REDD+ related risks, opportunities and safeguards for biodiversity conservation. a survey of issues and options in Lao PDR and Ecuador

Transcription

1 REDD+ reated risks, opportunities and safeguards for biodiversity conservation a survey of issues and options in Lao PDR and Ecuador Synthesis Report Pubished by:

2 In October 2010, governments agreed to the Strategic Pan for Biodiversity for hating and eventuay reversing the oss of biodiversity of the panet. To buid support and momentum for this urgent task, the United Nations Genera Assemby at its 65th session decared the period to be the United Nations Decade on Biodiversity. It wi serve to support the impementation of the Strategic Pan and promote awareness and the mainstreaming of biodiversity at a eves. Acknowedgements: Specia thanks go to the peope who have contributed to the preparation, impementation, review and editing of this study, in particuar to: Georg Buchhoz, Christian Gass, Danie Haas, Rhena Hoffmann, James McBreen, Phaivanh Phiapaath, Kirsten Probst, Kemens Riha, Andrea Samper Gazon, Fabian Schmidt, Lars Schmidt, Reinhard Wof. Discaimer: This synthesis report is for information purposes. Its content and findings are intended to serve as technica input for the ongoing discussions on biodiversity safeguards and REDD+. The author anaysis, views and recommendations expressed in this report do not necessariy refect any officia government or other organization s poicy or position.

3 REDD+ reated risks, opportunities and safeguards for biodiversity conservation a survey of issues and options in Lao PDR and Ecuador Synthesis Report

4 4 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Synthesis Report Preface Intact ecosystems particuary forests contain significant amounts of carbon. Their conservation is therefore a reativey cost-efficient way to protect the cimate. On this basis, REDD+ (Reducing Emissions from Deforestation and Forest Degradation) intends to create incentives for deveoping countries to reduce emissions through the protection and better management of forests. Apart from mitigation effects, REDD+ aims at generating mutipe co-benefits for nature and peope, such as the conservation of bioogica diversity. There are, however, aso some concerns associated with the impementation of REDD+, such as potentiay negative impacts on biodiversity. These incude ecoogica risks ike the dispacement of deforestation and degradation to areas which are ow in carbon but rich in biodiversity or the reforestation with non-native tree species. Safeguards can hep to reduce such risks and maximise benefits for biodiversity conservation. In 2010, a first series of safeguards was adopted at the internationa eve by the parties to the UNFCCC. In addition, other safeguard frameworks support the consideration of biodiversity in ongoing REDD+ processes, such as the Strategic Environmenta and Socia Assessment (SESA) under the Forest Carbon Partnership Faciity (FCPF) or the REDD+ Socia and Environmenta Standards (SES). In the future, the effectiveness of such standards wi depend particuary on how they are defined, impemented and monitored on the nationa eve. To inform such decision-making processes, BMZ has commissioned an expert study in 2011 to anayse existing conditions and experiences with regard to biodiversity safeguards for REDD+ in two partner countries of German deveopment cooperation: Ecuador and Lao PDR. This synthesis report summarises the key findings identified from interviews with reevant stakehoders and a thorough iterature review, and makes a number of recommendations for the possibe future consideration of potentia risks and opportunities for biodiversity conservation in the context of REDD+, especiay for poicies, activities, projects and programmes supported by deveopment cooperation. It is intended as a technica input to inform decision-makers and practitioners on how to systematicay enhance the synergies between REDD+ and the impementation of the Convention on Bioogica Diversity. Heiko Warnken Head of division Environment and Sustainabe Use of Natura Resources

5 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Synthesis Report 5 Contents 1 Background 7 2 Methodoogy 9 3 Resuts Lao PDR Ecuador 12 4 Concusion and recommendations Lao PDR Ecuador Recommendations for both countries The stock-fow approach REDD+ and biodiversity conservation opportunity mapping Genera recommendations for deveopment cooperation Issues for the internationa debate and cimate negotiations 27 5 Bibiography 28 List of iustrations Iustration 1: Map of estabished and potentia corridor initiatives in Ecuador 14 Source: (MAE/GIZ, 2011) Iustration 2: Comparison of the perceived appicabiity of potentia risks 15 and opportunities of REDD+ for biodiversity conservation in Lao PDR and Ecuador Iustration 3: Simuated procedure and fow of revenues under a stock-fow 20 approach (Source: Schmidt 2012, unpubished) Iustration 4: Simuated stock-fow approach with a 70%/30% ratio compared 21 to a purey emission reduction based revenue approach (Source: Schmidt 2012, unpubished) Iustration 5: Proposed REDD+ biodiversity conservation risk and opportunity 23 management approach

6 6 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Synthesis Report Abbreviations CBD CCBS CDM CiPAD CO2 COP COOTAD DC DoF DoFI ESMF FAN FAP FCPF FIP FRDF FSC GHG GIZ HCVF IBA IGM IGO IPCC KBA Lao PDR MAE NBSAP NPA PA PSB REDD+ REL SCBD SES SEPC SESA SUFORD UNFCCC UN-REDD VCS WB WCMC Convention on Bioogica Diversity Cimate, Community and Biodiversity Standards Cean Deveopment Mechanism Cimate Protection through Avoided Deforestation Project Carbon Dioxide Conference of the Parties Código Orgánico de Organización Territoria, Autonomía y Descentraización (Code on Territoria Organisation, Autonomy and Decentraisation) Deveopment Cooperation Department of Forestry (Lao PDR) Department of Forest Inspection (Lao PDR) Environmenta and Socia Management Framework Fondo Ambienta Naciona (Nationa Environmenta Fund) Fondo Áreas Protegidas (Protected Area Fund) Forest Carbon Partnership Faciity Forest Investment Programme Forest Resource Deveopment Fund Forest Stewardship Counci Greenhouse Gases Deutsche Geseschaft für Internationae Zusammenarbeit High Conservation Vaue Forests Important Bird Areas Improved Grassand Management Intergovernmenta Organisation(s) Intergovernmenta Pane on Cimate Change Key Biodiversity Areas Lao Peope s Democratic Repubic Ministerio de Ambiente de Ecuador (Ministry of Environment of Ecuador) Nationa Biodiversity Strategy and Action Pan Nationa Protected Area (both in Lao PDR and Ecuador) Protected Area Programa Socio Bosque (Socio Bosque Programme) Reducing emissions from deforestation and forest degradation in deveoping countries; and the roe of conservation, sustainabe management of forests and enhancement of forest carbon stocks in deveoping countries Reference Emission Leve Secretariat of the Convention on Bioogica Diversity Socia and Environmenta Standards Socia and Environmenta Principes and Criteria Strategic Environmenta and Socia Assessment Sustainabe Forestry and Rura Deveopment project United Nations Framework Convention on Cimate Change United Nations REDD Programme Verified Carbon Standard Word Bank Word Conservation Monitoring Centre

7 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Background 7 1 Background Deforestation and forest degradation contribute significanty to goba anthropogenic greenhouse gas emissions (GHG) and goba biodiversity oss (Shvidenko 2005, IPCC 2007, TEEB 2009). The IPCC estimates the annua anthropogenic GHG emissions from deforestation at 5.8 Gt CO2 in the 1990s (Metz et a. 2007). Further, the adverse impacts of cimate change constitute an additiona threat to forest ecosystems, which resuts in a negative feedback oop eading to further stress on the mutipe services they provide for humans (compare e.g. Nepstad 2008, Marengo et a. 2011). In recognition of these facts and the assumption that emission reductions from reduced deforestation and forest degradation coud be achieved at comparativey reasonabe costs (compare Eiasch 2008, Boucher 2008, Stern 2009), the REDD+ mechanism is currenty negotiated under the United Nations Framework Convention on Cimate Change (UNFCCC). Despite the fact that the primary function of REDD+ is, in accordance with the UN- FCCC, the reduction of GHG emissions to prevent dangerous cimate change, its potentia contribution to the conservation of biodiversity was recognised at an eary stage and has been brought into both the internationa discourse and negotiations process. This contributed to the emergence of key terms such as co-benefits, core-benefits, additiona benefits, mutipe benefits and safeguards (see Karousakis 2009, Dickson et a. 2009, Sasaki and Putz 2009, SCBD 2009, Mies and Dickson 2010, Harvey et a. 2010, Midgey et a. 2010, Pistorius et a. 2010). Here, the terms referring to benefits stand for the various opportunities for conservation associated with REDD+ impementation, whie safeguards refer more to appicabe (minimum) standards for biodiversity conservation and the prevention of risks that REDD+ impementation coud entai. The consideration of certain safeguards during REDD+ impementation and the monitoring and reporting thereof was first incuded in the UNFCCC COP decisions in Cancun (UNFCCC 2011). Since then, no significant further progress on the formuation of safeguards has been made under the cimate negotiations. One of the reasons for this is that the integration of further, more concrete formuations on the contribution of REDD+ to biodiversity conservation and the reduction of REDD+ reated risks is generay chaenging. This is par- Rice cutivation cose to Nam Phui Nationa Protected Area, Thongmixai district, Lao PDR.

8 8 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Background The Yunguia coud forest, ocated in the Tropica Andes Hotspot, contains some of the word s highest biodiversity. to be appied during the deveopment, impementation and assessment of REDD+ programmes. At the internationa eve, countries which receive support under the Forest Carbon Partnership Faciity (FCPF) of the Word Bank need to compy with a range of Word Bank operationa poicies (BIC 2011). They have to impement, for instance, Strategic Environmenta and Socia Assessment (SESA) to ensure that REDD+ impementation compies with the estabished safeguards under the operationa poicies framework. In addition, the UN-REDD Programme has been deveoping its own safeguards approach, the Socia and Environmenta Principes and Criteria (UN-REDD 2011). ticuary true when it comes to reaising synergies between the UNFCCC and the Convention on Bioogica Diversity (CBD). Many (deveoping) countries, for exampe, fear that the impementation, monitoring and reporting of safeguards wi require significant additiona resources, which woud not necessariy resut in additiona financia benefits generated under REDD+. With regard to this particuar concern however, some iterature does indicate reevant evidence for increased financia benefits through the appication of safeguards see e.g. Obersteiner et a Outside and in parae to the UNFCCC process, there are a number of internationa safeguards initiatives and frameworks which support a stronger consideration of biodiversity conservation in REDD+ projects and programmes. At the project eve, the Cimate, Community and Biodiversity Standard (CCBS) (CCBA 2008), fostering the integration of best-practice and mutipe-benefit approaches into REDD project design and evoution, pays an important roe in the vountary carbon market (mosty as a costandard ), aso because it can resut in higher revenues from carbon credit saes (Hamiton et a. 2010a, Hamiton et a. 2010b). Based on the CCBS, the Socia and Environmenta Standards Initiative was deveoped and standards have been pioted in a number of countries and subnationa administrative units (e.g. State of Acre, Brazi; Ecuador; Centra Kaimantan, Indonesia; Nepa; Tanzania) (REDD+ SES Initiative 2010). The REDD+ SES are intended Yet, in many countries there is sti a considerabe ack of carity what operationa safeguards coud ook ike, which particuar risks they need to address and which opportunities they coud reaise. Whie a number of generic risks and opportunities of REDD+ have been identified specificay for biodiversity conservation, it sti remains uncear whether they generay appy to each country and if and how potentia risks can be prevented or opportunities can be seized. With regard to reaising synergies between the UNFCCC and the CBD, there is e.g. the question in how far nationa conservation priorities reported to the CBD in nationa biodiversity strategies and action pans (NBSAP) or nationa gap anaysis coud benefit from REDD+. Simiary, another question is to what extent the design and impementation of a biodiversity safeguards monitoring and information system for reporting to the UNFCCC as requested by the Cancún decision on REDD+ (1/CP.16; UNFCCC 2011) coud buid on existing CBD monitoring and reporting infrastructure. These open questions were among other issues points of departure for this study. Taking Lao PDR and Ecuador as case studies, the resuts and concusions aim to concretise and provide vauabe inputs to further the internationa discussions on REDD+ Safeguards and to deveop REDD+ biodiversity safeguards and safeguards monitoring and information systems as a means to produce tangibe recommendations and suggestions as to how technica advisory programmes and their partner institutions can better integrate aspects of biodiversity conservation (mitigating risks, reaising benefits) into the deveopment and impementation of nationa REDD+ strategies and projects.

9 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Methodoogy 9 2 Methodoogy The approach of the study empoyed the foowing methods: Firsty, the authors reviewed avaiabe iterature on REDD+ reated risks and opportunities for biodiversity conservation, existing safeguards approaches and safeguards monitoring systems. Based on this review, the team deveoped guiding questions to determine: Whether or not the identified risks and opportunities appy to Lao PDR and Ecuador? Whether or not there are new risks and opportunities in each country? To what extent safeguards and their monitoring are appied in both countries and how this is operationaised? Secondy, the team interviewed 40 key resource persons (invoved either in REDD+ and / or biodiversity conservation) from a tota of approximatey 50 different organisations. This incuded interviewees from ministries, government agencies/departments, NGOs, IGOs, deveopment cooperation agencies, the private sector and individua experts. Pan for and use zoning on the viage eve in Sayaboui province, Lao PDR.

10 10 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Resuts 3 Resuts 3.1 Lao PDR Athough Lao PDR retains one of the highest proportions of forest cover in Southeast Asia, its forests have decined dramaticay from originay 70% of the tota and area to about 40% in 2010 (DoF 2011a), with an increasing rate of deforestation and especiay degradation. It is a highy biodiverse country (e.g. part of WWF s Goba Freshwater Ecoregions and a Tiger Range country) in which arge proportions of the popuation depend often directy on ecosystems and the services they provide. An officia strategy of the government of Lao PDR is to increase both forest cover and quaity, and to use them in order to sequester carbon under the REDD+ mechanism. Lao PDR is a member of both the Word Bank Forest Carbon Partnership Faciity (FCPF) and the Word Bank Forest Investment Program (FIP), but is not a member of UN-REDD yet. Currenty a number of biatera deveopment agencies, NGOs and private investors are in the process of deveoping REDD+ projects in various ocations within the country. With regard to the impementation of nationa and oca REDD+ activities, interviews have confirmed and identified the foowing risks to biodiversity conservation: The risk of dispacement ( eakage ) from high carbon forest ecosystems to ow-carbon forest ecosystems (under certain preconditions). An increased conversion of natura succession areas into tree pantations (afforestation) Not accounting and subsequenty not addressing forest degradation, mainy through (iega) ogging Not addressing hunting and poaching as part of REDD+ impementation Athough Lao Savannah-type forests store ess biomass than humid forests, they are sti important for biodiversity conservation. The Ecosystem of Dry Dipterocarp Forests in Lao PDR In Laos, dry dipterocarp forests are situated in the centra and southern parts of the country. They are found in more arid areas, on poorer sois, and store consideraby ess biomass than mixed deciduous or evergreen forests. They are characterized by fat, ow eevation and with grass and herbs under widey spaced deciduous trees. The ecosystem, however, aso contains many permanent and seasona poos of water, which are of great importance for a variety of widife, from arge animas to rare waterbirds. They are reported to contain many endangered species such as Ed s Deer, Tigers, Asian Eephants, White-winged ducks and others. In Lao PDR, these ecosystems are not very we covered by the protected areas system. They have however been identified as a conservation priority by a number of internationa organisations such as IUCN and WWF. Not sufficienty supporting or benefiting the PA system as the cornerstone of the country s biodiversity conservation efforts Apart from high-carbon evergreen rainforest, Lao PDR together with Thaiand and Cambodia is aso home to the dry dipterocarp forest ecosystems (and in Laos these are concentrated in the South of the country). Given the comparativey ow carbon stocks1 of these dry forest ecosystems, interviewees thought it unikey that these forests woud benefit from REDD+. On the contrary, it was reasoned that pressure on these dry dipterocarp forests coud increase, as other forest ecosystems are increasingy put under protection or more sustainabe harvesting regimes as part of REDD+ projects and programmes. In ight of the fact that these dry dipterocarp forests are i) mainy situated in the owands and can thus be accessed easiy, and that they are ii) generay suitabe for conver- 1 App. 19t C per ha, as compared to app. 82 t C per ha in mixed deciduous and app. 240 t C per ha in evergreen forest ecosystems (Moore et a. 2011).

11 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Resuts 11 sion to agricuture, they are considered to be at risk of dispacement. Another factor in Lao PDR which wi infuence the success of REDD+ and its effects on biodiversity is reated to what forest definition wi be used under the nationa REDD+ strategy. Currenty, there are indications that the government intends to keep tree pantations (such as rubber) as part of the forest definition, athough as yet no specific information has been made avaiabe regarding fina decisions. The incusion of such pantations in the definition coud potentiay ead to an increase in pantation estabishment triggered by REDD+. This coud have effects on areas in different stages of natura succession (such as forest regrowth which is not yet forest as per definition), thereby aso possiby affecting oca biodiversity in such areas. In some cases, interviewees aso thought it ikey that it woud be difficut for Lao PDR to monitor and report forest degradation (both technicay and from a ower cost-effectiveness perspective). Given the incidenta difficuties in controing widespread iega ogging 2, not monitoring and reporting forest degradation may aso resut in iega ogging not being addressed through REDD+, as financia incentives to do so woud be insufficient. If this shoud be the case, there is a risk that REDD+ coud fai to contribute to biodiversity conservation as continuous ogging woud undoubtedy reduce tree species diversity, reduce habitat quaity for other species, and coud aso weaken ecosystem functioning (see e.g. Maestre et a. 2012). Another anticipated possibe shortcoming that did not appear in the iterature review is a potentia faiure to address hunting and poaching. Some interviewees expressed their concern that REDD+ projects woud focus on conserving forest biomass, without paying enough attention to other aspects of biodiversity conservation (e.g. anima species diversity). Hunting/poaching, which are aso driven by the increasing widife trade with neighbouring countries, is a major driver of species oss in Laos. Uness REDD+ projects incude activities to address hunting/poaching or the widife trade itsef, then it is ikey that REDD+ wi be unsuccessfu in this particuar aspect of biodiversity conservation. 2 In this context it is aso important to note that Lao PDR is currenty in the process of strengthening its forest governance and aw enforcement through the FLEGT process. This wi incude specific requirements reguating forest tenure and management as we as the deveopment of a contro system for timber production and trade, which wi aso be reevant for and support the impementation of REDD+ in the country. Logging deck in a production forest in Sayaboui province, Lao PDR. Finay, there is a perceived risk that REDD+ might not contribute to strengthening the Nationa Protected Area (NPA) system. This in turn, coud aso then significanty reduce the potentia for REDD+ to contribute to biodiversity conservation. Current REDD+ projects that focus on NPA have shown that at east historica deforestation in these NPA has been ess than expected, making some NPA unsuitabe candidates for financiay viabe REDD+ projects and therefore reducing potentia benefits for PAs from compensation payments. In a second step, the study aso ooked at potentias and opportunities associated with REDD+ with regard to biodiversity conservation. The interview resuts showed that much ess information coud be extracted for opportunities than for the perceived risks. Generay, there are certain expectations that REDD+ coud contribute to financing NPA. Athough a comprehensive mapping of genera REDD+ suitabiity 3 for the NPA system has not yet been carried out, there are currenty efforts in progress to undertake such an anaysis and cose existing knowedge gaps. Despite the incompete data avaiabe, REDD+ projects in NPA and Protection forests shoud however principay be encouraged, even though they may not turn out to be viabe in financia terms. In addition to this, there are aso pans by the Forest Investment Programme (FIP) to a) finance the upscaing of sustainabe forest management in designated production and protection forests, which coud ead to an increased 3 Suitabiity in the sense that a specific PA has experienced high deforestation rates in the past (i.e. a high baseine), and therefore quaifies for high theoretic emission reduction potentia and associated REDD compensation payments.

12 12 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Resuts Strategic environmenta assessments can hep to identify potentia impacts of REDD+ projects on natura habitats. designation of high conservation vaue forests (HCVF); and b), to finance the estabishment of biodiversity corridors between NPA, which woud increase connectivity. Lao PDR is a participant of the Forest Carbon Partnership Faciity (FCPF). With regard to the concrete appication of safeguards, projects impemented under FCPF are required to carry out a Strategic Environmenta and Socia Assessment (SESA), which incudes an assessment of potentia impacts of REDD+ impementation on biodiversity conservation. The SESA is aso expected to generay compy with the existing safeguard poicies of the WB, which if propery appied woud address some of the risks identified (see Concusions in Chapter 4). Work on the SESA has yet to be concretised; as such no reiabe information is yet avaiabe regarding the effectiveness of the SESA in addressing risks and reaising opportunities for biodiversity conservation in Lao PDR. Athough the current nationa REDD+ authority (Department of Forestry DoF) appears to proactivey foow some opportunities (such as providing support to NPA), in genera it is preferabe to foow a do-no-harm approach, where certain minimum safeguards are adhered to. This is to keep additiona monitoring and reporting requirements ow. For nested REDD+ projects, ideas on safeguards incude e.g. a CDM-ike approva process, during which the authorities woud contro the appication of safeguards. However, such REDD+ specific safeguards sti need to be deveoped. In terms of monitoring and the information system, there is a preference for government monitoring, foowed by third party verification. 3.2 Ecuador The Repubic of Ecuador is a mega-diverse country set in the equatoria region of South America. The territory represents 2% of the Amazon basin, and hosts a variety of ecosystems and a high density of bioogica diversity. Ecuador has approximatey 10 miion hectares of ecoogicay native forest cover (39% of the country s area); and biodiversity and forests both form an important part of the nation s natura and cutura heritage and its economic foundations. More than haf of the forested area beongs to indigenous and oca communities. Forests generate important ecosystem services, such as water cyce reguation, raw materias, and carbon storage. However, Ecuador s deforestation rate is sti among the highest in South America. Over the years, Ecuador has deveoped a series of ega poicies and nationa poicies intended to create favourabe conditions for sustainabe forest management and for the sustained reduction of deforestation in the country. These provisions form a soid basis for defining its nationa REDD+programme, which specificay address issues of biodiversity conservation and its sustainabe use, the rights of indigenous peopes, and the reguation of environmenta services by the State. The interviews conducted in Ecuador revea two major perceived risks which have aso been identified in the Lao PDR study: The risk of not monitoring and reporting forest degradation and subsequenty not addressing forest degradation, and the faiure to address other drivers of biodiversity oss such as hunting and poaching. Whie the Ministry of Environment (MAE) is generay intent on addressing forest degradation, a comparativey ower cost-effectiveness coud make REDD+ an unsuitabe too to reduce forest degradation. However, in contrast to Lao PDR, Ecuador has other mechanisms in pace such as the Socio Bosque Programme (PSB) which effectivey address forest degradation. This Forest Partners Programme is a nationa effort inking nature conservation with poverty reduction through providing economic incentives for forest conservation. For a detaied description of PSB see de Koning et a. (2011). Other risks, such as dispacement ( eakage ), were not perceived as an immediate risk, mainy due to the distinct geographica division of the country. Athough interview-

13 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Resuts 13 Forests, such as the Saint Lucia coud forest, and their biodiversity form an important part of Ecuador s natura and cutura heritage. ees did generay expect that REDD+ woud ikey focus on forest ecosystems in the Amazon (due to high carbon stocks and high deforestation rates; confirmed by the current spread of REDD+ initiatives), it was deemed unikey that agricuture woud shift geographicay into dry forests in the coasta areas, as the region is aready highy popuated and avaiabe and is scarce. Furthermore, interviewees did not perceive the risk of REDD+ fueing the conversion of biodiversity-rich non-forest ecosystems into tree pantations, since Ecuador has aready expicity excuded tree pantations from the forest definition. In addition, two further potentia shortcomings were mentioned by some interview partners: One is that REDD+ as it is scoped now wi not contribute to the conservation of the Páramos, a vegetation form above the upper treeine in the Andes that is characterised by a variety of grassand and shruband ecosystems. Athough they are not cassified as forests, the Páramos are aso, among other things, of enormous importance for water retention and provisioning, and are therefore considered a conservation priority across administrative eves. Another new perceived imitation is that if REDD+ interventions woud be based on historica deforestation mapping, there is a considerabe risk of not addressing potentia future deforestation, which, apart from new emissions, aso entais further biodiversity oss. It was argued that historica deforestation mapping has a imited suitabiity to predict future deforestation insofar as a major driver of deforestation in the country has been the opening up of the Amazon region with new roads (either dedicated infrastructure projects, or reated to e.g. mining and oi concessions). With regard to this imitation, the MAE is currenty trying to identify drivers of deforestation and degradation which wi aow the Ministry to identify potentia future deforestation areas. From a benefit and potentias perspective, the interviews have shown that Ecuador considers REDD+ as an important mechanism to achieve both a reduction of deforestation and forest degradation as we as a contribution to the conservation and sustainabe management of forests and biodiversity. Together with the Word Conservation Monitoring Centre, the MAE has carried out an initia mutipe benefit mapping (Bertzky et a., 2010) to determine potentia overaps between REDD+ and biodiversity conservation. Key findings are: 52% of the country s biomass carbon is stored in its 110 Key Biodiversity Areas (KBA); Many areas that have been identified by the nationa gap anaysis as conservation priorities do aso contain high amounts of carbon, but argey do not have any protective status; Approximatey one-third of Ecuador s biomass carbon is concentrated in protected areas and protection forests, whie the other two-thirds are covered by the first two priority categories of the Socio Bosque Programme. However, ony a fraction of the atter area is currenty protected by contracts under the Socio Bosque Programme;

14 14 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Resuts Iustration 1: Map of estabished and potentia corridor initiatives in Ecuador. Source: MAE/GIZ, With regard to concrete opportunities and benefits from REDD+ for biodiversity conservation, the most important issues mentioned in the interviews were: REDD+ potentiay wi be a too to directy or indirecty contribute to sustainaby financing the existing NPA system and the Socio Bosque Programme; REDD+ has potentia to be used to incentivise subnationa conservation, incuding the estabishment of e.g. municipa PAs and corridors; REDD+ coud support advancing and titing, especiay of indigenous territories, and support the engagement and empowerment of indigenous communities in order for them to assume their rights under the REDD+ mechanism (specificay strengthening their capacities and ega means for protecting their territories and rights); Where PA coud directy benefit from REDD+ (in case of medium-high past deforestation rates), this potentia for co-financing shoud be reaised. This in turn woud aow e.g. the Protected Area Fund (FAP) to divert conventiona PA funding to those PAs which are underfunded and wi most ikey not benefit from REDD+. In addition, the government coud impose a evy on REDD+ returns in order to increase the budget of the FAP. A simiar idea was brought up for the Socio Bosque Programme. A share of proceeds from those PSB areas that woud generate returns under REDD+ coud go into the overa PSB budget for further expansion, i.e. to other non-redd+ areas considered important for conservation, incuding e.g. the Páramos. Whie contributions to the existing NPA system was deemed important, REDD+ was aso considered as a potentia opportunity to boost estabishment of new PAs foowing different management objectives at the municipa, district and provincia eve. In that respect, the reativey new code on territoria organisation, autonomy and decentraisation (Código Orgánico de Organización Territoria, Autonomía y Descentraización COOTAD) from Oct was mentioned as a vauabe ega framework for subnationa REDD+ action. As sub-nationa PAs must be budgeted-for by the respective jurisdiction, REDD+ coud in some areas with high past deforestation rates fi financing gaps. Simiar to the study resuts for Lao PDR, REDD+ coud aso have potentia to contribute to the estabishment of new ecoogica corridors in Ecuador, or to contribute financing aready estabished corridors, in case corridor areas have been subject to deforestation in the past (and additionaity of efforts is given). Work on corridors of nationa and internationa importance is currenty being supported by GIZ (see Iustration 1) and incudes a mapping which woud aow the potentia for REDD+ support to be deter-

15 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Resuts 15 mined, once the distribution of historica deforestation has been identified and confirmed. Another opportunity referred to was empowerment of indigenous peopes and communities, specificay strengthening their capabiities to protect their and from intrusion. According to Bertzky (2010), indigenous territories in the Amazon region contain around 80% of biomass carbon in that region. Activities such as and demarcation and titing, strengthening management capacities and informing indigenous peopes about their rights, incuding ega means to protect themseves against territoria infringements, coud greaty contribute to reduced deforestation and forest degradation and thus biodiversity conservation. Without empowerment, it was argued, the assumed good stewardship of forest areas by indigenous peopes woud be of itte vaue if overwhemed by externa pressure. Ecuador is currenty in the process of the vaidation and assessment of the draft indicator framework of the REDD+ Socia and Environmenta Safeguards (SES), a vountary nationa scae safeguard initiative of which Ecuador is a piot country. With regard to biodiversity conservation, the SES contains provisions to prioritise biodiversity areas and improve their condition through REDD+, which is to be evauated through a monitoring system. The intention is to coect the data through on-site surveys and where possibe from existing (spatia) datasets. However, the method of monitoring wi differ for carbon, safeguards and governance. The MAE intends to combine a data in a centra database (registry) that wi be used for reporting to the UNFCCC. REDD+ projects in Ecuador wi aso have to foow the government s safeguards approach and reporting procedures, for which the MAE intends to deveop a Nationa Information System on Socia and Environmenta Safeguards. Here, another pan is for projects to use centray avaiabe data on safeguard indicators. To meet the increasing demand for monitoring capacity, the MAE is in the process of estabishing a new monitoring unit. Athough the study and this report are not meant to be a comparative anaysis, the resuts from Lao PDR and Ecuador indicate that athough some risks and opportunities are shared they can aso differ substantiay from country to country and that safeguards for biodiversity conservation can be approached very differenty. Perceived Risks Risks and Opportunities Country Appicabiity Lao PDR Ecuador Dispacement to ow-carbon forest ecosystems Yes No Tree pantations Yes No Not accounting and subsequenty not addressing forest degradation Yes Yes Not addressing hunting and poaching Yes Yes No/itte direct support to PA system Yes No No contribution to the conservation of non-forest ecosystems Not mentioned Yes Shortcomings in geographica focus (past deforestation instead of future deforestation) Perceived Opportunities Not mentioned Yes Conservation corridors Yes Yes Indirect support to the PA system (and PSB) Not mentioned Yes Support to subnationa conservation Not mentioned Yes Further empowerment of indigenous peopes to protect their territories Not mentioned Yes Iustration 2: Comparison of the perceived appicabiity of potentia risks and opportunities of REDD+ for biodiversity conservation in Lao PDR and Ecuador.

16 16 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 4 Concusion and recommendations The resuts from the iterature review and the anaysis of the interview process have produced vauabe information about the REDD+ reated risks and opportunities for biodiversity conservation in Lao PDR and Ecuador. Based on the survey resuts and anaysis, in this chapter we wi draw a number of concusions and formuate recommendations for decision-makers in both countries. In order to concude and derive some detaied recommendations on REDD+ and biodiversity conservation for each country, we ask and attempt to answer the four foowing major questions: 1. Do the current safeguards adequatey address the identified risks? 2. To what extent do the current safeguards capitaise (or pan to capitaise) on REDD+ for biodiversity conservation? 3. Woud the panned safeguards monitoring system adequatey capture compiance? 4. If not, which non-redd+ safeguard approaches and monitoring systems coud be used to suppement the current safeguards and its monitoring system? Recommendations which appy for both countries are summarised in a separate chapter to avoid dupication (see Chapter 4.3). At the end of this section, the report wi aso give specific recommendations vaid for deveopment cooperation projects and programmes working in the fied of REDD+ and biodiversity conservation and for the internationa debate and negotiations on REDD+ and biodiversity safeguards. 4.1 Lao PDR For Lao PDR, both the iterature review and the interviews have confirmed that so far no safeguards specific to the REDD+ process have been formuated. In order to address the perceived risks posed to biodiversity by REDD+ we concude that there is a need that particuary the foowing risks shoud be deat with through safeguards in the future: Dispacement of deforestation to dry dipterocarp forest ecosystems Increase of pantations through REDD+ and associated conversion of e.g. young forest regrowth (not yet forests) Not accounting for forest degradation Not addressing hunting and poaching With regard to addressing the risk of dispacement, a recommendation is that the Government of Lao PDR, in cooperation with the donor community, puts a geographica focus on dry dipterocarp forest ecosystems and any non-forest ecosystems that coud potentiay suffer from dispacement for them, in order to particuary benefit from future projects and programmes engaging in biodiversity conservation. In order to reduce the risk of REDD+ supporting tree pantation estabishment, different options are avaiabe. One option woud be to excude pantations from the forest definition. Considering that this may not be viabe, another option woud be to determine that pantations wi be counted as forests, but not for the purpose of carbon accounting under REDD+. In addition, afforestation/reforestation with tree pantations coud be excuded as eigibe project activity by nationa egisation. As in Ecuador, this woud prevent attempts to use REDD+ for afforestation/reforestation with tree pantations. Aternativey, if one does not want to imit the prospective use of REDD+ for e.g. smahoder pantations, strong safeguards in the form of further definitions (what kind of tree pantations are permitted or not, and under which conditions) The forests of Lao PDR are home to a arge diversity of species, such as this back angur.

17 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 17 woud need to be put in pace and monitored. In consideration of the currenty ow monitoring capabiities and ony imited aw enforcement, this coud however encourage misuse or noncompiance with ikey negative impacts for biodiversity conservation. Reducing the risk of not accounting for forest degradation and subsequenty not addressing it seems generay chaenging. Deveopment and appication of a simpified (and thus more inaccurate) degradation monitoring and reporting system that woud sti be eigibe for REDD+ funding (e.g. from biatera or mutiatera funding sources) coud be one option to ensure that degradation is monitored. Such a simpified MRV approach was described by Bucki et a. (2012). Through this, reducing degradation coud be incentivised and consequenty tacked. Otherwise, support to the centra government s efforts in combating iega ogging (e.g. through the current FLEGT process) seems vita to ensure that forest degradation is increasingy addressed, no matter whether it is systematicay monitored or not. To ensure that REDD+ projects address forest degradation, we recommend this as a mandatory activity, even if the project wi not monitor and account for forest degradation. In addition, we consider the risk that biodiversity oss as a resut of hunting and poaching woud not automaticay be addressed by REDD+ activities as tangibe. In the instance of Lao PDR, our recommendation here is to make anti-poaching activities a mandatory activity in REDD+ projects, provided of course poaching is a threat in the project area. Since the Department of Forest Inspection (DoFI) is aso responsibe for reducing poaching, strengthening the DoFI and hereby specificay its provincia fied units for the purpose of reducing iega ogging and hunting is aso considered beneficia in this respect. To make further use of REDD+ for biodiversity conservation, we suggest anaysing options for the introduction of a conservation evy and/or appying the stock-fow approach (Cattaneo et a. 2008, see Chapter 4.3.1). Both approaches woud be a significant step towards ensuring that conservation priority areas, which are not (yet) under threat from deforestation, woud sti profit to some extent from REDD+. As some of the current REDD+ projects in NPA show, not a NPAs wi be abe to benefit financiay from REDD+, specificay under a historica baseine/rel approach. Determining whether or not a conservation evy on REDD+ activities is a reaistic option in terms of poitica wi and administrative procedures is beyond the scope of this study. Sti, as in Ecuador, there is precedence for such a evy in Lao PDR: The Forestry and Forest Resource Deveopment Fund (FRDF). The FRDF is sourced from the saes of timber and The estabishment of rubber pantations has been a significant driver of natura forest oss in South East Asia. NTFP (reported to be highy voatie) with the aim to support among other things the [ ] management of Protected Forest Areas and Nationa Biodiversity Conservation Forests, pantation estabishment, maintenance and regeneration of degraded forests and forest ands, watersheds, environmenta protection, widife conservation [ ] (Muzio et a. 2010). In a simiar way, using a share of proceeds from REDD+ revenues, both government and private, to support biodiversity conservation and channeing it through the FRDF (or other funding mechanisms) to NPAs and other conservation activities that woud not benefit from REDD+ is considered an option that we recommend exporing. At this stage there is no information avaiabe about the effectiveness of the envisaged safeguards and safeguards monitoring and reporting system, i.e. how we risks woud actuay be mitigated and opportunities seized. It is assumed that the deveopment and estabishment of such a system wi take considerabe time, which is probematic considering the fact that REDD+ projects are aready being panned and impemented in Lao PDR. As a resut, we recommend a phased-approach to safeguards (monitoring). In Phase 1, whie the government deveops and tests its safeguards (monitoring) system, internationay recognised standards such as the CCBS must be obigatory for any REDD+ project/activity being impemented within the country. This way, the pressure to quicky deveop such a system woud be reieved and the high credibiity of e.g. the CCBS woud ensure internationa acceptance and recognition. In Phase 2, the dedicated nationa safeguards (monitoring) system (graduay) buids on the experiences from Phase 1 and graduay compements, or as required repaces, this interim approach.

18 18 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 4.2 Ecuador The Government of Ecuador is very pro-activey pursuing a strategy that tries to capitaise on REDD+ for biodiversity conservation whist minimising potentia negative impacts on biodiversity. Its commitment to the conservation of biodiversity is not ony refected by its participation in the REDD+ SES initiative and its nationa REDD+ programme, but aso the constitution and a number of other ega and poicy requirements highight the importance of biodiversity conservation and maintaining ecosystem services. Whie there is without doubt considerabe room to improve the actua impementation of these provisions, Ecuador has proven however e.g. with its Socio Bosque Programme that there is strong commitment to addressing the chaenges associated with deforestation and biodiversity conservation. It is noted that there is a high degree of ownership among government stakehoders, and that MAE pursues an ambitious and exempary REDD+ approach. A possibe imitation for the fu success of REDD+ coud however be the current ack of avaiabiity of upfront and incentive finance to support the mechanism, which shoud be considered and supported as an important success factor by both biatera and mutiatera donors. In Ecuador, interviews have shown that many risks either do not appy or are effectivey neutraised the existing ega and poicy framework for the forestry system. A positive exampe is, for instance, the deiberate excusion of tree pantations from the forest definition a simpe yet aso very effective safeguard. Nevertheess, we beieve that two risks do sti warrant additiona attention: the risk of insufficient monitoring and subsequenty addressing forest degradation, and the risk of not addressing hunting and poaching in REDD+ projects. The most significant risk to biodiversity from our perspective is the possibiity that forest degradation wi not be addressed by REDD+ (not considering other government efforts ike PSB and standard aw enforcement). A possibe reason for this coud be the technica difficuties and high costs associated with monitoring forest degradation, which coud in turn resut in forest degradation being unaccounted for. This, in consequence, woud mean that the Government of Ecuador woud not be abe to receive benefits for reduced forest degradation, even though forest degradation was tacked on the ground. Whie the MAE certainy has the poitica wi to account for forest degradation, financia considerations may overrue such ambitions. Shoud these assumptions hod true and forest degradation woud not be adequatey addressed by the nationa REDD+ strategy, then our recommendation woud be to address forest degradation mainy through PSB rather than REDD+. This may require adding additiona priority areas or rearranging current priority areas within PSB. In genera, exporing further compementarities between REDD+ and PSB is an interesting proposa and shoud be considered. PSB, for exampe, is aso the recommended potentia soution to address another perceived REDD+ risk: that REDD+ efforts wi focus on areas with high past deforestation rates, which is the resut of choosing (or having to choose) a historica REL approach. This reactive approach coud ead to significant forest oss (and thus both biodiversity and biomass) in future deforestation hotspots that are not factored into the REL. To prevent this, and aso address the previousy mentioned risk of not addressing forest degradation, our recommendation is to pursue a pragmatic and effective approach combining the respective strengths of both REDD+ and PSB. From our perspective, under a historica REL approach, REDD+ shoud be used in areas that have been subject to deforestation in the past, whie PSB coud focus more (but not excusivey) on areas that are expected to become future hotspots of deforestation and forest degradation. Last but not east, we recommend that REDD+ activities, no matter whether they are government-ed or private, shoud be obiged to incude measures which aso address biodiversity threats such as unsustainabe hunting, poaching, as we as soi and water contamination. For private sector REDD+ projects, an anaysis of potentia biodiversity threats and appropriate response measures coud be incuded in the approva process of such projects. In terms of reaising conservation opportunities, both the mapping of mutipe benefits and Ecuador s REDD+ SES approach show that the MAE intends to maximise biodiversity conservation under REDD+. However, at present neither initiative has reached a stage which woud aready aow the tracking of tangibe biodiversity benefits in terms of e.g. indicators ike the area of protected dry forests, or simiar. To reach this stage, we recommend impementing an extended mapping approach as outined in Chapter

19 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 19 The fina recommendation on how to capitaise on REDD+ for biodiversity conservation in Ecuador is to focus on conservation of the Páramos ecosystem (see further above). Apart from benefiting through restoration in degraded areas, the vountary carbon market coud in this context pay a (bridging) roe as ong as the scope of REDD+ is ony on forests. The Verified Carbon Standard (VCS 2011), for exampe, features a project category caed Improved Grassand Management (IGM) that incudes a number of mitigation activities that woud be widey appicabe to improved Páramo management. Hence, we recommend that the MAE, in cooperation with Páramo conservation stakehoders, initiates and supports a VCS IGM Páramo piot project to expore this possibiity for co-financing Páramo conservation. It shoud be noted that unike vountary carbon market REDD projects, IGM projects at this stage do not present any probem with doube counting. Considering the current formuation in Ecuador s REDD+ SES approach, risks and benefits woud be identified and mitigated/reaised. The MAE is currenty in the process of vaidating and assessing the REDD+ SES indicators in the fied for the first time, which means that impementing a comprehensive monitoring of compiance under the Nationa Information System on Safeguards wi sti require additiona time in order to aso consider other reevant safeguards mechanisms. The present stage of vaidation and assessment of the REDD+ SES indicators is intended to assess the indicators in terms of appicabiity and feasibiity as we as to identify required sources of information and to make appropriate technica arrangements for the verification of indicators. Operationaizing this wi require significant resources and capacities, which according to some interviewees are not yet readiy avaiabe and sti needs to be deveoped. According to severa interviewees, ack of human resources for monitoring is aso sti a probem. In addition, the current number of 91 indicators, most of them reating to socia safeguards, seems very high, even if 50% of them coud be coected through spatia anaysis. In addition, many indicators have not yet specified in terms of time and quantity. Whie this may not be necessary for some indicators, it woud be desirabe e.g. in the case of biodiversity benefits to measure progress. With regard to the biodiversity safeguards indicators, our recommendation woud therefore be to further specify the indicator sets in terms of time and quantities with a view towards making data coection effective but as easy as possibe. Afforestation activities shoud prioritize the use of native species and be ocated strategicay to enhance ecosystem connectivity. Oceots used to be hunted extensivey for their fur, but protection efforts have ed to a recovery of numbers in recent years.

20 20 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 4.3 Recommendations for both countries The iterature review and the interviews have shown that Lao PDR and Ecuador are currenty at different stages in the deveopment of REDD+ and the associated safeguards framework for biodiversity conservation, whist the anaysis has served to iustrate a number of concusions and recommendations shared between the two countries. Based on the interview resuts, it is recommended that both countries consider the introduction of a share of proceeds and/or a so caed stock-fow approach which woud both be instruments to ensure that conservation priorities, not directy eigibe for REDD+, woud sti profit to some extent through a controed redistribution of benefits (see Chapter for a detaied account of the stock-fow approach). In this context, the recommendation of putting a conservation evy on a REDD+ activities or using a certain percentage of proceeds from REDD+ revenues for biodiversity conservation are options that were mentioned by severa interviewees. Whie the basic idea is quite simpe, determining the right amount/percentage, gaining acceptance from those who woud get taxed and determining the target fund (where the money shoud be directed) might prove difficut. Simiar exampes, however, can aready be found e.g. in Lao PDR and Ecuador. In Lao PDR, for instance, the Government has pioneered a 1% evy on hydropower generation by prime ministeria decree which is intended for conservation purposes. In Ecuador, the Quito water fund, for instance, puts 2% of its annua revenues into conservation activities. Moreover, as a target fund or administrative body, the Nationa Environmenta Fund of Ecuador (Fondo Ambienta Naciona FAN) woud certainy be a thematicay suitabe and in management terms professiona and credibe institution to manage and administer such financia resources. Such exampes coud give vauabe information and experiences to deveoping simiar approaches for REDD+ and biodiversity conservation in Lao PDR and/or Ecuador The stock-fow approach The stock-fow approach coud be used as a mechanism to divert REDD+ funding from areas with high historica emissions to e.g. areas important for biodiversity conservation but with ow historica emissions. Simpy speaking, the stock-fow approach does not ony take emissions (fow), but aso remaining forest carbon stocks into account when it comes to revenue sharing. A further variation is the so-caed stock-fow with targets approach, where emission reduction targets are aso taken into account. Another variation that the author recommends woud reward e.g. NPAs for both achieved emission reductions and remaining forest carbon stocks based on a yet to be defined ratio (e.g. 50%/50% or 70%/30% respectivey for emission reductions and remaining forest carbon stocks). Iustration 3 (beow) outines the procedure of the stockfow approach (whie aso covering other components). Essentiay, emission reductions from various REDD+ activities and entities (such as e.g. through PAs A and B in Iustration 4 beow) woud be registered by the nationa registry before being sod to an internationa fund or to the carbon markets. Revenues woud fow to a nationa REDD fund or simiar financia mechanism, and woud then be redistributed to the individua subnationa entity (such as a PA) based on both emission reductions and remaining forest carbon stocks. Iustration 3: Simuated procedure and fow of revenues under a stock-fow approach (Source: Schmidt 2012, unpubished)

21 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 21 The foowing chart (see iustration 4) iustrates how a variation of the stock-fow approach (based on emission reductions and remaining forest carbon stocks) woud affect revenue distribution between two fictiona PAs (A and B) that differ consideraby in terms of emission reductions and remaining forest carbon stocks. Iustration 4 shows a 70%/30% ratio compared to an approach purey based on emission reductions. PA B in this case represents a PA that woud not gain much, if at a, from REDD under a pure emission reduction based approach. It becomes evident that the stock-fow approach coud be a vauabe too to promote the redirection of revenues to reward entities that have previousy performance we in terms of forest conservation or that woud not gain from a historica REL approach, such as aready we-protected areas. Nevertheess, when thinking about appying the stock-fow approach it is important to be cognisant of the foowing points: a) Revenues are usuay ony generated by emission reductions, which means that the stock-fow approach requires emission reductions to finance forest carbon stocks. It is merey an interna redistribution mechanism based on remaining carbon stocks in year Y and emission reductions achieved in period x-y. It can ony be used as ong as the redistribution towards remaining forest carbon stocks does not endanger the financia viabiity of emission reduction efforts; b) Acceptabiity: this approach requires both poitica wi and support from entities who woud receive ess under a stock-fow approach than under a purey emission reduction based approach; REDD+ and biodiversity conservation opportunity mapping In order to be abe to maximise the potentia of REDD+ to contribute to biodiversity conservation in specific sites, we recommend carrying out a genera mapping exercise in order to visuaise biodiversity conservation priorities, carbon stocks and past deforestation (and projected deforestation if considered under the REL). This woud aow those areas important for biodiversity conservation to be determined, which aso simutaneousy have significant emission reduction potentia and coud therefore directy profit from REDD+ interventions. Based on approximate carbon stock data and historica deforestation rates, rough initia baseines and the theoretica mitigation potentia coud be assessed to estimate the financia significance of prospective REDD+ revenues in biodiversity priority areas. In order to determine biodiversity conservation priority sites, we recommend an aggregation of the foowing existing conservation priorities and datasets: Iustration 4: Simuated stock-fow approach with a 70%/30% ratio compared to a purey emission reduction based revenue approach (Source: Schmidt 2012, unpubished)

22 22 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations Nationa and subnationa protected areas and other forest protection categories Areas identified in the nationa gap anaysis (once competed) High Conservation Vaue Forests (HCVF). In Lao PDR these have e.g. been mapped inside seected production forests supported by the SUFORD project Biodiversity conservation corridors Internationa conservation priorities such as Important Bird Areas (IBAs) and Key Biodiversity Areas (KBAs) Centres of agrobiodiversity Other forest areas considered important for biodiversity conservation, which do not yet have any protective status. From the authors perspective, this shoud constitute arge areas of unfragmented, and preferaby od growth, forest ecosystems These biodiversity datasets shoud be combined into a conservation priority index that woud serve as a basis for steering REDD+ activities within the country, no matter whether they are impemented by government or privatey. Reguation and/or incentives (ess fees, taxing, etc.) coud be used to steer private REDD+ projects towards conservation priority areas. During the process of setting biodiversity conservation priorities for REDD+, biodiversity conservation organisations and experts shoud be consuted. The ack thereof was a criticism voiced e.g. by severa interviewees in case of Ecuador. In Ecuador, for exampe, such mapping woud aso need to be aigned with the PSB priority mapping, in order to avoid overap and to fuy maximise coverage. As aforementioned, one option woud be to have the REDD+ focus on areas considered as biodiversity conservation priorities with high to medium past deforestation rates (enough past deforestation to generate sufficient returns), whie PSB coud party shift its focus towards anticipated future deforestation hotspots, degradation hotspots, and the Páramos. 4.4 Genera recommendations for deveopment cooperation Apart from the respective country recommendations, this synthesis report woud ike to make a number of recommendations for poicies, activities, projects and programmes supported by deveopment cooperation. A centra recommendation is that the consideration of biodiversity safeguards shoud be more systematicay deat with in DC projects generay, incuding project panning. An important basis for this woud be for REDD+ safeguards guideines and approaches to aso be incuded in sectora concepts (e.g. focus on forest protection and sustainabe forest management rather than afforestation/ reforestation, mitigation measures to prevent dispacement into ow-carbon forest ecosystems and other important ecosystems). Whie maximisation of biodiversity benefits in REDD+ programmes and projects is generay desirabe from our perspective, this may not be the case in a situations or for a governments. There might be projects which focus on demonstration of certain technica aspects or specific capacity-buiding efforts, whereby concrete additiona benefits for biodiversity conservation cannot be achieved or woud be difficut to integrate. Taking this into account, we recommend that on a country-by-country and projectby-project basis, a decision shoud be taken during project panning as to whether a REDD+ project or programme shoud pursue a more passive no harm or a proactive approach to maximise biodiversity benefits. Foowing this concusion, it is recommendabe that deveopment cooperation deveops a systematic way to integrate both a no harm and maximising biodiversity benefits approach into project panning and impementation. Here, we shorty sketch how such a systematic way might ook. Depending on the decision taken ( no harm or maximising biodiversity benefits ), we propose the foowing action: In the case of no harm : To appy a REDD+ biodiversity risk management approach as outined in Iustration 5 and described beow;

23 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 23 Generic risk and benefit identification Impact monitoring and evauation Risk and benefit anaysis and assessment Iustration 5: Proposed REDD+ biodiversity conservation risk and opportunity management approach Risk response and benefit reaization Risk and benefit prioritization In the case of maximising biodiversity benefits : in addition to the risk management approach, a benefit management approach incuding a REDD+ biodiversity priority mapping woud need to be carried out; The risk and benefit management too coud be buit on generic and adaptive risk management approaches (compare e.g. Ibisch et a and Münze and Jenny 2005, as cited in Ibisch et a. 2009), and coud incude the foowing iterative steps (see aso Iustration 5 beow): 1. Generic risk and benefit identification: isting of risks and benefits through brainstorming and iterature review; 2. Risk and benefit anaysis and assessment: further anaysis of the identified risks and benefits to answer the foowing questions: a. Does the risk reay appy? If yes, what is the ikeihood of the risk materiaising (now and in the future), and what woud be its potentia impact? b. Can the benefit actuay be reaised and how vauabe is the reaisation of that benefit to the government or the wider conservation community, etc.; These steps serve to produce a consoidated ist of risks and benefits that are considered important to address/reaise; 3. Risk and benefit prioritisation: even a consoidated ist may contain too many risks and benefits to address at once. Hence, this step aims at rearranging the consoidated ist of risks and benefits to arrive at a priority ist for risks and benefits. In the instance a maximising biodiversity benefits project is pursued, the prioritisation needs to be compemented by a spatia priority mapping. Here, a avaiabe spatia data on biodiversity conservation (priorities) woud be combined to generate a biodiversity conservation priority index. This index woud be matched with a historica deforestation map (use of coarse data if medium resoution is not avaiabe or proxy indicator data, such as e.g. accessibiity), and where avaiabe carbon stock data to determine where REDD+ coud contribute (most) to biodiversity conservation; 4. Risk response and benefit reaisation: this step invoves the design and impementation of risk mitigation measures. Most ikey, it woud invove adding further or adapting existing project activities to address risks and capitaise on benefits. In the case of a maximising biodiversity benefits project, this step woud entai ocating the project (activities) in the identified priority areas; 5. (Impact) monitoring and evauation: this step invoves the monitoring of project activities to determine whether or not the desired impact is achieved. In addition, the consoidated ist of risks and benefits shoud aso be monitored according to possibiity, in order to be abe to react to changes in risks and opportunities. This is meant to be an iterative approach, and the resuts from Step 5 woud feed into other steps where appicabe (e.g. monitoring of risks may ead to their reassessment and reprioritisation). Finay, Step 1 shoud be repeated reguary to see if new risks and benefits or other opportunities have emerged;

24 24 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations An easier way to reaise biodiversity conservation opportunities in REDD+ projects woud be to focus on those REDD+ activities that most probaby yied the highest positive impact for biodiversity conservation. Usuay, this is associated with the protection of natura or even od growth forest areas. Whie the findings of this study generay support such a prioritisation, choosing the most suitabe sites sti remains a critica issue. To give an exampe, the protection of highy fragmented and sma natura forest areas that may be considered important by conservationists coud seem a questionabe priority for others, especiay if connectivity and enargement of these sma fragmented areas cannot reaisticay be achieved. Consequenty, a simpified prioritisation of activities shoud therefore sti be accompanied by a priority mapping. Further to these aspects of systematic safeguard integration into projects and programmes, we woud aso ike to make a number of more thematic and activity-reated recommendations, which are as foows: Consider financing the deveopment and set-up of a centra biodiversity database/cearinghouse to coect past and ongoing biodiversity-reated data that coud be used for a safeguards monitoring and reporting system; In order to demonstrate that the appication of safeguards and especiay maximising biodiversity conservation benefits can aso pay off financiay, we recommend that quantities are determined in accordance with the biodiversity conservation benefits invoved, especiay for deveopment projects and programmes which provide incentives and/or compensation payments. In reation to the atter, this amount shoud consider both the type of activities and the respective ocation. To give exampes, under such a system more incentives or compensation payments coud be provided for: Avoided deforestation of natura or od-growth forest than for afforestation; Consideration of biodiversity conservation when setting incentives/compensation payments in REDD+ projects, e.g. the new REDD+ Eary Mover Program; Activities in and around areas identified as conservation priorities (e.g. PAs, conservation corridors) than for non-priority areas; Testing of stock-fow or share-of-proceeds approaches as mechanisms for making avaiabe financing for biodiversity conservation through REDD+; Permanenty estabishing new PAs, corridors or other conservation schemes than for temporary conservation measures; In case of ack of time or interna resources to deveop and monitor nationa safeguards, consider the (temporary) appication of safeguards through mandatory use of internationay recognised standards, such as the CCBS; In cases where important conservation priorities fa outside the scope of UNFCCC REDD+ (e.g. wetand and grassand conservation), consider supporting other carbon finance opportunities, e.g. in the vountary carbon market; Promote the use of existing safeguard systems (e.g. SESA/ESMF, SES, SEPC, CCBS, HCVF) and support their professiona impementation specificay with regard to defining adequate indicators; The introduction of certified sustainabe forest management practices (e.g. FSC) than for non-certified sustainabe forest management practices; Of course, such a system based on a different scae of amounts woud need to be country or even project or programme specific, depending on the REDD+ activity options avaiabe within each individua context. With regard to the REDD+ Eary Mover Program, both incentives and payments for emission reductions coud aso be increased in case a REDD+ project or activity is certified by an internationay recognised standard such as the CCBS (and that is not seeking vountary carbon market finance), which woud guarantee any additiona biodiversity benefits have been captured by the activity and/or project. Provided the partner country shares the view that REDD+ shoud aso be used for conservation purposes outside

25 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 25 estabished concepts (e.g. no or itte historica emissions from deforestation and degradation, currenty no additionaity), we suggest that deveopment cooperation supports testing indirect and interna redistribution concepts for financing conservation through REDD+. As in the recommendations for Lao PDR and Ecuador, these coud either be achieved by introducing a share of proceeds or a stock-fow approach. Both concepts have advantages and disadvantages that shoud be taken into account when considering their appication. The share of proceeds approach seems generay simper and more straightforward in terms of additiona effort, as it shoud usuay be possibe to introduce through a reguation (provided the required poitica wi). In our eyes, a share of proceeds shoud be appied to a REDD+ activities in a country, incuding those impemented by the government or the private sector. In case of government projects, an interna set-aside rather than a share of proceeds coud be considered. The share of proceeds / set-aside shoud be appied irrespective of the source of funding (mutiatera or biatera fund, vountary carbon market or a nationa, regiona or goba emission trading scheme). Provided REDD+ transactions are recorded in a registry, this coud technicay serve as the basis to determine the share of proceeds. If not, other sources of information or systems to account for annua emission reductions and their sae (e.g. annua reports from projects) coud be used. Furthermore, it is important to give carefu thought to the question of what the basis for the cacuation of the share of proceeds is (e.g. emission reductions, gross revenues from credit saes, net project revenues). Appication to gross revenues from credit saes woud e.g. punish those REDD+ activities / projects that have high mitigation costs per t of CO2. The channeing of the proceeds to specific conservation activities shoud rey on existing financia infrastructure and mechanisms, wherever possibe. In case a country aready possesses a nationa conservation fund or a simiar instrument that meets certain accountabiity standards (such as FAN in Ecuador), such a fund coud be used. Aternativey, in the absence of such a fund, the money coud be channeed through the reguar government budget to provide additiona finance e.g. to the PA system and other government institutions responsibe for conservation. If money is aso to be provided to non-government conservation initiatives and a nationa conservation fund does not exist, estabishment of such a fund shoud be considered (or existing instruments coud be adapted). A possibe disadvantage of such a share-of-proceeds approach is that it coud be perceived negativey as a banket conservation tax, disregarding the conservation efforts that individua projects are possiby aready undertaking. If desired, this coud of course be considered by reducing the share-of-proceeds or even exempting those REDD+ activities and projects that are evidenty and verifiaby aready contributing to biodiversity conservation (e.g. projects certified by CCBS). This woud enhance perceived equity, but of course woud aso increase the administrative burden, as procedures for deaing with reductions and exemptions woud need to be estabished and carried out. In our eyes, this additiona effort speaks against a differentiated share-of-proceeds. Another possibe disadvantage of a share-of-proceeds is that it may reduce the financia viabiity of REDD+ activities and projects, depending of course aso on the actua percentage and the measure to which the percentage is finay appied. This coud specificay be reevant in the eary stages of a REDD+ activity or project, when returns coud sti be to a certain extent voatie or insufficient. Whie genera overtaxing needs to be avoided not to discourage REDD+ action and investment, concerns that a share-ofproceeds woud reduce financia viabiity in the eary stages of a project coud be accommodated by graduay introducing a share-of-proceeds approach or by defining a minimum profit threshod before it be appied. In contrast, a stock-fow approach woud require more effort than a share-of-proceeds approach, but payments for conservation woud be performance-based (for not reducing the stock) simiar to other REDD+ activities. The stock-fow approach can be appied at various administrative eves incuding an entire country, individua jurisdictions or other discrete areas. A country or jurisdictionascae stock-fow approach woud be preferabe to incentivise arge-scae conservation. However, it shoud be noted that the stock-fow approach to date remains a theoretica concept. We therefore recommend testing its practicabiity for wider use at the project eve, preferaby in a country where deveopment cooperation is aready supporting the impementation of a REDD+ project that incudes performance-based payments for emission reductions. Fur-

26 26 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations thermore, to demonstrate its use for those conservation priority areas that woud otherwise not benefit from REDD+, the project woud preferaby be situated in or around such a conservation priority area (e.g. in and around a PA as is the case e.g. with the CiPAD project in Lao PDR) and shoud incude an area which has itte or no baseine emissions (e.g. core zone of a we protected PA or a currenty inaccessibe forest area). In addition to the usua REDD+ monitoring requirements, tota forest carbon stocks woud need to be assessed for each monitoring interva and woud form the second basis for distributing revenues (in addition to emission reductions). The significant difference between the stock-fow and the share-of-proceeds approach is that the stock-fow approach directy integrates and rewards conservation of carbon stocks irrespective of the past, actua or future threat. The carbon stock itsef woud be comparabe to a financia stock that generates an annua interest rate or dividend. Athough many forested PA are ikey to gain from the stock-fow approach as they usuay feature comparativey intact forests with high carbon stocks, this may not aways necessariy be the case. A possibe shortcoming with regard to conservation is that payments are subsequenty based again ony on carbon (though it is in the form of carbon stocks). Even if the stock-fow approach is deveoped focusing on carbon stocks, it coud aso be extended to incude biodiversity metrics to address this shortcoming. Apart from carbon, the stock coud aso incude e.g. the amount of od-growth forest ecosystems, the degree of forest fragmentation, the popuation of certain indicator species, or any other metric that seems suitabe to make a statement on the heath or quaity of the (forest) ecosystems that forms the basis for incentives or financia rewards. Another perceived advantage of the stock-fow approach is its reiance on the existing revenue sharing system (for emission reductions). We beieve that both the share-of-proceeds and the stock-fow approach are suitabe instruments to further finance biodiversity conservation through REDD+. Appicabiity shoud be determined on a project-by-project basis depending on the circumstances in each country. Aso, the approaches are not mutuay excusive but coud be combined to further increase REDD+ finance for biodiversity conservation. With regard to existing possibiities and initiatives to further deveop REDD+ taking into consideration the above mentioned recommendations, interview resuts have shown that, in Lao PDR in particuar, capacities to do so are currenty imited. Whie this contributes to the deay of government-ed REDD+ impementation, incuding work on safeguards, this does not necessariy appy to private sector REDD+ projects aready being impemented in the respective country. This coud, or in fact probaby does aready, ead to situations where certain REDD+ projects are being carried out without sufficient or potentiay any consideration of safeguards (neither biodiversity nor socia). To address this probem, we beieve that the earier recommendation for Lao PDR to temporariy mandate the compusory use of internationay recognised standards such as the CCBS coud be generaised for countries in simiar situations. We recommend that deveopment cooperation shoud promote this approach whie supporting the deveopment and appication of existing nationa-scae safeguard frameworks such as the SES, which shoud ideay be more ambitious and targeted than existing internationa systems. Drawing on the resuts from Ecuador, deveopment cooperation with its considerabe experience from appying resuts-based management aso seems to be very we paced to support the formuation of effective indicators that aow for efficient and transparent monitoring. Experience shows that poor data avaiabiity or quaity or both is a recurrent issue in many deveoping countries and must be addressed in order to enabe functioning monitoring systems. Having said this, a centra open-access biodiversity database or cearinghouse mechanism seems key to reduce monitoring costs for biodiversity safeguards and to improve spatia prioritisation for conservation. In order to enhance the quaity of monitoring systems, internationa deveopment cooperation shoud consider supporting the deveopment, estabishment and initia operation of such (geo)databases incuding the coection and feed-in of existing data and studies to fi current gaps. One of the fina recommendations of this report is based on our findings and concusions on the Páramos in Ecuador. Athough conservation of non-forest ecosystems coud aso be supported through both the share-of-pro-

27 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Concusion and recommendations 27 ceeds and stock-fow approach, we generay recommend direct carbon financing through the vountary market or emerging regiona emission trading schemes, wherever possibe. In the instance that a country has significant non-forest conservation priorities such as grassands or wetands, these coud presenty be deveoped into VCS projects under the categories improved grassand management and peatand conservation and rewetting. Given the significance of these areas to provide important ecosystem services to humans, it is generay deemed important that deveopment cooperation increasingy aso considers and supports such projects. Unike REDD projects geared towards the vountary market, supporting such grassands or wetands projects woud at present not contradict existing UNFCCC negotiation positions with regard to carbon market financing and nationa/subnationa approaches. They woud aso, currenty, not pose a probem with regard to the issue of doube counting. Furthermore, it is recommended that during the panning and design of new conventiona conservation projects financed by deveopment cooperation, the findings from a REDD+ risk and benefit anaysis shoud aways be taken into account. Effectivey, this means that conventiona conservation projects shoud consider targeting those conservation priorities, incuding non-forest ecosystems, which are either not sufficienty covered by REDD+ and/or which are ikey to be affected by dispacement (e.g. ow carbon forest ecosystems and non-forest ecosystems). 4.5 Issues for the internationa debate and cimate negotiations Finay, we woud aso ike to raise and highight a number of issues derived from the resuts of this study, deemed important for consideration in the internationa debate and negotiations on REDD+. The report has for exampe shown how risks and opportunities can vary from country to country, and that there can be significant differences in the respective approaches to address them in each country. Not a identified risks, benefits and opportunities appy to a countries, whie additiona, sometimes very distinctive opportunities and threats may occur. A singuar set of biodiversity safeguards at the Convention eve, shoud this sti be envisaged, does therefore not seem to be a practica soution. Rather, parties shoud be required to conduct systematic biodiversity conservation risk assessments and consequenty address these risks through country specific safeguards on the nationa, or possiby on a regiona eve. Further, parties shoud aso be encouraged to conduct biodiversity conservation opportunity assessments, incuding mutipe benefits mapping as aready carried out and supported e.g. by the Word Conservation Monitoring Centre (WCMC). On risks, we beieve that the risk of not accounting for forest degradation, which coud subsequenty ead to not Indigenous and oca communities depend on forest biodiversity in many ways. They are crucia stakehoders in panning and managing REDD+ and conservation projects.

28 28 REDD+ reated risks, opportunities and safeguards for biodiversity conservation Bibiography 5 Bibiography addressing forest degradation, woud best be addressed at the Convention eve by making it mandatory within a certain timeframe of REDD+ impementation. To faciitate accounting of forest degradation, SBSTA coud commission the deveopment of a simpified degradation monitoring and reporting methodoogy that shoud aso be acceptabe for initia performance-based payments. From our perspective, the current scope of REDD+ shoud not be extended, in a bid to not further compicate the negotiation process at the internationa eve. It is however deemed important to further promote the acknowedgement of non-forest conservation priorities in this context, and enabe deveoping countries to harness carbon finance for their protection. Deveoping countries shoud be abe to vountariy account for carbon emissions and removas from e.g. grassands and wetands and most importanty if successfu be abe to financiay gain from these emission reductions, which coud additionay support important biodiversity conservation. With appropriate safeguards, the impementation of REDD+ can contribute significanty to the impementation of the CBD Strategic Pan and the achievement of its Aichi Targets Bertzky, M., Raviious, C., Araujo Navas, A. L., & Kapos, V. (2010). Carbon, biodiversity and ecosystem services: Exporing cobenefits. Ecuador. Cambridge, UK. BIC USA (2010). SESA, Safeguards and the FCPF: A Guide for Civi Society. Boucher, D. (2008). Out of the woods: A reaistic roe for tropica forests in curbing goba warming. Retrieved May 25, 2012, from Bucki, M., Cuypers, D., Mayaux, P., Achard, F., Estregui, C., & Grassi, G. (2012) Assessing REDD+ performance of countries with ow monitoring capacities: the matrix approach. Environmenta Research Letters, 7, Cattaneo, A. (2008). A Stock-Fow Mechanism to Reduce Emissions from Deforestation. CCBA (2008). Cimate, Community & Biodiversity Project Design Standards. Arington, VA: CCBA. Retrieved May 17, 2012, from MAE/GIZ (2011): Corredores de conectividad en e Ecuador. de Koning, F., Aguiñaga, M., Bravo, M., Chiu, M., Lascano, M., Lozada, T., & Suarez, L. (2011). Bridging the gap between forest conservation and poverty aeviation: the Ecuadorian Socio Bosque program. Environmenta Science & Poicy 14, DoF (2011a). Department of Forestry: Lao PDR Preiminary proposa for FIP. Retrieved Apri 12, 2012, from cimateinvestmentfunds.org/cif/sites/cimateinvestmentfunds.org/fies/lao%20fip%20presentation%20piot%20 Country%207%20Nov.pdf Dickson, B., Dunning, E., Kien, S., Mies, L., & Pettorei, N. (2009). Carbon markets and forest conservation: A review of the environmenta benefits of REDD mechanisms. UNEP Word Conservation Monitoring. Eiasch, J. (2008). Cimate change: Financing goba forests. The Eiasch Review. London. Hamiton, K., Chokkaingam, U., & Bendana, M. (2010a). State of the Forest Carbon Markets 2009: Taking Root & Branching Out. Hamiton, K., Sjardin, M., Peters-Staney, M., & Marceo, T. (2010b). Buiding Bridges: State of the Vountary Carbon Markets Harvey Ceia A., Dickson, B., & Kormos, C. (2010). Opportunities for achieving biodiversity conservation through REDD. Conservation Letters, 3(1), Hassan, R. M., Schoes, R., & Ash, N. (Eds.) (2005). Miennium ecosystem assessment series. Ecosystems and human webeing: Current State and Trends: Findings of the Condition and Trends Working Group. (Miennium Ecosystem Assessment). Washington, DC: Isand Press. Ibisch, P. L., Kunze, B., & Kreft, S. (2009). Biodiversitätserhatung in Zeiten des (Kima-) Wandes: Risikomanagement as Grundage eines systemischen nichtwissenbasierten Naturschutzes. In L. F. E. (. Ministerium für Infrastruktur und Landwirtschaft (MIL) des Landes Brandenburg (Ed.), Eberswader Forstiche Schriftenreihe: Vo. 42. Wad im Kimawande Risiken und Anpassungsstrategien (1st ed., pp ). Potsdam: Brandenburgische Universitätsdruckerrei und Veragsgeseschaft Potsdam mbh.