2 necessary to generate a
10% and 50% reduction in deforestation in 2030
Area
10% Reduction
GCOMA
P
DIMA
50% Reduction
GTM
GCOMA
P
DIMA
GTM
Central
and
South
Ameri
ca
3.17
8.03
1.48
15.85
24.48
9.70
Africa
1.05
3.5
1.63
5.24
12.30
9.60
6.47
8.73
1.24
32.33
19.56
8.31
1.70
4.62
1.41
8.52
20.57
9.27
Southeast
Asia
Globe
Would National Registry
approach help ??
- Could country “find”
project in national
registry??
- Relation to GHG
national reporting, IPCC
GPG methods, and
REDD needs – need
consistency
Rest of forest landscape not project
REDD forest to protect
Registry of Specific
Programs or Projects:
High Precision MMV ?
Proj x
Proj W
600,000 t
CO2/yr
230,000/yr
Rest of Nation:
lower precision ?
Stratified lands
type A
Stratified lands
type B
Stratified lands
type C
1,345,000
t Co2/y