1 Participación del Sector Privado en Proyectos REDD Dr Charlotte Streck Ciudad de Panamá, 23 Abril 2008 “Reducing Emissions from Deforestation and Degradation (REDD): complement of the Future Climate Change Regime”

2 REDD: Key Assumptions Scientific basis more robust Political will to address the problem of GHG emissions from deforestation Acknowledgement of the opportunity provided by the carbon market Private financing necessary to mobilize the required amount of funding Acknowledgement of country specific circumstances Need to involve local and indigenous communities

3 REDD: Key Questions Provided that negotiators agree…on non-regret targets for forest nations: –Is there such a thing as non-regret national targets for Non- AnnexI countries? Would they work? –How would liabilities resulting from any REDD transaction be allocated? Provided that negotiators agree on a carbon credit based approach… –Will there be sufficient and sustained demand? Are Governments indeed –The owner of carbon credits resulting from REDD activities (in the absence of any authorizing and expropriating law)? –Able to manage the fiscal insecurities resulting from a credit based incentive scheme

4 Cooperative Framework Governments: often (not always) challenged in implementation capacity, weak enforcement, tendency to over-regulate Public subnational actors: often closer to the problem and to the solution, relationship to central government varies, need for direct incentives Private sector: needs framework and guidance, strong implementation capacity Needed: Improved national policies and capacities Improvement of forestry laws, management practices, enforcement, land planning and zoning, data collection Increased availability of funding Establishment of enabling frameworks without getting lost in details Empowerment of local actors

5 Role of the public sector Forest Law and policy Formulating of strategic objectives Adoption of laws Enforcement of laws National REDD Activities Data collection Accounting for Emissions Administration of credits or other incentives Financing and implementation Financing of government policies Enactment of support schemes Programme implementatio National Government Forest Law and policy Local Governments Municipalities Communities

6 Role of the private sector Investor in REDD programmes and projects Purchaser of carbon credits Investor in land-use, infrastructure, Speculation Local land owners incl indigenous communities Funding from the sale of carbon credits: Speculative or future compliance buyers Private and government Payment on delivery Government mobilizes funds through: “REDD fee” levied on infrastructure investments Government sales of high valuable land Receive payment or other Incentives to encourage alternative land-use: Local incentive schemes Implementation of REDD programmes Poverty alleviation programmes Investment into programmes: Complement public funding Provide bridge financing Incentive: carbon re- venue or alternative schemes

7 Local Communities The success of any REDD activitie will depend on the succesfull implementation on the ground National and local circumstances need to be taken into account Land owners Local & Indigenous communities Key to success: Local support

8 DEMAND Uncertain international environment Post Kyoto deal earliest in 2009 EU ETS Severe restrictions on the use of international credits US Market Promising signals, but reluctance to embrace CDM or other intl offsets Carbon Market Drivers: Demand

9 Carbon Market Drivers: Supply SUPPLY Uncertain international environment Post Kyoto deal earliest in 2009 Role of Emerging Economies under a Post – Kyoto Deal, Role of China, India etc unclear New sources of supply PoAs, REDD Sectoral Agreements

10 Case Study: Changuinola I AES develops the hydropower project Changuinola I in Bocas del Toro Involves the construction of a large dam and the resettlement of indigenous coummunities EIA approved with compensation and mitigating measures (social services) Project located Bosque Protector Palo Seco (BPPS), a protected area under ANAM management

11 Case Study: Changuinola I AES and ANAM have agreed that 20% of all carbon revenues will be contributed to the implementation of an environmental management plan for BPPS Establishment of a tripartite committee (community, government, AES) that manages the implementation of a fund that benefits the management of the protected area

12 ¿Preguntas? Questions? Charlotte Streck Oficina Celular