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The experience of FLEGT Voluntary Partnership Agreements offer several lessons on how to design benefit sharing mechanisms under REDD+ so that they build credibility and trust among the potential recipients of REDD+ benefits. This paper focuses on lessons for three specific design aspects of REDD+ benefit-sharing mechanisms: (i) the balance between state and non-state actors in the architecture of benefit-sharing mechanism institutions; (ii) the role of civil society organizations (CSOs) in monitoring; and (iii) the design of multistakeholder processes. The choice and arrangement of institutions and actors is crucial for credibility: independence can be enhanced or reduced by the architecture of check and balance mechanisms and the type of actors involved. Lessons from VPAs also highlight the trade-off between the cost efficiency and capacity building gains of using existing (often state) institutions and actors versus the potential increased effectiveness and independence that may be provided by new and/or non-state institutions and actors. The use of civil society monitors and multistakeholder processes can provide credibility through enhancing accountability and transparency as well as increasing commitment and confidence in the system. The impact of civil society monitoring can be enhanced by formal recognition of its role, establishing complaints mechanisms and formalizing access to information. Multistakeholder processes can be strengthened by clarifying roles, responsibilities and decision-making mandates of the process; clarifying who should be included; accepting that such processes take time; and maintaining technical and financial support.
Where benefits and costs accrue at different scales, financial intermediaries are needed to facilitate relations between global-scale buyers and local-scale providers of carbon sequestration and storage. These intermediaries can help to collect and distribute payments and to promote the scheme to potential beneficiaries. The benefits distributed should compensate for the transaction, opportunity and implementation costs incurred by stakeholders for providing ecosystem services. Therefore, calculating the costs and understanding who incurs them are essential for benefit sharing. Targeting benefits according to a set of criteria that match the objectives of the specific mechanism increases the mechanism’s efficiency. As the level of performance-based payments may not be able to compete with the opportunity costs of highly profitable land uses, performance-related benefit-sharing mechanisms should be focused on areas with moderate opportunity costs. Benefits should be divided into upfront payments to cover startup costs and to give an initial incentive for participation, and payments upon delivery of ecosystem services to ensure adherence to conditionality.
The issue of REDD+ benefit sharing has captured the attention of policymakers and local communities because the success of REDD+ will depend greatly on the design and implementation of its benefit?sharing mechanism. Despite a large body of literature on potential benefit?sharing mechanisms for REDD+, the field has lacked global comparative analyses of national REDD+ policies and of the political?economic influences that can either enable or impede the mechanisms. Similarly, relatively few studies have investigated the political?economic principles underlying existing benefit?sharing policies and approaches. This working paper builds on a study of REDD+ policies in 13 countries to provide a global overview and up?to?date profile of benefit?sharing mechanisms for REDD+ and of the political?economic factors affecting their design and setting. Five types of benefit?sharing models relevant to REDD+ and natural resource management are used to create an organising framework for identifying what does and does not work and to examine the structure of rights under REDD+. The authors also consider the mechanisms in light of five prominent discourses on the question of who should benefit from REDD+ and, by viewing REDD+ through a 3E (effectiveness, efficiency, equity) lens, map out some of the associated risks for REDD+ outcomes. Existing benefit?sharing models and REDD+ projects have generated initial lessons for building REDD+ benefit?sharing mechanisms. However, the relevant policies in the 13 countries studied could lead to carbon ineffectiveness, cost inefficiency and inequity because of weak linkages to performance or results, unclear tenure and carbon rights, under?representation of certain actors, technical and financial issues related to the scope and scale of REDD+, potential elite capture and the possible negative side effects of the decentralisation of authority. Furthermore, the enabling factors for achieving 3E benefit?sharing mechanisms are largely absent from the study countries. Whether REDD+ can catalyse the necessary changes will depend in part on how the costs and benefits of REDD+ are shared, and whether the benefits are sufficient to affect a shift in entrenched behaviour and policies at all levels of government. The successful design and implementation of benefit?sharing mechanisms – and hence the legitimacy and acceptance of REDD+ – depend on having clear objectives, procedural equity and an inclusive process and on engaging in a rigorous analysis of the options for benefit sharing and their potential effects on beneficiaries and climate mitigation efforts.
Key lessons While the constitutional rights (e.g. property rights) of indigenous peoples (IP) are strong in Brazil and may help to overcome their vulnerability, they are rarely enforceable and do not offer sufficient safeguards.Informed consultation and a structured free, prior and informed consent (FPIC) process that considers cultural issues are fundamental to ensuring acceptance and consent by IP.Local environmental funds can be a tool for increasing autonomy and decentralization while sharing benefits with IP and financing long-term and specific demands that can change over time.Safeguard strategies implemented by the Amazon Fund to avoid conflicts of interest may result in restrictions on the participation of IP, having implications related to the legitimacy of decision-making in the distribution of benefits.The absence of timely financial flows to meet IP needs may be a considerable risk since it can encourage environmentally damaging activities.Relying on the voluntary market may be risky for IP initiatives because of market instability and possible lack of funding.
Vietnam is acknowledged to be REDD+ pioneer country, having adopted REDD+ in 2009. This paper is an updated version of Vietnam’s REDD+ Country Profile which was first published by CIFOR in 2012. Our findings show that forest cover has increased since 2012, but enhancing, or even maintaining, forest quality remains a challenge. Drivers of deforestation and degradation in Vietnam, including legal and illegal logging, conversion of forest for national development goals and commercial agriculture, weak law enforcement and weak governance, have persisted since 2012 up to 2017. However, with strong political commitment, the government has made significant progress in addressing major drivers, such as the expansion of hydropower plants and rubber plantations.Since 2012, Vietnam has also signed important international treaties and agreements on trade, such as Voluntary Partnership Agreements (VPAs) through the European Union’s (EU) Forest Law Enforcement. These new policies have enhanced the role of the forestry sector within the overall national economy and provided a strong legal framework and incentives for forestuser groups and government agencies to take part in forest protection and development. Nevertheless, new market rules and international trade patterns also pose significant challenges for Vietnam, where the domestic forestry sector is characterized by state-owned companies and a large number of domestic firms that struggle to comply with these new rules.The climate change policies, national REDD+ strategy and REDD+ institutional setting has been refined and revised over time. However, uncertain and complex international requirements on REDD+ and limited funding have weakened the government’s interest in and political commitment to REDD+. REDD+ policies in Vietnam have shown significant progress in terms of its monitoring, reporting and verification (MRV) systems, forest reference emission levels (FREL), and performance-based and benefit-sharing mechanisms by taking into account lessons learnt from its national Payment for Forest Environmental Services (PFES) Scheme. Evidence also shows increasing efforts of government and international communities to ground forestry policies in a participatory decision-making processes and the progress on developing safeguarding policies in Vietnam between 2012 and 2017 affirms the government’s interest in pursuing an equitable REDD+ implementation. Policy documents have fully recognized the need to give civil society organizations (CSOs) and ethnic groups political space and include them in decision making. Yet, participation remains token. Government provision for tenure security and carbon rights for local households are still being developed, with little progress since 2012.The effectiveness of REDD+ policies in addressing drivers of deforestation and degradation has not be proven, even though the revised NRAP has recently been approved. However, the fact that drivers of deforestation and degradation are outside of the forestry sector and have a strong link to national economic development goals points to an uneasy pathway for REDD+. The business case for REDD+ in Vietnam has not been proven, due to an uncertain carbon market, increasing requirements from donors and developed countries, and high transaction and implementation costs. Current efforts toward 3Es outcomes of REDD+ could be enhanced by stronger political commitment to addressing the drivers of deforestation from all sectors, broader changes in policy framework that create both incentives and disincentives for avoiding deforestation and degradation, cross-sectoral collaboration, and committed funding from both the government and developed countries.
Benefit sharing (BS) approaches in community forestry (CF) are differentiated into: rights allocation-based, input-based and performance-based, from initiation to implementation and each approach has specific and complementary roles in ensuring effectiveness, efficiency and equity of benefit sharing mechanisms (BSMs).
This brief focuses on lessons from the extractive resource sectors (oil, gas and mining) for REDD+ benefit-sharing. Specifically, it examines the different ways that revenues accruing to the government are distributed to subnational levels and the outcomes of different arrangements for doing so. These lessons are particularly relevant for scenarios where REDD+ revenues might reach significant volumes. Two main sorts of revenue would need to be distributed in the case of REDD+: i) payments to central or sub-national governments from international sources for emissions reduced and ii) taxes and fees collected by central government from REDD+ activities (Irawan et al. 2014). In both cases, decisions are needed on how to redistribute revenue between central and sub-national levels. A key concern in decisions over public revenues is allocation across jurisdictions. In this paper, we look at the rationales behind the way revenues from the sector are shared both with sub-national governments and across extractive and non-extractive localities. This experience is relevant for key questions facing REDD+ such as how to link benefit to performance at the sub-national levels, how to compensate costs, how to distribute benefits across a nation and how to enhance development outcomes. In so doing, we address key concerns in the debate about REDD+ benefit-sharing. These include how REDD+ might act as an incentive for reducing deforestation and degradation, and how it might also be integrated into development planning to help achieve wider outcomes.
In many countries, the state owns or manages forests in the national interests of economic development, ecosystem service provision or biodiversity conservation. A national approach to reducing deforestation and forest degradation and the enhancement of forest carbon stocks (REDD+) will thus most likely involve governmental entities at different governance levels from central to local. Sub-national governments that implement REDD+ activities will generate carbon ecosystem services and potentially other co-benefits, such as biodiversity conservation, and in the process incur implementation and opportunity costs for these actions. This occasional paper analyses the literature on ecological fiscal transfers (EFTs), with a focus on experiences in Brazil and Portugal, to draw lessons for how policy instruments for intergovernmental transfers can be designed in a national REDD+ benefit-sharing system. EFTs can be an effective policy instrument for improving revenue adequacy and fiscal equalization across a country. They facilitate financial allocations based on a sub-national government’s environmental performance, and could also partly compensate the costs of REDD+ implementation. We find that intergovernmental EFTs targeting sub-national public actors can be an important element of policy mix for REDD+ benefit sharing, particularly in a decentralized governance system, as decisions on forest and land use are being made at sub-national levels. Given the increasing focus and interest on jurisdictional REDD+, EFTs may have a role in filling the shortfall of revenues for REDD+ readiness and for implementing enabling actions related to forest governance. If EFTs are to have efficient and equitable outcomes, however, they will require strong information-sharing and transparency systems on environmental indicators and performance, and the disbursement and spending of EFT funds across all levels
Many environmental and social benefits will result from implementing activities to tackle emissions from deforestation and forest degradation and to promote the conservation of forest carbon stocks, as well as from the sustainable management of forests and carbon enhancements in developing countries (REDD+). Benefit sharing in REDD+ refers to the ways in which the financial benefits resulting from these activities will be distributed among different local stakeholders within a country. It is necessary to create ad hoc institutional frameworks and design equitable and transparent benefit sharing schemes such that the rewards may be distributed among all the many stakeholders within the country who have in some way participated in the achievements. This report presents a summary of the gaps and problems in the design of benefit sharing schemes, focusing particularly on the need to develop pro-poor schemes, and includes the Forest Dialogues' main recommendations and suggestions. An assessment of both the challenges and the potential paths for implementation is included in the example provided by the case of implementation of REDD+ in Mexico.