indigenous custodians of forests and the promotion of a green economy. forestry sector that has never marketed

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1 4 November 2011 REDD+Update Executive Summary REDD (Reducing Emissions from Deforestation and Forest Degradation) is an innovative mechanism emerging from the climate debate. It aims to halt and reverse global deforestation by using a market-based or funded mechanism to place a financial value on carbon sequestered in the forests of developing countries. REDD has come a long way since the Bali Conference of the Parties of 2007(COP 13) andhas evolved into REDD+ with five components: avoiding deforestation, avoiding degradation, carbon stock enhancement, conservation of forest carbon stock and sustainable forest management. The Cancun Agreement calls for REDD's implementation in three phases: preparatory, pilot and implementation, but countries are already moving ahead on their REDD programmes without waiting for the final agreement. Pakistan faces a high rate of deforestation and views REDD+ as a viable option to reverse this dismal trend. Active engagement in REDD is a unique opportunity to support this national priority. However this must be driven by a focused national plan and supported by scaled up human and technical capacity,based on a REDD 'readiness' exercise. REDD: the promising frontier According to the Fourth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), deforestation accounts for 17% of global carbon emissions. The REDD concept extends a simple solution: performance-based payments for forest owners and users to arrest and reverse deforestation. The addition of carbon stock enhancement, conservation of forest carbon stock and sustainable forest management to create REDD+promises wider benefits, such as biodiversity protection, income for indigenous custodians of forests and the promotion of a green economy. The challenge, however, lies in the details. Transforming this concept into a reality means confronting complex and unresolved issues in areas where capacity is limited. This is new territory fora forestry sector that has never marketed forest carbon. Authors Malik Amin Aslam Khan Climate Change Expert Syed Mahmood Nasir IG Forest REDD was first proposed to the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in Montreal at COP 11 in 2005 by Costa Rica and Papua New Guinea on behalf of the Coalition for Rainforest Nations. Today, REDD+ has a growing support base in climate change negotiations and is progressing along two tracks: the UN negotiations track and the REDD readiness tracks. REDD+ in UN negotiations Discussions in the UNFCCC negotiations track take place within the Ad-Hoc Working Group on Long Term Cooperative Action (AWG-LCA) established at COP 13 in Bali to provide a structured negotiations platform for a post-2012 climate framework. Before Cancun in 2010, REDD+ was described as oven ready and was elaborated in clauses 68 to 78 of the Cancun Agreement document 1.CP/16. There is now consensus on operationalization in three phases: Readiness phase ( ):? enacting national strategies supported by capacity building Pilot (or Investments)phase:? learning by doing through pilot projects. This is underway in some? Policy Brief November 2011

2 countries before the enactment of international rules. Implementation (or Operations) phase ( ): performance-based payments made either by direct funding or links to the global carbon market, leading to global implementation. However, many issues remain unresolved: Uniform application and accountability: These are not yet in place. A REDD goal: REDD aims to reduce global deforestation, but by how much, and by when? Funding requirement and mechanisms. Funding pledges have been made, but uncertainty remains on their sources and predictability and on the percentage for REDD+. It may cost $7 to $28 billion per year to halve global deforestation (CIFOR, 2008). Developing countries propose MRV for REDD+ financing to identify and monitor the available funds. Permanence, liability and leakage: Emissions reductions under REDD must be permanent, so that trees saved this year are not felled next year, but liability still needs to be assigned and any leakage or emissions displacement needs to be controlled. Geographic scale: Should REDD boundaries be set at project, sub-national or national levels, or should a nested approach be used, moving from sub-national to national level? Baselines: Options include an historical baseline for deforestation over a designated period, a projected baseline, or a crediting baseline with rewards for emissions below that baseline. Safeguards: Efforts to sequester carbon in forests must preserve both their biological diversity and local and indigenous rights. Forestry definition is a key issue for Pakistan. Under the UNFCCC, a country canbase its definition on a single minimum tree crown cover value between 10% and 30%, a single minimum land area value between 0.05 and 1 hectare, and a single minimum tree height value between 2 and 5 metres. Countries can also choose whether or not to include palm or bamboos. There is debate about making the UNFCCC forestry definition more credible by, for example, raising its minimum crown cover to 40%. Flicker A REDD+ deal could see developing countries compensated financially for preserving their forests. So Pakistan s forest definition is crucial.its current forest definition is an area where tree crown cover is at least 30%, minimum area of 0.05 ha and minimum height of 3 m and does not include palm and bamboos. A country wanting to save declining forests could lower the crown cover threshold to become eligible for REDD activities. Countries that plan massive afforestation benefit from higher crown-cover thresholds in their forest definition, increasing the eligible areas. Pakistan needs to revisit its own forestry definition after a proper analysis. India, for example, has lowered its crown cover threshold to benefit from the REDD+ carbon market. REDD+ readiness track This track has emerged from, and runs parallel to, the UN negotiations track. While a REDD+ framework is still being negotiated, some countries are already participating in pilot REDD+ schemes with support from the World Bank s Forest Carbon Partnership facility and the UN-REDD programme. These often overlap and seem to compete for the same sphere of influence. The Forest Carbon Partnership Facility is a fund launched by the World Bank at COP 13 in Bali and helps 37 developing countries build capacity for REDD+ activities. It is split into two:the readiness fund (to support phase one) with approximately$230 million pledged, and the carbon fund (to support phase three) with$215 million pledged.theun-redd Programmeis implemented by FAO, UNDEP and UNEP and was launched in 2008 to assist developing countries prepare and implement national REDD+ strategies. Initial membership of nine countries grew to 35 by The UN-REDD Policy Board includes representatives from nine partner countries, donors, civil society, indigenous peoples and the UN agencies, and determines strategic direction and budget allocations. ItsGeneva-based secretariat supports Programmeimplementation by coordinating the activities of the UN agencies and the Policy Board. Pakistan joined UN REDD in 2011 and has selected a REDD focal point and arranged international trainings on capacity building. Pakistan is now eligible for financial and technical assistance for REDD projects under the Programme, which aims to support up to 40 countries between 2011 and The exact methodology to disburse pledged funds has not been decided. However, the REDD+ Partnership group created in Oslo in May 2010 a partnership of 58 developed and developing countries is an interim global platform to scale up actions and finance for initiatives to reduce greenhouse gas emissions from deforestation and forest degradation in developing countries. It aims to take immediate action to improve the effectiveness, efficiency, transparency and coordination of REDD+ initiatives and financial instruments, and to facilitate knowledge transfer, 2

3 capacity enhancement, mitigation actions and technology to the provinces following the devolution of the Ministry in June development and transfer. In June 2011, the Partnership had Partner countries including Pakistan. Figure 1: Forest cover in Pakistan, Donor funds are likely to be administered through this partnership. While there are doubts on whether pledging promises still stand without a comprehensive climate agreement, the REDD+ Partnership group provides a fresh impetus. Phase three, the implementation stage (2013 to 2020), will require much more money and funding sources remain unclear. The global carbon market is a potential source for market-based incentives for REDD+ finance, and some carbon funds have emerged in the forestry sector to use the voluntary market place as a route to a REDD+ market. Such forestry credits are discounted, given the lack of market clarity and the absence of globally agreed rules, but provide valuable lessons. Private sector investment has grown despite uncertainties about the future of REDD, which hinge upon an ambiguous climate regime. The growing voluntary market remains a funding source for REDD+ projects, even as the EU has banned forest carbon credits. Pakistan and REDD Pakistan could benefit from REDD+ as a result of two worrying trends: Pakistan has only 3.3 million hectares of forests and planted trees just over 4% of its total land area, according to best available estimates. This is one of the lowest percentages worldwide and dismal even within South Asia. Pakistan s forest resources are dwindling: by under 2% in the 1990s, but by more than 2% from 2000 to 2005 an extremely high deforestation rate according to UNEP s Asia Pacific Environment Outlook (Figure 1). The Government aims to reverse these trends and to increase Pakistan s forest cover to 6% by In line with this ambition, the country aims to assess the current state of forest cover to develop appropriate policies (Government of Pakistan, ). The Ministry of Environment allocated 12 billion PKR in and launched afforestation carbon sequestration projects in every province, but these projects were transferred Table 1: Potential for REDD in terms of avoided deforestation in Pakistan Source: Forest Resource Assessment and the State of the World s Forests, FAO In addition to benefiting from REDD+, which aims to reward the reversal of high deforestation, Pakistan could: use degraded lands to grow trees enhance carbon stocks in existing forests without increasing forest area generate funds for poverty alleviation in forested areas by curbing deforestation meet the needs of timber and firewood for domestic needs by sustainable forest management (SFM). This requires the accurate identification and financial quantification of the carbon value of Pakistan s forests in current and future terms. A rough estimate of Pakistan s REDD potential suggests earnings of between $95million and $316millionper year if deforestation rates are brought to zero, an estimate outlined in Table1. This is based on limited available data and is an indicative and conservative estimate requiring further work. The final figure could be much larger, depending on the carbon price and the sectors included under REDD+. It does indicate, however, the potential opportunity. The office of the Inspector General of Forests has made a rough calculation that the estimated rate of deforestation and forest degradation of natural pine forests is 27,000 ha/year. If mismanagement of irrigated plantations and vegetated rangelands is added, the potential for REDD+ to reverse these trends ranges from 300 to 400 mts of CO2 from 2012 to Assumes 100% reduction in deforestation, fully compensated, using FAO carbon estimates for above ground biomass. FAO's carbon estimates are very rough.available at 3

4 This estimate also needs further work. Current REDD+ engagement by Pakistan Pakistan is aligning itself with the global architecture on REDD+ and taking domestic steps to internalize the carbon value of its forests: Pakistan has nominated the Inspector General Forests as National Focal Point for REDD, all provinces have notified their respective REDD focal persons and a national REDD Steering Committee has been created. Pakistan joined UN REDD in 2011 (application for FCPF zeeburgnieuws.nl membership is pending). REDD is included in the draft Climate Change policy This action since Cancun in 2010 leaves Pakistan better positioned to benefit from a REDD+ regime. Capacity building and consultative meetings have been held at federal and provincial levels. Evolving a REDD+ Strategy for Pakistan The private sector has engaged in REDD related While REDD+ itself is in a state of flux, Pakistan has made activities with provincial governments and Azad progress and is set to move forward by adopting a pro-active Jammu and Kashmir. plan of action on both the UN negotiations track and the REDD+ A London-based private investment firm has signed readiness track. Progress has slowedsince June 2011, following MOUs with the Government of Khyber Pakhtunkhwa the devolution of the MoE andthe ensuing institutional for a $26 million REDD project (June 2011), and with uncertainty at national level. However,momentum could be the Government of Azad Jammu and Kashmir for a $18 revived with the shifting of Forestry to the newly created million project (October 2011). Ministry of National Disaster Management. Pakistan has allocated $10 million from its Global environment facility (GEF) System for allocation of Pakistan must now strive to complete a national Readiness resources. exercise for REDD+ as follows: GEF STAR allocation under Convention on Biodiversity (CBD) and Climate Change for a SFM project that also build on the initial scoping exercise to estimate the addresses REDD issues. latent national carbon stock in Pakistan s forests, NGOs have held community-based consultations on including the financial value attainable through the REDD. carbon market. Links have been created with International Centre for identify specific REDD+ project opportunities through Integrated Mountain Development ICIMOD Nepal to a focused scoping instrument, such as the REDD cooperate on REDD,with 10 provincial officers due to Opportunities Scoping Exercise (ROSE) tool, which visit Nepali REDD projects in December identifies priority activities and key constraints. The Government has approved a project on REDD address technical carbon accounting issues to improve consultations, capacity building and preparation of data by applying latest techniques such as satellite funding proposals worth $0. 2 million, to imagery and GIS mapping of forests. beoperational by December assess the proportion of emissions resulting from A scoping exercise during the provincial degradation as opposed to deforestation. training/capacity building workshop organized by the analyse the policy, legal and technical requirements MoE in February 2011 included global expertise on for REDD+, including the national baseline and REDD. institutional roles and responsibilities. Projects allocating funds for REDD-related activities Create the institutional framework to handle during include the Pakistan Wetlands contentious issues. Programme and Sustainable Land Management Project. Pakistan s long pending application to the FCPF needs to be Pakistan is an active member of the Coalition of pursued as this will broaden the platform for REDD+ Rainforest Nations, which launched the REDD debate participation. Pakistan signed the initial REDD+ proposal submitted by 23 countries from the Rainforest Coalition through The Readiness exercise should generate appropriate capacity, the AWG-LCA in Accra in leading to a National REDD+ Programme and, ultimately, to a Pakistan has launched a unilaterally financed Mega- REDD policy and strategy. This should build a transparent and Carbon sequestration project in all four provinces and institutionalised framework to attract investments and Azad Jammu and Kashmir that could complement capitalise on the country s latent forestry carbon potential. It REDD+ objectives. should:

5 lay out the institutional and priority parameters for REDD+ investments. ensure participation of relevant stakeholders, especially indigenous forest communities, by delineating their role and rights as custodians of the forests and engaging them in decision making. streamline payment for environmental services. provide impetus for a learning by doing phase to enhance national capacity and strengthen carbon accounting and MRV procedures, with pilot projects in National Parks and nature reserves. cater to the concerns, and ensure the prior informed consent, of forest owners, right holders and indigenous groups. cater for biological diversity needs and concerns through safeguards. Given this vision, Pakistan must remain actively engaged in REDD+ negotiations on many issues including definitions of forest, leakage, baselines, MRV and reference emission levels, all of which are relevant for Pakistan. Finally, Pakistan needs to be cognizant of recent cases of corruption involving private investors from developed countries Carbon Cowboys who grabbed cheap advance forest carbon rights in developing countries that were poorly prepared and partially informed (in contravention of the Cancun agreement that calls for capacity building at phase one and trading at phase three). Learning from these bitter experiences, Pakistan needs to open up its REDD+ market only after identifying and realizing its forest sequestration potential, instituting an informed regulatory/policy framework and fully understanding the dynamics of this new commodity market. Pakistan should support the establishment of a REDD+ Mechanism and of a REDD+ Window in any new Climate Change Fund/Mechanism. Pakistan should seek a definition and recognition of the special needs of countries with low forest cover. Pakistan should push to ensure that REDD+ decisions go beyond the readiness phase to agreement on a work programme covering the next three years. Pakistan may have large proportionate emissions resulting from forest degradation a key point as forest accounting procedures are finalized. With its high level of state-owned forest,and a high level of forest growth in the private forestry sector, Pakistan should support the integration of national and sub-national level credits in a proposed nested approach under REDD+. Given its high historic deforestation rates, Pakistan s should support the historic baseline approach. Pakistan delegates working on REDD must establish personal contacts with peers in countries like Cambodia, Indonesia and Laos that are implementing projects, and learn from their experience. Pakistan at COP17 Durban Pakistan s strategy should be to ensure its engagement in any future REDD+ market framework. Through the Coalition of Rainforest Nations platform, Pakistan already supports the REDD+ processes and framework. It needs to continue that engagement and position itself to attain funding for readiness, while exploring linkages with the global carbon market. There are seven key positions that Pakistan should take. theredddesk.org

6 References: CIFOR (2008), Moving Ahead with REDD: Issues, Options and Implications. Forest Resource Assessment and the State of the World s Forests, FAO 2009/10, Ministry of Environment/WWF project for District wise forestry cover assessment of Pakistan About the Project This policy brief was originally produced as one of a project series to support the Government of Pakistan delegation to COP17 in Durban, South Africa, in November The purpose of the briefs was to provide up-to-date information about key negotiation topics in the run-up to the negotiations. Further progress was made at Durban however these policy briefs may still be useful as background information and context for the current position. The project was funded by the Climate & Development Knowledge Network (CDKN). CDKN aims to help decision-makers in developing countries design and deliver climate compatible development. They do this by providing demand-led research and technical assistance, and channelling the best available knowledge on climate change and development to support policy processes at the country level. e: enquiries@cdkn.org t:+44 (0) This document is an output from a project funded by the UK Department for International Development (DFID) for the benefit of developing countries. However, the views expressed and information contained in it are not necessarily those of or endorsed by DFID, which can accept no responsibility for such views or information or for any reliance placed on them. This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, the Climate and Development Knowledge Network's members, the UK Department for International Development ('DFID'), their advisors and the authors and distributors of this publication do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. Copyright 2011, Climate and Development Knowledge Network. All rights reserved.