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Archive for the ‘incentives’ Category

Incentives to sustain forest ecosystem services: A review and lessons for REDD, Ivan Bond, Maryanne Grieg-Gran, Sheila Wertz-Kanounnikoff, Peter Hazlewood, Sven Wunder, Arild Angelsen. IIED (2009), 62 pages, isbn: 9781843697428

iied incentivesAn assessment of the utility of payments for ecosystem services as a tool for REDD was commissioned by the Norwegian Minister for the Environment and International Development to inform Norway’s International Climate and Forest Initiative (N-CFI). The N-CFI specifically recognises that REDD efforts should contribute to securing indigenous peoples’ rights, improving the livelihoods of forest-dependent communities, and to conserving forest biodiversity. This report represents a summary of ten papers which made up the assessment.

The report looks into how compensation for ecosystem services could contribute to REDD, and reviews 13 Payments for Ecosystem Services (PES) projects in Africa, Southeast Asia and Latin America. PES are designed to provide financial incentives to the land owner to preserve the forest and are thought to be an effective instrument for implementing REDD. Under PES, payments for environmental services are conditional and are only made if the service, such as conserving forest areas, is delivered.Important preconditions for success include supporting improved forest governance, land tenure and rights for forest dependent communities, as well as scaling up current small-scale experience with PES.

One of the recurring concerns with payments for ecosystem services, particularly in the context of the much larger-scale payment schemes that would be required for REDD, is that indigenous and forest-dependent communities will not benefit or, worse, will suffer harm. Prospective areas of concern that payments for REDD might impact include:

  • Weakening of land and resource rights of indigenous and forest dependent communities.
  • Equity in opportunities to participate as sellers of carbon.
  • Equity in payment levels and terms – vulnerable communities may be subjected to exploitative contracts.
  • Local economy impacts, which through effects on food prices and employment can affect both participants and non-participants in PES.

However, this review of PES schemes finds little evidence of long-term adverse effects on equity for the four issues above. If anything, PES schemes have proved to generally yield positive impacts on poor people in the areas where they were implemented.

“The hypothesis that PES tools could lead to inequity and exacerbate poverty is not borne out by the literature review or the four regional case studies. The evidence is that some programmes have made small and modest impacts on livelihoods. Recent work on payments for watershed services also concludes that these mechanisms have not yet directly impacted on poverty reduction to any great extent, although their indirect impacts have significant potential for poverty reduction.” – Extract from Incentives to sustain forest ecosystem services.

Some of the specific findings include:

  • PES schemes have not led to weakening of land tenure and in some cases have strengthened it.
  • In Southeast Asia, where PES mechanisms are just emerging, the approach of strengthening land rights (Sumberjaya) or enforcing traditional rights (Ulu Masen) do have potential livelihood impacts where local people’s rights too often have been ignored.
  • PES mechanisms have a longer history and are being more widely applied in Latin America than elsewhere. Initial assessments showed that the first generation Costa Rica national PES scheme was failing to reach poorer farmers and land users who held no formal land titles and could not afford the associated transaction costs. Subsequent iterations of the programme have developed mechanisms to specifically ensure that they are targeted to poor people and that the barriers to entry are either lowered or removed.
  • Small-scale farmers with informal land tenure have been able to participate in some PES schemes, notably the national payment for watershed services scheme in Mexico. One of the measures used in Mexico (and more recently in Costa Rica) to facilitate participation of small-scale farmers and communitiesis ‘collective contracting’, where several small-scale farmers conduct the contracting process together and in this way reduce individual transaction costs.
  • In spite of seemingly low levels of payment, PES is popular with farmers. There is an eagerness to enter PES schemes (both Costa Rica’s and Mexico’s schemes are over-subscribed) and sometimes a willingness to negotiate permanent payments after a pilot, as in Pimampiro. This enthusiasm is an indication that PES schemes are perceived as advantageous by those involved.
  • There is little evidence of local economy impacts on prices and employment.

Download the Incentives to sustain forest ecosystem services: A review and lessons for REDD report [pdf]…

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Evaluation of the work of the Forest Governance Learning Group 2005 – 2009 Tom Blomly, International Institute for Environment and Development, August 2009

IIEDReportResearchers working with forest community groups and policy makers in ten countries in Africa and Asia have developed a novel way to improve the flow of social and environmental benefits from tropical forests, according to an independent evaluation of an International Institute for Environment and Development (IIED) project published today.

In each country, IIED and partners set up FGLG teams to bring together representatives of communities, governments, civil society organisations and businesses to explore the drivers of poor forest governance and to influence national and sub-national policymaking.

“With forests set to take centre stage in a new global deal to tackle climate change, there is a desperate search underway for proven ways to improve governance to ensure that forest resources are managed for the public good… That search should look at what’s been achieved by the Forest Governance Learning Group (FGLG). Its experience shows how to improve governance in ways that lead to tangible changes in policy with positive impacts on people who depend on forests.” – James Mayers, project leader and head of IIED’s Natural Resources Group

Through stimulating, for example, improved parliamentary debate, enhanced civil society action and more informed journalism, the project has achieved various impacts, including increased access rights to collect and manage non-timber forest products in state forest land for Indigenous community groups in Orissa state, India, and more secure livelihoods after action which successfully reversed a government decision to degazette the forest and convert it to sugar plantations for forest-dependent households living around Mabira forest in Uganda.

The independent evaluation, commissioned by IIED, provides an overview of the progress, achievements and impact of the Forest Governance Learning Group initiative to date and concludes with a range of recommendations for consideration with regard to future support.

Download the Evaluation of the work of the Forest Governance Learning Group 2005 – 2009 report [pdf]…

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Financing Flows and Needs to Implement the Non-Legally Binding Instrument On All Types of Forests: A study prepared for the Advisory Group on Finance of the Collaborative Partnership on Forests with the support of the Program on Forests (PROFOR) of the World Bank, October 2008

UN Forum on Forests

Written by Markku Simula, this background paper was prepared for the Advisory Group on Finance of the Collaborative Partnership on Forests, in advance of the meeting of the Ad Hoc Expert Group on Finance of the UN Forum on Forests (UNFF), which will be held from 10-14 November 2008, in Vienna, Austria. The paper maps the needs and available sources and mechanisms for funding, taking into account recent developments, including in the climate change regime.

According to the paper, avoiding deforestation would be among the lowest cost mitigation options to avoid increasing CO2 emissions and possibly also increasing carbon sinks. At the same time, other benefits like biodiversity conservation, poverty reduction and climate change adaptation could also be
enhanced. Through carbon revenue, prospects for the economic viability of SFM in developing
countries are expected to substantially improve as at least part of the ecosystem services that
forests provide could be remunerated.

“REDD compensation as a win-win instrument is being increasingly supported by practically all stakeholders for a variety of reasons. For tropical country governments REDD can represent an opening of a new source of financing for national priorities; for donor countries it can be a low cost option for carbon offsets; for environmental NGOs REDD can generate additional resources for biodiversity conservation; for the rural poor badly needed income and financial support to community development as well as a means to improve their forest tenure rights; for the private sector REDD can be an additional source of funding to make SFM financially viable; for political elites yet another opportunity of income; for multilateral development banks REDD can open up new ways of doing business in the context of maintenance of global public goods; and for intergovernmental organizations it offers a new area of intervention in technical assistance and a new funding source.” — Markku Simula, extract from Financing Flows and Needs to Implement the Non-Legally Binding Instrument On All Types of Forests

The report notes that meeting such a broad range of varied interests in REDD schemes will be difficult and several issues need clarification: (i) uncertainty about co-benefits, (ii) risk for violating the rights of indigenous and other local populations, (iii) possible impact on land prices, (iv) equity in distribution of REDD payments, (v) governance arrangements of REDD schemes, (vi) slowness of necessary national-level policy and legal reform processes, (vii) stakeholder participation, (viii) limited access to REDD financing by only forest-rich countries, (ix) possible exclusion of countries which have already addressed deforestation, (x) possible exclusion of drylands and other low carbon intensity forest lands, (xi) definitions and methodologies for treatment of land degradation and restoration of deforested areas, (xii) measures to address underlying causes for deforestation and forest degradation, (xiii) lack of proper understanding on the role of timber harvesting in carbon stock management, (xiv) the level of REDD application (national, sub-national or project), (xv) use of a market mechanism or a fund mechanism, (xvi) possible flooding of the carbon offset markets with REDD credits, (xvii) transaction costs, etc.

Download the Financing Flows and Needs to Implement the Non-Legally Binding Instrument On All Types of Forests paper [pdf]…

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Jeff Hayward: Quantifying Carbon, Communities, and More
Ecosystem Marketplace | 27 October 2008

Jeff HaywardThe debate over Reduced Emissions from Deforestation and Degradation (REDD) hinges on how to verify the amount of carbon captured in trees and how to determine whether the actions being paid for actually cause a net capture of carbon. It’s sticky territory that the climate initiative manager for nonprofit conservation organization Rainforest Alliance – Jeff Hayward first traversed while validating the then-nebulous concept of “sustainable” forestry, and he believes today’s projects will only succeed if they think beyond carbon.

“Carbon alone is not going to protect these forests… To be sustained over time, carbon projects must take an integrated approach, bringing in additional sources of income for the communities whose participation is essential to the survival of these projects.” — Jeff Hayward, Rainforest Alliance

Hayward says that, over time, he’s developed the ability to know going in which projects have the highest chance of success. “The first clue is a well-run organization with a really concrete set of goals and objectives, and the institutional capacity to make it happen,” he says. Then Hayward and Rainforest Alliance look at the project’s environmental and social impacts. Are the right tree species being planted? How does the project aid biodiversity? And, how’s the community relationship — are materials in a local language? Are they explained in a way that a non-scientist can understand?

Hayward says that all of the recent REDD projects he’s evaluated had not just conservation components but other types of economic benefits to local people as well. “What’s pretty cool about all of this is that in the last few years, so much has come together that was missing,” Hayward says, citing the emergence of markets and convincing carbon-based science, along with a surge of public support with the help of the movie An Inconvenient Truth. “Now we just need to keep pushing hard and pedaling as hard as we can to make sure that these systems improve and keep going forward.”

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News: Forest Peoples’ Rights Key To Reducing Emissions From Deforestation
ScienceDaily | 20 October 2008

Unless based on respect for the rights of indigenous peoples and forest communities, efforts by rich countries to combat climate change by funding reductions in deforestation in developing countries will fail, and could even unleash a devastating wave of forest loss, cultural destruction and civil conflict, warned a leading group of forestry and development experts at a recent meeting in Oslo.

Rights and Resources conference logo

The experts are gathering in Oslo with policymakers and community leaders for a conference on rights, forests and climate change. The conference was organized by two non-profit organisations, Rainforest Foundation Norway and the US-based Rights and Resources Initiative (RRI).

Speaking at the meeting, Norway’s Minister of Environment and International Development, Erik Solheim, says efforts towards reduced emissions from deforestation in developing countries should be based on the rights of indigenous peoples to the forests they depend on for their livelihoods, and provide tangible benefits consistent with their essential role in sustainable forest management.

“There are growing conflicts between indigenous peoples and both forestry companies and conservation organizations. Imposed forest management initiatives are only viable if they respect the customary rights of forest peoples and ensure they have control about what happens on their lands. Indigenous peoples must be accepted as full and fair participants in all climate negotiations,” — Joji Carino, Director of Tebtebba – Indigenous Peoples’ International Center for Policy Research and Education

Conference organizers worry that REDD could fuel corruption and provoke tensions and land grab situations unless good governance, policies and the rule of law are first put in place.

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Read the Rights, Forests and Climate Change meeting blog…

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Pay indigenous people to protect rainforests, conservation groups urge
The Guardian [UK] | 17 October 2008

From Exclusion to OwnershipRich countries should try to cut the greenhouse gas emissions caused by deforestation by first investing in the people who live and use forests, rather than relying on the financial carbon markets to encourage conservation, leading development experts have proposed.

If not, they risk unleashing a wave of land grabs, corruption, cultural destruction and civil conflict, said the Washington-based Rights and Resources Initiative, a coalition of of UN- and government-funded research organisations including the World Conservation Union and the Center for International Forestry Research (CIFOR).

A study by Jeffrey Hatcher, an analyst with Rights and Resources in Washington, found that it costs about $3.50 (£2) per hectare to recognise forest people’s land. The costs of protecting forests under Redd have been estimated as about £2,000 per hectare.

“There is lots of evidence from around the world that communities conserve their forests when their [land] rights are recognised. There are now about 400m hectares of forest formally owned by communities. These 400m hectares conserve about 20-40m Gigatonnes of CO2. This means that it costs about $1.6bn (£925m) to achieve this conservation. The Eliasch review suggested it would cost about $17bn year to to stop deforestation, which works out as far more expensive” — Jeffrey Hatcher, Rights and Resources

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Download the From Exclusion to Ownership? Challenges and Opportunities in Advancing Forest Tenure Reform July 2008 report [pdf]…

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Climate Change: Financing Global Forests [The Eliasch Review] 14 October 2008

Eliasch reviewThe Eliasch Review is an independent report prepared by Johan Eliasch, a businessman appointed by UK prime minister Gordon Brown to be his special adviser on forests, with the support of the Office of Climate Change. The Review aims to provide a comprehensive analysis of international financing to reduce forest loss and its associated impacts on climate change. It does so with particular reference to the international efforts to achieve a new global climate change agreement in Copenhagen at the end of 2009.

The Review focuses on the scale of finance required to produce significant reductions in forest carbon emissions, and the mechanisms that, if designed well, can achieve this effectively to help meet a global climate stabilisation target. It also examines how mechanisms to address forest loss can contribute to poverty reduction, as well as the importance of preserving other ecosystem services such as biodiversity and water services.

“Evidence suggests that ownership and control over forests by indigenous communities, within an appropriate framework of regulation and support, can limit deforestation. Local communities – through their local knowledge and expertise, their role in protecting forests from outside encroachment and a long-term commitment to their lands – often exercise superior conservation practices. However, policies skewed towards larger industrial interests disadvantage smaller and community-based enterprises and reduce their profitability; and large timber companies tend to receive a greater share of concessions… Governance of funds should be based on equitable participation by developed and developing countries and there should be early consultation on design of mechanisms with forest communities and indigenous peoples.” — Eliasch review

Download the executive summary of the report [pdf]…
Download the full Eliasch Review [pdf]…

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