Role of Civil Society Organisations in REDD Projects

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1 Role of Civil Society Organisations in REDD Projects A joint study by the Conservation Finance Alliance and PricewaterhouseCoopers Sergio Salas pwc

2 Agenda/Contents Our work in ecosystems and biodiversity Study overview Activities to date The REDD context Role of CSOs in meeting REDD objectives Where are we today? A general REDD structure Key emerging themes 1. Trust 2. Governance 3. Technical capacity and knowledge 4. Community capacity and knowledge 5. Sovereignty Next steps PricewaterhouseCoopers LLP Slide 2

3 Our work in ecosystems and biodiversity UNEPFI BBOP Biodiversity and Finance Sector Study A survey of global project finance specialists, exploring biodiversity awareness levels and biodiversity offsets. UNDP Habitat Banking in LAC Region Leading edge analysis of potential for habitat banking in 9 Latin America and Caribbean countries World Economic Forum Biodiversity Risks Engaging big business in an exploration of the significance of biodiversity related risks. Financial review of Juma RED Reserve Through 2009 we are providing financial review services to Brazil s leading RED Project, in the State of Amazonas. Advisors to Paraguay s first REDD project PwC is providing independent review, guidance and market analysis to REDD project developers in Paraguay. Sustainable investments in biodiversity Economic review of four biodiversity investments in South America and Africa and development of investment fund model on behalf of WWF (2008). PricewaterhouseCoopers LLP Slide 3

4 Study overview Undertaken by PricewaterhouseCoopers on behalf of the Conservation Finance Alliance (CFA) Study objective: To analyze the current and potential role of civil society organizations in the forest carbon supply chain Focus areas: Fiduciary management Participatory engagement Monitoring 12 focus countries Brazil Cambodia Colombia Costa Rica DRC Ecuador Indonesia Madagascar Mexico Peru Tanzania Uganda PricewaterhouseCoopers LLP Slide 4

5 Activities to date 40 interviews across a range of stakeholders: CHANGE NATIONAL AGENCIES TO government Intended interview profiles National agencies Carbon buyers/brokers 15 Lawyers Financiers Project developers 15 CSOs Analysis of interim findings and emerging themes Aim to conduct 60 interviews in total PricewaterhouseCoopers LLP Slide 5

6 The REDD context Objectives of REDD Reduce emissions from deforestation in developing countries Direct revenue streams towards incentivising change in forest resource use behaviour Positive implications for ecological policy and socio-economic development Ecological context Rapid deforestation and degradation of global forests Reduce emissions and climate change impacts from deforestation and degradation Incentivise a change in forest resource use behaviour Local community context Interest in beneficial forest management projects Seeking social and economic benefits Lack of capacity, knowledge, market access and effective governance PricewaterhouseCoopers LLP Slide 6

7 Role of CSOs in meeting REDD objectives Environmental funds Strong connections to NGOs, government and market Experienced in fiduciary management Reputed for transparency and governance Fund projects directly or indirectly through international/national/local NGOs International NGOs Variety of roles Active at all levels and linked to parties at all levels Widely known and reputed Knowledgeable about REDD and conservation Technologically capable Local NGOs Community advisors and representatives Project development, implementation and monitoring Revenue disbursement at community level PricewaterhouseCoopers LLP Slide 7

8 Where are we today? Phased approach to REDD Readiness stage Phase 1 Pilot and experimental stage of REDD CSOs dominate in this phase NGOs have an advantage Some funding available but limited experience in revenue management Phase 1 Phase 2 Phase 3 Readiness National strategy development Policy development and legislative action Institutional strengthening Initial funding through bilateral and multilateral initiatives Capacity building Implementation National strategy implementation Bilateral and multilateral funding and COP mandated funds Capacity building, including basic monitoring abilities Scaling up Further strengthening of national strategies, legislative actions and institutions Market and nonmarket financing based on performance Advanced monitoring abilities PricewaterhouseCoopers LLP Slide 8

9 A general REDD project model Funding sources carbon markets, multi/bi-lateral funds, private sector International NGOs Variety of roles Active at all levels and linked to parties at all levels Widely known and reputed Knowledgeable about REDD and conservation Technologically capable Environmental funds Strong connections to NGOs, government and market Experienced in fiduciary management Reputed for transparency and governance Fund projects directly or indirectly through international/national/local NGOs Local NGOs Community advisors and representatives Project development, implementation and monitoring Revenue disbursement Local communities Interest in beneficial forest management projects Seeking social and economic benefits Lack of capacity, knowledge, market access and effective governance Lack of trust in external parties PricewaterhouseCoopers LLP Slide 9

10 Key emerging themes 1 Trust 2 Governance Trust among actors is a critical element to the success of REDD. Transparency and strong governance at all levels is essential to build trust and credibility Technical capacity and knowledge REDD requires complex technical capabilities Community capacity and knowledge Local communities and NGOs lack sufficient capacity and knowledge of REDD and carbon markets. Sovereignty Legal frameworks and national approaches to REDD are still evolving. PricewaterhouseCoopers LLP Slide 10

11 1 Trust Key issues Close relationships between NGOs and local communities are essential to success Previous disappointments create mistrust in new solutions and ideas In some countries, communities and local NGOs are resistant to market solutions Role of CSOs Local community trust in NGOs is critical to project success Local NGOs and/or local community organisations disburse revenues Environmental funds have the capacity to support strong governance mechanisms High expectations are created among communities PricewaterhouseCoopers LLP Slide 11

12 2 Governance Key issues Lack of transparency in revenue distribution Poor or absent local community governance frameworks Need for clarity of roles and accountabilities of parties Transparency and corruption issues question legitimacy Transparency of revenue transfers between parties Legal void in many countries creates uncertainty Set up costs for funds and projects can be high and the processes can be lengthy Absence of or insecure land rights complicate community and individual revenue distribution Role of CSOs Environmental funds have credibility among investors and markets Involvement of environmental funds and international NGOs reduces project risk Local NGOs have a niche role with respect to communities Environmental funds and NGOs support communities to overcome land tenure barriers NGOs and environmental funds provide legal expertise and support in clarifying land tenure issues PricewaterhouseCoopers LLP Slide 12

13 3 Technical capacity and knowledge Key issues Technology gap between local communities and international standards Presence of cost barriers to small-scale forestry projects Lack of local capability and technological resources for monitoring Role of CSOs NGOs can bridge the gap between the reality of the field and international standards and expectations Environmental funds can fund monitoring services Local NGOs have the potential to play a role in monitoring and verification International NGOs have the technical knowledge and resources to build local capacity PricewaterhouseCoopers LLP Slide 13

14 4 Community capacity and knowledge Key issues Local communities Lack of information and knowledge of markets Lack of market access due to language barriers, geography Small projects are costly and difficult Local NGOs Lack of information and understanding of REDD Lack of legal expertise, market knowledge and capacity for risk assessment Lack of capability and technological resources for monitoring Role of CSOs Local NGOs build local community knowledge and capacity Environmental funds and NGOs facilitate information flow between the market and communities Environmental funds have a role in educating and building NGO capacity International NGOs build capacity of local NGOs International NGOs have a holistic view and can operate at various levels to build capacity PricewaterhouseCoopers LLP Slide 14

15 5 Sovereignty Key issues National vs. sub-national approaches National approaches create fewer opportunities for NGOs and environmental funds Outsourcing of monitoring services dissipates revenue Conflicting government priorities Absence of legal frameworks in most study countries Role of CSOs NGOs and environmental funds can play a role in MRV in both sub-national and national level approaches Environmental funds are well-placed to advice governments on the legal frameworks necessary PricewaterhouseCoopers LLP Slide 15

16 Key challenges No direct experience in managing and disbursing REDD revenues There are few legal frameworks in place that support REDD mechanisms Community and individual land holdings are often small-scale and face high cost barriers Transparency and corruption feature prominently as a key challenge in relation to the public sector Local communities lack knowledge of the market, REDD mechanisms and the issue of climate change Trust is a key element that is not easily forged between diverse actors with diverse interests and roles International NGOs increase credibility and investability of projects but not to the level required for substantial private sector participation PricewaterhouseCoopers LLP Slide 16

17 Next steps Conduct interviews aim to have sample of 60 interviews Interview analysis Creation of a final report Ongoing market analysis PricewaterhouseCoopers LLP Slide 17

18 Add closing statement here 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, PricewaterhouseCoopers LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the 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 PricewaterhouseCoopers LLP. All rights reserved. 'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. PwC Hb05339 PricewaterhouseCoopers LLP Slide 18

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