Feasibility study on options to step up EU action against deforestation

Transcription

1 Feasibility study on options to step up EU action against deforestation Inventory of existing EU policies, legislation and initiatives addressing the of deforestation and forest FINAL REPORT Written by COWI A/S January 2018

2 Feasibility study on an EU Action Plan on deforestation Inventory of existing EU policies, legislation and initiatives addressing the of deforestation and forest FINAL REPORT Feasibility study on options to step up EU action against deforestation

3 4 EUROPE DIRECT is a service to help you find answers to your questions about the European Union Freephone number (*): (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you) LEGAL NOTICE The information and views set out in this study are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission's behalf may be held responsible for the use which may be made of the information contained therein. More information on the European Union is available on the Internet ( Luxembourg: Publications Office of the European Union, 2018 PDF ISBN doi: / KH EN-N European Union, 2018 Reproduction is authorised provided the source is acknowledged.

4 Feasibility studyon an EU Action Plan on deforestation Inventory CONTENTS 1 Introduction 3 2 Approach Identification of legislation, policies and initiatives Structure of the inventory Format of the inventory 7

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6 Feasibility studyon an EU Action Plan on deforestation Inventory 1. INTRODUCTION This inventory of existing EU policies, legislation and initiatives has been developed as part of the Feasibility study on an EU Action Plan on deforestation, whose overall aim is to define and assess policy options available to step up EU action on deforestation and forest (as per the European Commission s Terms of Reference). For more background on the study please refer to the main report.this report presents the result of Task 1 of the study. The aim of Task 1, as per the ToR, is to conduct a comprehensive mapping exercise of existing [and forthcoming] EU policy, legislation and initiatives that can address, directly or indirectly, the of deforestation and forest within and outside EU borders. The mapping exercise also covers selected Member State legislation, policy and initiatives and private sector initiatives. Section 2 of this report describes the approach used to identify and present the elements of the inventory. Detailed results are presented in a printable Word document that lists the full inventory (printable on A4). The inventory was prepared and completed as the first step of the study in It has not been further updated in the course of the study so the inventory reflects the state of play at the time of its completion (August 2016).

7 Feasibility studyon an EU Action Plan on deforestation Inventory 2. APPROACH This section explains approaches for identification of relevant legislation, policies and initiatives, as well as the structure of the inventory and the sectors covered. Lastly, the format of the inventory is explained, serving to help the user access and understand it. 2.1 Identification of legislation, policies and initiatives A set of five criteria were used to guide the identification of entries for the inventory: Connection with driver(s) of deforestation or forest Legislation, policies and initiatives should have a clear effect on one or more of deforestation or forest. In particular, the criteria considered the three key proximate : agricultural land, timber extraction, and infrastructure expansion 1 ; Connection to the EU Entries should be relevant to the EU (e.g. they are adopted by, apply in, or otherwise affect the EU or the Member States). At international level, the inventory also includes policies and initiatives by international s where the EU and Member States play an important role. For the private sector, key initiatives taken by EU actors are included (as are a few selected initiatives by non-eu actors that could influence EU impacts on global forests); Likely magnitude and timeliness of the impact Entries should have had a discernable direct or indirect impact on deforestation or forest, or be likely to have such an impact in the short- to medium-term; Complementarity The inventory aims to avoid the repetition that may derive from the identification of several similar entries. Both existing and forthcoming policies, legislation and initiatives were included. For the purposes of the mapping exercise, forthcoming has been defined as legislation, policies and initiatives that have been adopted but whose implementation has not yet started. (An example is Directive 2014/24/EU on public procurement, which entered into force in April 2016.) Consequently, legislation, policies and initiatives still in development or negotiation have not been included here. This includes the ESR and LULUCF proposals adopted by the EC in 2016 and the Energy Union Governance Regulation and the revised Renewable Energy Directive (RED II), which are included in the assessment in the Task 2 reports (Part I and II). Each entry is identified by a reference ID number. 2.2 Structure of the inventory The inventory has the following structure. The inventory is organised first by administrative level (international, EU and national levels) for public sector legislation, policies and initiatives; as well as for private sector initiatives. The overall structure is thus: International (public sector) legislation, policies and initiatives, focusing on international s and initiatives where the EU or its Member States are members EU (public sector) legislation, policies and initiatives 1 This is based on the taxonomy developed by Geist and Lambin, who identified these three proximate causes, which are in turn influenced by demographic, economic and other factors. Geist H. J. and Lambin E. F., Proximate causes and underlying driving forces of tropical deforestation, BioScience, Vol. 52, No. 2, 2002.

8 Feasibility studyon an EU Action Plan on deforestation Inventory National (public sector) legislation, policies and initiatives, focusing on EU Member States but also including key actions undertaken by countries in the European Economic Area and elsewhere appearing to have a strong impact in addressing deforestation have also been included. Private sector initiatives, such as certification systems, corporate commitments and privately funded programmes for forest protection. Public sector At the second level, public sector legislation, policies and initiatives are then organised by policy area. These include the 11 policy areas identified in the ToR: Agriculture and Fisheries Climate Change Common Commercial Policy Consumer Protection Development and International Cooperation Energy Environment EU and International Forest Policies (including FLEGT) Internal Market Sustainable Production and Consumption Trade and Investment The mapping was not limited to these 11 policy areas. The desk research identified instruments in the following additional policy areas: Cross-cutting 2 Research and innovation Cohesion Policy Each policy, legislative instrument or initiative was assigned to a single policy area; it is nonetheless recognised that many instruments touch on multiple areas. As an example, REDD+ initiatives 3, which have been set up under an approach developed as part of implementation of the UN Framework Convention on Climate Change (UNFCCC), were assigned to Climate as they protect forests as a mechanism to reduce greenhouse gas emissions. At the third level, the public sector international, EU and Member State entries are organised according to the three categories identified in the ToR: Regulatory (i.e. legislation): legally binding documents, including international agreements (at international level), EU directives and regulations and national law. Policy: Strategies, plans, guidelines, declarations and other documents issued by government bodies. While these are not legally binding, they may set out actions to be taken by government and private actions. Initiatives: Other actions, including programmes, funding mechanisms, partnerships 2 The EU Better Regulation policy was the only instrument identified for this category 3 Reducing emissions from deforestation and forest and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries: see

9 Feasibility studyon an EU Action Plan on deforestation Inventory Private sector The private sector initiatives are organised by the functional areas rather than policy area. The following functional areas were identified based on the initiatives identified: Certification systems, including those for forest products, agricultural products and biofuels/biomass Corporate social responsibility, including deforestation commitments as well as corporate roundtables and s focused on sustainability Carbon offset systems Information, accounting and tracking systems, which support private (and possibly public) commitments and actions regarding deforestation Private sector technical and financial assistance addressing deforestation and forest in developing countries, including NGO, private foundation and corporate initiatives. Completeness The inventory has sought to provide a list of all relevant EU legislation, policies and initiatives that meet the criteria. The inventory thus does not cover legislation, policies or initiatives that have do not have a clear link to the of deforestation and forest (examples of areas that were considered but not included are e.g.eu legislation on access to information, public participation and justice in environmental affairs and Member States regulations on product norms). At the same time, avoiding duplication is also a criterion for the inventory. In the area of EU trade and investment agreements, the inventory presents an overview, summary entry plus selected key examples of agreements. At national level, the inventory provides overviews of relevant legislation, policies and initiatives and lists key examples for some EU Member States. This is done in three key areas: requirements for biomass (related to the EU Renewable Energy Directive); green public procurement; and funds that support climate and environment projects at global scale. For each of these, an overview entry provides a summary, and specific examples follow. The review found many private sector activities that address deforestation and forest. Here too, rather than provide a long list the inventory presents an overview of main types of private sector initiatives and along with key examples. For example, for corporate commitments on deforestation, the key examples include commitments made by major global traders in agricultural commodities and major EU manufacturers, retailers and financial institutions, along with prominent examples from developing countries. 2.3 Format of the inventory The figure below on the following page illustrates the inventory. As shown in the figure, the following information is presented for each entry:, including reference number for EU legislation and policy documents A brief description The main bodies responsible for its A brief analysis of the mechanism by which the specific legislation, policy or initiative influences of deforestation or forest. For each entry, it is indicated whether the mechanisms have a direct or indirect

10 Feasibility studyon an EU Action Plan on deforestation Inventory influence. 4 It should be noted that this analysis does not refer to the relative strength of the entry (this will be reviewed in Task 2).. Where possible, these are drawn from recent evaluations. In some cases, third parties assessments are provided (e.g. NGO analyses of corporate action). In some cases, expert judgement has been used to present preliminary findings. As noted in section 1, the inventory provides information for the work of Task 2, the identification and assessment. 4 A direct influence is considered to be one that has an immediate impact in terms of primary of deforestation: agricultural expansion, infrastructure expansion and timber extraction. These actions typically directly affect forest areas. All other actions are considered to have an indirect influence.

11 TABLE OF CONTENTS CTRL + click on a heading to jump to inventory section INTERNATIONAL LEVEL... 3 Forest policy... 3 International development cooperation... 5 Climate... 6 Agriculture and fisheries International trade EUROPEAN UNION LEVEL Forest policy Environment Sustainable production and consumption Climate Energy Agriculture and fisheries International trade Finance Cohesion policy Internal market International development cooperation Research and innovation NATIONAL LEVEL Environment Climate Energy Internal market Page 1 of 103

12 Finance International trade PRIVATE SECTOR AND CIVIL SOCIETY Certification systems Corporate social responsibility Carbon offset systems Information, accounting and tracking systems Private sector technical assistance Private sector finance initiatives Page 2 of 103

13 INTERNATIONAL LEVEL Forest policy International Arrangement on Forests beyond 2015 Durban Declaration 2050 vision for forests and forestry New York Declaration on Forests (Climate Summit) Resolution 2007/40 of the Economic and Social Council: Non-legally binding instrument on all types of forests UN Forum on Forests 2015 FAO 2015 UN 2014 UN ECOSOC 2007 The arrangement continues UN bodies and actions on forests, including the UN Forestry Forum, the Collaborative Partnership on Forests and the Non-legally binding instrument on all types of forests. The Declaration states that forests and their sustainable management are fundamental for food security and improved livelihoods, a solution for climate change and that integrated approaches to land use are needed. A set of actions for implementation should be annexed. The New York Declaration on Forests is a voluntary and non-legally binding political declaration which grew out of dialogue among governments, companies and civil society, linked to the United Nations Secretary-General s Climate Summit held in New York in The Declaration pledges to halve the rate of deforestation by 2020, to end it by 2030, and to restore hundreds of millions of acres of degraded land. The governments of Germany, Norway and the United Kingdom of Great Britain and Northern Ireland issued a joint statement [2] strongly supporting the declaration, and committing to "strengthening existing and creating new partnerships with forest countries..." along with a financial commitment to fund up to 20 new programmes proposed by developing countries The instrument sets out four broad objectives, the first of which is to reverse the loss of forest cover worldwide; others are to enhance forest-based benefits, increase the area of protected forests and reverse the decline of ODA for forest management. Page 3 of 103 UN Forum on Forests, UN member states Not specified, but FAO is expected to report on follow-up. Governments, private sector and civil society called to take action. UN member states have the main responsibility for implementation, with the UN Forest Forum providing oversight. The Arrangement continues existing international cooperation via UNFF to support forest management. The Declaration calls for further actions.. By encouraging government policies and actions to protect forests (e.g. strengthen legal frameworks on forests, clarify land tenure systems, support producers in adopting better managing practices, green public procurement), the declaration can improve the policy and institutional factors which influence forest loss, in particular due to agricultural expansion and wood extraction. In addition, by fostering private sector commitments to reduce the impact of supply chains for key agricultural commodities (e.g. soy and palm oil) and related products (e.g. beef and paper), the declaration can shift demand towards more sustainable sources, and thus affect economic factors driving agricultural expansion and wood extraction at the expense of forests. The resolution calls for national measures, including forestry strategies, and international cooperation to strengthen forest management. Expert judgment: The arrangement's will depend on the of the various bodies and instruments it continues. Expert judgment: No information, declaration on recently presented, but will likely depend on other initiatives, such as SDG 15. Expert judgement: A recent policy statement that may influence action; however, no information on its impacts was found. A 2015 UN review of progress reported that national efforts at sustainable management, protected forest areas and ODA for forests had all increased. It is not clear, however, the extent to which

14 Support for sustainable forestry systems through FOREST EUROPE EU-FAO Forest Law Enforcement, Governance and Trade Programme Thematic programme on Forest Law Enforcement, governance and trade (TFLET) Forest Law Enforcement and Governance FLEG ForestEurope 1990 FAO (sponsored also by government of Sweden, EU) 2015 CITES 2006 World Bank 2001 FOREST EUROPE (the Ministerial Conference on the Protection of Forests in Europe) is the pan-european voluntary high-level political process for dialogue and cooperation on forest policies in Europe. It develops common strategies for its 47 signatories (46 European countries and the European Union) on how to protect and sustainably manage their forests. FOREST EUROPE has developed guidelines, criteria and indicators for sustainable forest management. FOREST EUROPE carries out monitoring, reporting and assessment of national strategies and efforts to implement sustainable forest systems. Forest Europe has also supported and provided input to EU policy measures, notably the EU forest strategy. The programme, now in its third phase ( ), supports projects in timberproducing countries and provides information and knowledge-sharing. Its goals are to address illegal logging, improve forest governance and promote trade in legally-source timber. With financing from the EU, Sweden and FAO, the Programme supports timber producing countries (VPA or not) to implement projects that target aspects of the EU FLEGT Action Plan. The third phase introduced new and extended support mechanisms, particularly directed to private sector stakeholders; support for civil society and government continues. The general objective of the Thematic Programme is to improve national forest law and governance in tropical ITTO member countries in order to enhance and diversify international trade in tropical timber from sustainably managed forests and to help alleviate poverty in those countries. FLET's projects and activities focus on four key areas: 1) Improving Forest Law Compliance and Governance. 2) Increasing Trade in Legally Produced Tropical Timber. 3) Enhancing Sustainable Livelihoods Through Sustainable Forest Management. 4) Strengthening International Cooperation. FLEG aims to tackle illegal forest activities in Partner Countries by promoting legal and sustainable forest management and utilisation practices and seeks to strengthen the rule of law and to enhance local livelihoods. Ministerial forest law and governance initiatives (first in Bali 2001) started more than a decade ago. Co-hosted by both producer and consumer governments and the World Bank, and in partnership with stakeholders from civil society and the private sector, these ministerial-level processes have aimed to mobilize international commitments from producer, consumer and donor governments to increase efforts to combat illegal logging as well as the associated trade and corruption in the forest sector. The focus has now shifted toward translating Page 4 of 103 Member states and other FOREST Europe members FOREST EUROPE secretariat Ministerial conferences take high-level decisions and commitments. EU, SIDA and FAO oversee the programme, which is implemented by FAO ITTO and CITES parties World Bank, IUCN and WWF, and partner countries FOREST Europe's work promotes sustainable forest management across Europe: this should support national efforts to reduce forest and deforestation. The initiative supports projects in forest countries, and provides information services to increase access to FLEGT targeting civil society, private sector s, and government institutions affected by various deforestation issues TFLET provides programme support to capacity building in sustainable forest management and conservation and improving national forest law in receiver countries thus contributing to reducing agriculture expansion, infrastructure extension and timber extraction. FLEG promotes cooperation to enhance law and governance in support of sustainable forest management and reducing illegal logging. the instrument itself has supported these results. Its objective to reverse the loss of forest cover is taken up by SDG 15 (which sets a 2020 target date). Expert judgement: An overall review or evaluation of Forest Europe's initiatives was not found. The mid-term evaluation of the second programme (2013) found it well-managed, with good achievement of outputs and outcomes, identified a need for private sector involvement and a more strategic approach at country level. The third programme appears to address these recommendations. No information found on. No information found on.

15 Global Forest Observation Initiative (GFOI) Collaborative Partnership on Forests (CPF) Group on Earth Observations (GEO) International development cooperation Sustainable Development Goals: Ending deforestation by 2020 United Nations Guiding Principles on Business and Human Rights ("Ruggie Principles") UN 2016 UN 2011 regional political commitment into projects and reforms at the regional and country levels. The World Bank is the lead implementing organization in partnership with IUCN and WWF. GFOI will support forest carbon tracking. Its five components are: methods and guidance; coordination of satellite data; capacity building to help countries use earth observation data for forest monitoring; research and development (not covered by GFOI's budget at present); and administration and coordination with stakeholders. CPF is an informal, voluntary mechanism among international s and secretariats with major programmes on forests, for their coordination and coherence. UN Sustainable Development Goals (SDGs), which entered effect in January 2016, include the ambitious target of ending deforestation by 2020 (SDG 15.2) and ensure sustainable consumption and production patterns (SDG 12) by achieving sustainable management and efficient use of natural resources by 2030 (SDG 12.2), promoting public procurement practices that are sustainable, in accordance with national policies and priorities (SDG 12.7) and ensuring that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature (SDG 12.8). SDG 13, to take urgent action to combat climate change and its impacts, could also support stronger forest management to reduce carbon emissions. The UN Guiding Principles on Business and Human Rights were proposed by UN Special Representative on business & human rights John Ruggie, and endorsed by the UN Human Rights Council in June In the same resolution, the UN Human Rights Council established the UN Working Group on business & human rights. The principles are the outcome of Implementing the United Nations Protect, Respect and Remedy Framework. (The principles do not specifically refer to forestry.) GEO is a voluntary partnership of governments and international s, which will carry out GFOI. CPF's member s UN member countries UN member states GFOI will provide information to support forest management, in particular for carbon. CPF helps to coordinate forestry issues in UN and related policy frameworks. It has studied issues such as finance for forests. The SDGs can encourage governments, multilateral s and private actors to undertake actions to improve institutional and policy factors causing deforestation, in particular those caused by infrastructure extension and timber extraction. The ambitious, internationally recognised targets may also influence cultural factors, as countries can clearly measure progress and citizens can hold institutions accountable. The Principles can influence deforestation by promoting and advancing human rights of indigenous peoples affected by deforestation. Agricultural expansion, infrastructure extension, and wood extraction projects may be slowed if exploitation of these peoples and their land is curbed. Information not found. GFOI is a support measure for international and national initiatives that address deforestation and forest. The CPF reports that it has helped to coordinate the work of its members, leading to greater efficiency and. CPF's framework found that the body was useful but needed further internal rules and the identification of priority objectives. Expert judgment: The SDGs provide targets for governments and other actors to meet via legislation, policies and initiatives. As the SDGs have only recently been established, it is early to assess their. No information found on. Nonetheless, NGOs such as the Business and Human Rights Resource Centre have cited the principles in highlighting cases where business actions have led to deforestation and affected human rights. Page 5 of 103

16 13 13 Climate 14 United Nations Declaration on the Rights of Indigenous Peoples REDD+ (Reducing Emissions from Deforestation and forest Degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries) UN 2007 UN 2013 (building on prior actions from 2005 on) United Nations Declaration on the Rights of Indigenous Peoples affirms the rights of indigenous peoples, including their rights to their lands, territories and resources. UN DRIP can serve as a way for indigenous groups to assert their rights to the use of ancestral lands, including preventing eviction and/or deforestation of the areas. REDD+ is a multilateral effort to create a financial value for the carbon stored in forests, offering incentives for developing countries to reduce emissions from forested lands and invest in low-carbon paths to sustainable development. "REDD+" builds on the previous REDD framework for deforestation and forest to include conservation, sustainable management of forests and enhancement of forest carbon stocks. REDD+ was first introduced into the COP agenda at its eleventh session in Montreal. The Warsaw Framework was approved at COP19 in Warsaw (2013). The Warsaw Framework, together with decisions at previous COPs, provides the overall framework for REDD+. Decisions in Warsaw take forward financing (including via the Green Climate Fund, GCF, established at COP-17 under UNFCCC), transparency and safeguards, national forest monitoring, and international verification of REDD+ activities. See UN-REDD, FCPF and NICFI as examples of multilateral and bilateral actions. Most REDD+ activities or projects implemented since the call for demonstration activities in Decision 2/CP.13 December 2007[8] have been focused on readiness (i.e. "Readiness phase"). Page 6 of 103 UN member states The REDD+ framework was approved by the Parties to the UNFCCC. REDD+ initiatives are carried out by Parties at national level. There is a substantial number of REDD+ multilateral and bilateral projects/programs including UN REDD, the Forest Carbon Partnership Facility and Norway s International Climate and Forest Initiative. Verification is an independent, external process, managed by the UNFCCC Secretariat. Cultural factors may be affected as awareness for indigenous peoples rises, and policy and institutional factors may change to reflect this. The Declaration can influence deforestation through promoting and advancing indigenous peoples rights to land and resources. Agricultural expansion, infrastructure extension, and wood extraction projects may be slowed if exploitation of these peoples and their land is curbed. Cultural factors may be affected as awareness for indigenous peoples rises, and policy and institutional factors may change to reflect this. The UNFCCC framework for REDD+ provides the overall mechanism for creating financial value for the carbon stored in forests, thereby providing economic incentives to keep trees standing. The framework thus creates an economic factor (opportunity cost) that can limit the of deforestation and forest, notably agricultural expansion, infrastructure extension and timber extraction. This includes initiatives such as performance-based payments for good forest management. REDD+ also addresses policy and institutional factors, as existing policy and management should aim to preserve forest carbon. Additionally, REDD+ can influence cultural factors (particularly beliefs about the value of forests) and the structure of EU demand, thus further help preserve forests. No information found on. In general, will depend on the international and national initiatives under the REDD+ Framework. On the one hand, REDD+ initiatives and projects show that putting an opportunity cost on forest clearing influences investors and landowners land use decisions, mitigating the economic of deforestation and forest. As REDD+ promotes capacity development (monitoring, technical assistance etc.), it also addresses the political and institutional factors. On the other hand, Ochieng et al. (2016) show that although countries have started developing technical methods for Monitoring, Reporting and Verification (MRV), they are yet to develop the competence necessary to administer MRV

17 and to inculcate good governance in MRV. In addition, CIFOR (2014) highlight that most direct interventions aim to reduce forest rather than deforestation, and that interventions rarely make explicit linkages to of deforestation and forest. Potential: According to CIFOR (2014), the MRV systems should be set up to monitor of policy interventions going beyond detecting deforestation and include other land uses such as agricultural and infrastructure expansion. Ochieng et al. (2016) also see a need for more transparency, accountability and coordination in MRV to ensure equitable distribution of REDD+ payments. If these challenges can be overcome, REDD+ projects will become more effective in addressing of deforestation and forest. 15 UN-REDD Program (contributing to the implementation of REDD+) UN 2007 The UN-REDD Programme is the United Nations collaborative initiative on REDD+, created in response to the UNFCCC decisions. The Programme supports national REDD+ readiness efforts in partner countries spanning Africa, Asia-Pacific and Latin America, in two ways: (i) direct support to the design and implementation of UN-REDD National Programmes; and (ii) complementary support to national REDD+ action through common approaches, analyses, methodologies, tools, data and best practices. By March 2014 the Programme counted 49 participants, 18 of which are receiving financial support to kick start or complement a variety of national REDD+ readiness activities Implementation is done by developing countries with support of the UN-REDD program.verification is managed by the Secretariat to the UNFCCC; countries need to facilitate the requirements of verification. The UN-REDD Program provides implementation support to create financial value for the carbon stored in forests. Support for REDD+ increases the of the measure (outlined above), primarily by addressing economic factors inhibiting implementation. By offering support policy and institutional factors can be modified to accept the changes of REDD+, while financial support diminishes the opportunity cost associated with implementation According to the 2014 external evaluation the UN-REDD Programme is effective in terms of producing key outputs, and progress towards outcomes is improving: "achievements are being made in terms of forest monitoring, reporting and verification (MRV), stakeholder engagement, and the development of national REDD+ governance systems". However, outcomes such as Page 7 of 103

18 Forest Carbon Partnership Facility (contributing to the implementation of REDD+) Green Climate Fund (GCF) REDD+ funding strategy REDD+ Forest Investment Program (FIP) (contributing to the implementation of REDD+) World Bank 2007 GCF/UNFCCC 2015 Climate Investment Funds (ADB, EBRD, IDB, WB) 2008 The Forest Carbon Partnership Facility (FCPF) is a World Bank programme and consists of a Readiness Fund and a Carbon Fund. The Readiness Fund supports tropical and sub-tropical developing countries in preparing themselves to participate in a system of positive incentives for REDD+. Countries that have made significant progress in their REDD+ readiness endeavours may be selected to participate in the Carbon Fund, through which the FCPF will pilot incentive payments for REDD+ policies and measures. The GCF finances activities to both enable and support adaptation, mitigation, technology development and transfer, capacity-building and the preparation of national reports (including for REDD+ activities). REDD+ projects as well as sustainable forestry management and forest restoration activities are becoming an important funding destination. The $8.3 billion Climate Investment Funds (CIF) provide 72 developing and middle income countries with resources to manage the challenges of climate change and reduce their greenhouse gas emissions. The Forest Investment Program (FIP) contributes to developing countries capacities to implement actions to reduce their emissions from deforestation and forest Implementation is done by developing countries with support of the World Bank Verification is managed by the Secretariat to the UNFCCC. The GCF is an operating entity of the UNFCCC s financial mechanism. Recipient countries can submit funding proposal through National Designated Authorities (NDAs). Multilateral development banks (ADB, EBRD, IDB, WB) provide funding for REDD+. Projects to be undertaken by recipient countries. (economic factor). The Facility provides implementation support to countries preparing to adopt REDD+ and create financial value for the carbon stored in forests. Additional support for REDD+ increases the of the measure (outlined above), primarily by addressing economic factors inhibiting implementation. This measure offers support for the modification of policy and institutional factors so as to improve the uptake of REDD+, while financial support diminishes the opportunity cost associated with implementation (economic factor). By supporting REDD+, the fund helps to create financial value for the carbon stored in forests, thereby providing economic incentives to keep trees standing. The funding thus creates an economic factor (opportunity cost) that can limit the of deforestation and forest, notably agricultural expansion, infrastructure extension and timber extraction. FIP provides implementation support to countries preparing to adopt REDD+ and create financial value for the carbon stored in forests. institutional capacity and reform are lagging. The authors rate the delivery of outputs as moderately satisfactory and of programme as moderately unsatisfactory. According to the first Program Evaluation, from , the FCPF has made significant progress in meeting 2 of its 4 objectives (building in-country capacity and disseminating lessons learned in readiness), but less on the two (piloting a performance-based system of payments; enhancing livelihoods & conserving biodiversity). FCPF has raised in-country awareness, understanding, capacity and skills around REDD+. As the GCF is only operational since 2015, no explicit judgement on can be made. Potential: If the GCF can secure adequate and sustained funding and if it finds effective ways to harness the expertise and capacities of the private sector in its operationalisation, the GCF could become one of the largest and most effective funding mechanisms to address the of deforestation and forest. Key findings from the World Bank evaluation (2014) are that FIP has improved policy and regulation on sustainable forestry and built national Page 8 of 103

19 BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL) REDD Early Movers (REM) Germany s International Climate Initiative (ICI) World Bank (Contributing countries: Germany, Norway, UK, US) BMZ, GIZ, KfW (Germany) German Federal Ministry for the (REDD+); principles include country ownership and coordination with other REDD+ mechanism. FIP provides grants and low-interest loans, channelled through partner multilateral development banks. the Forest Investment Program (FIP) provides $787 million of direct investments in forestry making it the world's largest source of REDD+ Phase 2 funding. The BioCarbon Fund is a multilateral fund supported by donor governments and managed by the World Bank. It seeks to promote reduced greenhouse gas emissions from the land sector, from deforestation and forest in developing countries (REDD+), and from sustainable agriculture, as well as smarter land-use planning, policies and practices. The Fund seeks to work with private sectors actors, including international corporations as well as national actors, SMEs and smallholders. The Fund provides two types of financing: 1. Grant funding and technical assistance for REDD+ and creation of enabling environments that change the way land-use decisions are made (BioCFplus). 2. Result-based payments for achieved emission reductions (BioCarbon Fund) Total funding of the BioCarbon Fund at the end of 2015 totalled almost $355 million The REM programme promotes forest conservation and is designed to strengthen performance-based payments for demonstrated emission reductions. It also provides accessible bridging finance for countries which have already taken independent action towards mitigating climate change. It aims to assist in closing funding gaps and actively counter the frustrations of particularly engaged partner countries (Early Movers) related to the pace of the current REDD process. The International Climate Initiative (ICI) finances climate projects in developing and newly industrialised countries, as well as countries in transition economies. One of ICI four primary funding destinations is the conservation of World Bank and developing country applicants. BMZ, GIZ and KfW together with developing country applicants. The design of a monitoring system is the responsibility of the applicant country or jurisdiction. Through REM's eligibility criteria, the applicant has to justify its approach which is then analysed in dialogue with REM and checked according to best practice criteria. All funding decisions on projects are made by the BMU. The ICI works closely with Additional support for REDD+ increases the of the measure (outlined above), primarily by addressing economic factors inhibiting implementation. This measure offers support for the modification of policy and institutional factors so as to improve the uptake of REDD+, while financial support diminishes the opportunity cost associated with implementation (economic factor). The Fund provides implementation support to countries preparing to adopt REDD+ and create financial value for the carbon stored in forests. Additional support for REDD+ increases the of the measure (outlined above), primarily by addressing economic factors inhibiting implementation. This measure offers support for the modification of policy and institutional factors so as to improve the uptake of REDD+, while financial support diminishes the opportunity cost associated with implementation (economic factor). By supporting REDD+, the fund helps to create financial value for the carbon stored in forests, thereby providing economic incentives to keep trees standing. The funding thus creates an economic factor (opportunity cost) that can limit the of deforestation and forest, notably agricultural expansion, infrastructure extension and timber extraction. The ICI provides implementation support to countries preparing to adopt REDD+ and create financial REDD+ planning processes; however, it has not covered transformational change sufficiently and half of investments do not address of deforestation. Expert judgment: the fund is relatively new, and information was not found on. In 2012, the REM was capitalised with a total of approximately US$45 Million. As little literature exists, no explicit statement can be made on its. Potential: If the currently growing funding is sustained by the German government, REM is a promising example of good bilateral action to address the of deforestation and forest. According to an evaluation of the BMU from 2013, individual projects from 2008 and 2009 Page 9 of 103

20 Environment, Nature Conservation and Nuclear Safety (BMU). 22 The Bonn Challenge IUCN DC African Forest Landscape Restoration Initiative (AFR 100) WRI natural carbon sinks with a focus on REDD+, particularly the implementation of national REDD+ strategies. In addition to its focus on REDD+, the IKI finances activities aimed at emissions reductions and carbon sequestration in other ecosystems not covered by the REDD+ mechanism, for example marshes, boreal forests and savannahs. The Bonn Challenge is a global aspiration to restore 150 million hectares of the world s deforested and degraded lands by 2020 and 350 million hectares by It was launched by world leaders at a ministerial roundtable in Bonn, Germany, in September Underlying the Bonn Challenge is the forest landscape restoration approach, which aims to restore ecological integrity at the same time as improving human wellbeing through multi-functional landscapes. The Bonn Challenge is not a new global commitment but rather a practical means of realizing many existing international commitments, including the CBD Aichi Target 15, the UNFCCC REDD+ goal, and the Rio+20 land neutral goal. AFR100 (the African Forest Landscape Restoration Initiative) is a country-led effort to restore 100 million hectares of land in Africa by The initiative launched formally at COP 21 in Paris will support the Bonn Challenge, a global commitment to restore 150 million hectares of land around the world by 2020, the New York Declaration on Forests that builds on and extends the Bonn Challenge to 350 million hectares by 2030 and the African Resilient Landscapes Initiative (ARLI), an initiative to promote integrated landscape management with the goal of adapting to and mitigating climate change. The German Ministry for Economic Cooperation and Development (BMZ) has joined forces with World Resources Institute (WRI) by providing initial funding to support an African-led initiative to restore millions of hectares of degraded forest GIZ and KfW, two s contracted by the German government to perform development cooperation tasks. IUCN leads the initiative. Any institution that manages land, be it academic, NGO, civil society, investors, businesses, educator etc. can get involved. National governments, regional institutions, public and private sector partners and international development programs can apply to restore productivity to deforested and degraded landscapes in order to improve livelihoods. value for the carbon stored in forests. Additional support for REDD+ and other such activities increases the of the measure (outlined in the REDD+ measure), primarily by addressing economic factors inhibiting implementation. This measure offers support for the modification of policy and institutional factors so as to improve the uptake of REDD+, while financial support diminishes the opportunity cost associated with implementation (economic factor). The Bonn Challenge encourages organizations to commit to restoring the world s deforested and degraded lands. In this way, the measure acts on policy and institutional factors, providing a framework for, and political encouragement to, activities that contribute to reverting the negative impacts of deforestation and forest, notably from agricultural expansion and wood extraction. The AFR 100 encourages organizations to restore Africa s deforested and degraded lands. In this way, the measure acts on policy and institutional factors, providing a framework for, and political encouragement to, activities that contribute to reverting the negative impacts of deforestation and forest, notably from agricultural expansion and wood extraction. were predominantly positive. The projects contributed significantly to climate change mitigation, improving adaptability or preservation of forests and biodiversity. Furthermore, a number of particularly innovative flagship projects generated high visibility in the partner countries and/or in the international dialogue on the climate issue. However, according to the expert team, ICI does not seem to address of deforestation and forest sufficiently as it primarily focuses on climate change mitigation through carbon sequestration. Therefore, its in addressing such is considered low. From the goal to restore 150 million hectares by 2020, already hectares have been restored, showing that the initiative is effective. From the goal of 100 million hectares by 2030, already 41 million hectares have been restored, showing that the initiative is effective in addressing deforestation and forest. Page 10 of 103

21 24 ARBARO FUND European Investment Bank (EIB) 2015 lands. A fund contributing to rural development and combating climate change by investing in sustainable forestry. The Fund will invest in sustainable forestry projects, combating the impact of climate change by protecting soils and sequestering carbon on the one hand, and supporting the socio-economic development in rural areas on the other. Specifically, it will invest in timber production and development of local forestry enterprises across four regional clusters, i.e. Africa, Latin America, Europe and China. Finance in Motion GmbH/ UNIQUE forestry and land use GmbH. The EIB the promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement. The Fund supports sustainable forestry in several countries where levels of deforestation and forest remain high, thus supporting the uptake of more sustainable forest management practices (technical factor), which can help reduce deforestation and forest from wood extraction. The finance volume is USD 200 million. The fund is relatively new, and explicit information on its was not found. From its description, the fund seems to not only address of deforestation and forest but also promote rural development through timber production. As these might be conflicting targets, the fund s in addressing can be disputed. 18 Agriculture and fisheries As the Guidance document has only recently been published, no information or evidence on the exists. The Guidance intends to help enterprises observe existing standards for RBC along agricultural supply chains. Providing guidance to enterprises involved in 25 agricultural supply chains on how to observe existing responsible business Potential: conduct (RBC) standards is essential to prevent adverse impacts and ensure Implementation and To the extent that these that agricultural investments benefit enterprises, governments and communities lie with the actors These Guidelines, if followed, could guidelines are followed and and contribute to sustainable development. The range of enterprises targeted by that adhere to these Guidelines. support more sustainable practices widely used, they could have New FAO/OECD this Guidance for Responsible Agricultural Supply Chains includes enterprises However, the Guidance by corporations, including via their an impact on deforestation and guidelines: Guidance for directly involved in agricultural production, such as small-scale producers, as well document contains provisions supply chains. Depending on where of these, specifically as responsible supply as other actors involved through business relationships, such as investment on how to implement and FAO/OECD in the supply chain these actors are agricultural supply chains are chains and Principles for funds, sovereign wealth funds or banks (from Guidance document 5 ). monitor the Guidelines, active (upstream producers vs major of deforestation. Responsible Investment The Guidance contains specific provisions on Tenure rights over and access to including consulting traders and retailers), it would This is especially the case if in Agriculture natural resources, Environmental protection and sustainable use of natural stakeholders and coordinating address different of the provisions under article 8 resources and Governance. According to these, actors engaged in agricultural with e.g. local and central deforestation on Environmental protection supply chains acknowledge and respect tenure holders, maintains environmental governments, international and sustainable use of natural management systems, and seeks to ensure the sustainable use of natural s, and civil society. resources are followed, resources, among other things. notably those on ensuring sustainable use of natural resources and supporting and conserving ecosystem services 26 Guidelines for FAO 2014 The objective of the Principles is to promote responsible investment in agriculture In accordance with the The Guidelines refers to the four No evidence of the Guidelines 5 OECD/FAO (2016) OECD-FAO Guidance for Responsible Agricultural Supply Chains. Page 11 of 103