2.3 Benefit Sharing and REDD+ Considerations and Options for Equitable and Effective Arrangements Tom Blomley Consultant to FCMC

What is benefit sharing in REDD+ ? Rationale and basis for benefit sharing Examples and models of benefit sharing arrangements (good and bad) Vertical and horizontal benefit sharing dimensions Key steps in the design and development of a Benefit Sharing System Monitoring, oversight and governance of benefit sharing arrangements 2 Session outline

3 What is benefit sharing? Series of institutional and contractual arrangements under which the value arising from a REDD transaction is divided amongst parties to the transaction. Benefits from REDD+ can be many Tendency to focus on carbon benefits (translated into cash payments) But: “Co-benefits” may include other (more important) benefits” – eg: Improved tenure and rights Improved forests Improved livelihoods Improved biodiversity

Can you think of how benefits are shared from any kind REDD+ project or natural resource management programme – what forms the basis or rationale for sharing of those benefits? 4 Rationale and basis for benefit sharing in REDD+

Benefits go to those with clear rights to land and clear tenure Benefits go to those who are good stewards of lands and forests Benefits go to those incurring greatest costs (transaction, opportunity costs) Benefits go to those who achieve greatest reductions in deforestation and forest degradation - outputs Benefits go to those who put most in (effort related to forest management) – inputs Benefits go to those who are poorest and most marginalised 5 Rationale and basis for benefit sharing in REDD+

Example from Tanzania: Tanzania Forest Conservation Group and MJUMITA REDD+ Pilot project – working in Lindi and Kilosa districts Communities develop land use plans, establish community forests, bylaws and undertake patrols Payments are made to communities based on externally verified reductions in deforestation / forest degradation Payments made to all men, women and children – equal basis Communities determine if and how much goes into village account for community investments (schools, clinics, mosques) Children receive payments – through their mothers Pros: Builds accountability, ensures wide participation and awareness, builds local support, popular among local residents Cons: All residents were paid the same amount, regardless of their actual actions and costs. 6 Rationale and basis for benefit sharing in REDD+

Channels cash to specific purposes –Funds may be invested, used to purchase goods and services, or distributed in cash to public or private beneficiaries based on specific policies or criteria. Funds subject to specific allocation policies and governed by a board Under national approaches, countries will receive payments based on reduction in D&D. Fund-based model most likely approach Works best where there is strong governance and high levels of transparency 7 Managed Fund (REDD+ Fund)

Forest Carbon Trust Fund, Nepal Pilot initiative, funded by Norwegian govt and implemented by NGOs Focus on performance based payments to community forestry groups Payments based on: 40% of the payment : verified reduction in deforestation & increase in carbon stocks. 25% of the payment : the presence of Indigenous Peoples and low-caste households (dalits) as registered members of the user group. 15% of the payment : the presence of women members in the user group 20% of the payment : recorded poverty levels in the participating community. First pilot payment made to all 105 user groups in 2012, totaling $96,000. Fund overseen by government and civil society Third party verification of ER and carbon stocks Guidelines developed through participatory process 8 Managed Fund (REDD+ Fund) – Example

Typically private contract between investor/donor and landowner or resource manager Contract specifies an activity to be performed or refrained from in exchange for a defined benefit, usually cash. –E.g. Payments for ecosystem services (PES) – water, biodiversity Benefits based on level of effort (input) or results (output) –E.g. number of new trees planted; ha of forest conserved Eligibility criteria: demonstrate right to manage a resource or land. –Illegal logging, disputed tenure rights, unclear carbon rights (depending on the national context) may complicate 9 Payments for Services

Tanzania – PWS Scheme Buyers: DAWASA and Coca Cola Sellers: Farmers living high in the catchment of the Ruvu River Based on inputs – area of land under improved agriculture (soil and water conservation) Worked well, although issues of scale and impact – willingness to buy vs CSR Equity – efficiency trade-offs 10 Payments for Services – an example

11 Vertical and Horizontal Benefit Sharing

Step 1: Clarify objective(s) and determine the scope of benefits –Clarify objective(s) of REDD+ program and benefit sharing component –Clarify rationale for sharing of benefits (criteria) –Determine the appropriate scale to channel benefits Step 2: Identify beneficiaries –Scope –Eligibility criteria 12 Four steps to design benefit sharing system Possible eligibility criteria options:  Tenure rights: statutory and customary  Carbon rights  Revenue sharing rules  Poverty rate  Social needs and priorities  Cultural rights  Ecological/biodiversity values  Ability to deliver emissions reductions/removal credits.  Agreement to measure, monitor, report, and/or verify results.  Capacity to govern

Step 3: Determine the structure and types of benefits –Cash and/or non-cash benefits –Timing of payments –New or existing mechanism –Decide on model - eg: Contract/PES, Managed fund Step 4: Determine governance and oversight arrangements 13 Four steps to designing benefit sharing system

Specifying measures / requirements for local level (to avoid elite capture) Ensuring multi-stakeholder oversight committee Ensuring benefit sharing guidelines are developed in participatory manner Establishing independent grievance and redress mechanism Making all information publicly available (guidelines, financial reports, audits, disbursements) Independent reviews of performance (e.g: social accountability monitoring) 14 Governance arrangements and oversight

Thank you! Tom Blomley

16 Group exercise From your own countries, think through existing models of benefit sharing in natural resource management (from REDD+, collaborative forest management, community wildlife management, revenue sharing from protected area perhaps) Describe and note down: The initiative (sector, level of scale) Basis for sharing payments (criteria for sharing) (performance- based, poverty, etc) What kind of benefits are provided How the system is governed and what measures exist for transparency Strengths of the system Weaknesses of the system