Legal & Institutional Structure REDDeX Discussion

14 July 2010

All numbers are draft and US$

14 July 2010

All numbers are draft and US$

2

Lets talk about..

Who• Intro Gurinder Tamber• What’s needed Jonathan Rotter• Where are we

– Multilateral Context Duncan Marsh– Indonesia Pak Wahjudi– Brazil Fernanda Carvalho– Sub-national Louis Blumberg

• Gap Analysis YOU guys!

3

Intro

• 3-stage evolution of the REDD sector – 1. “Readiness” activities – 2. Early implementation (EI) or the “the missing

middle” – 3. Ex -post pay for performance system

4

Readiness

Readiness Investments – public money[Eliasch suggests $4bn over 5 years for 40 countries]

Establishing national REDD+ Strategies

Developing a MRV system

Establishing a forest carbon inventory and national reference scenario

Institution and capacity building to support a national REDD+ system

Key players: FCPF, FIP, UN REDD

5

Early Implementation

Early Implementation Investments – public and some private players willing to risk capital to learn about the industry

Incentives to landholders to compensate for the opportunity cost of not clearing land

Financing mechanisms to expand and strengthen protected area systems

Identification and preparation of degraded land for productive use

Capital to promote LCDS as an alternative to traditional forest-based industries

Key players: FCPF, FIP, UN REDD

6

Payment for Performance (ex-post)

Payment for Performance - largely private money

-Project/sub-national crediting-Early action crediting- Nesting

- Route to market

- Long-term stable demand for credits

Key Players- Project developers, brokers, investment banks, funds, FCPF Carbon Fund, Amazon Fund, etc.

REDDeX 14 July 2010

Jonathan RotterThe Nature Conservancy

Legal & Institutional Frameworks: What’s Needed

Stages

Readiness Stage

• Legal Prerequisites– External (Multilateral or Bilateral)

• Grant Programs• Grant Agreement

– National • Proposal to create REDD+ Strategy

Readiness Stage

• Institutional Prerequisites– Multilateral Funder– Bilateral Funder– Designated National Focal Point and

Recipient/Responsible Institution

Early Implementation Stage

• Legal Prerequisites– External

• Grant Programs• Grant Agreement

– Internal• REDD+ Strategy• Conservative Accounting System• Basic monitoring, reporting & verification (MRV)

system

Early Implementation Stage

• Institutional Prerequisites– Multilateral or Bilateral Funder– International Observing/Clearinghouse Body?– Host Country Institution

Pay for Performance Stage

International Legal Prerequisites• International Emissions Trading Structure

• Oversight Authority• Offset Eligibility Requirements and Standards• Certification Process• MRV Requirements• International Registry

Pay for Performance Stage

National Legal Prerequisites• Internationally Accepted National Forest Carbon

Inventory and Reference Scenario• National Emissions Trading Structure

– Provisions for relationship to international market– Provision for Private and Subnational Actors– MRV Procedure– National Registry– Other enabling Provisions (e.g. for ownership &

delivery)

Pay for Performance Stage

• Institutional Prerequisites– International Institutional Arrangement

• COP or Other• High Level Body• Technical Advisory Bodies• Designated Reviewers and Accredited Certification

Bodies– Investor Country Regulatory Institution– Host Country Regulatory Institution

Thank you