Grace Wong gave this presentation in Jakarta on 15 May 2013 at a workshop which looked at the context, elements and dynamics of REDD+ in Indonesia.

1. A global comparative review of
REDD+ benefit sharing mechanisms
Grace Wong
Workshop on Context, Elements and Dynamics of REDD+ in Indonesia
Jakarta, May 15, 2013

2. Presentation Outline
 Definition of benefit sharing
 Review of benefit sharing mechanisms in 13 countries
 Comparing for effectiveness, efficiency and equity
 Assessment of risks
 Concluding thoughts

3. What do we mean by
‘benefit sharing’ in REDD+?
• Benefit sharing = distribution of direct and indirect net
gains from the implementation of REDD+
• Benefits come with costs:
• Direct financial outlays related to REDD+ (implementation
and transaction costs)
• Foregone revenues from alternative forest land and
resource use (opportunity costs)
• Benefit sharing mechanism = range of institutional
means, governance structures and instruments that
distribute the net benefits

4. Comparative review of benefit
sharing mechanisms

5. • Reviewed existing benefit-sharing mechanisms (BSMs) in
REDD+ and forest management
• Evaluated BSMs for their potential 3E (effectiveness,
efficiency and equity) outcomes, and risks
• Comparative analysis of 13 countries based on country
profiles developed in 2009-2012, political economy analyses,
and other relevant literature reviews
• Bolivia, Brazil, Burkina Faso, Cameroon, Democratic Republic of
the Congo, Indonesia, Lao PDR, Mozambique, Nepal, Papua
New Guinea, Peru, Tanzania, Vietnam
Study approach
Pham, T.T. et al. (2013)

6. Effectiveness,
Efficiency, Equity
 Effectiveness and efficiency = priority is
to achieve carbon emission reductions
at least cost
 Equity = examines who has the right to
benefit and aspects of social
inclusiveness
 Trade-offs are involved between the 3Es
depending on the BSM approaches,
their design and how they are
implemented

7. Prevalence of effectiveness, efficiency and
equity debates in study countries
Countries Effectiveness vs.
efficiency: Benefits
should be used as an
incentive to bring
about reduction in
emissions and should
go to actors providing
these reductions
Equity discourse I:
Benefits should go
to those with legal
rights (statutory or
customary)
Equity discourse
II: Benefits
should reward
low-emitting
forest stewards
Equity discourse
III: Benefits
should
compensate
those incurring
costs
Equity discourse
IV: Benefits
should go to
effective
facilitators of
implementation
Brazil X X X X
Bolivia X X X X
Peru X X X X
Indonesia X X X X
Vietnam X X X X X
Nepal X X X X X
Lao PDR X X X X
PNG X X X X
Tanzania X X X X
Burkina Faso X X X X
Cameroon X X X X
DRC X X X X
Mozambique X X X X

8. • Only four countries (Vietnam, Indonesia, Brazil and Tanzania)
have national REDD+ programmes that regulate the
distribution of REDD+ finance
• Benefit sharing approaches tend to build upon existing
models or practices in-country
• Conflicts of interest and governance issues have delayed
implementation of REDD+ policies, and benefit sharing is
characterised by minimal interaction between sectors
• Many of the “enabling factors” identified as necessary for
achieving 3E BSMs are lacking in all countries
Study findings (1)

9. • Market-based instruments: PES (national-level mechanisms
in Brazil and Vietnam; projects implemented in almost all
countries, most notably in Latin America), CDM/CERs
• Community forestry systems: Mixed success in most
countries, Nepal and Tanzania are best known
• Fund-based approaches:
• Independent: FUNBIO (Brazil), PROFONANPE (Peru)
• Managed by State: Amazon Fund (Brazil), Reforestation Fund
(Indonesia), FONABOSQUE (Bolivia)
• Within State budget: Donor aid (Nepal, Mozambique, Vietnam)
• Forest concessions: All countries, except Tanzania
Study findings (2): Common
BSM approaches

10. Market-based
instruments (e.g. PES)
Collaborative forest
management
Fund-based models Forest concession
revenue-sharing
Effectiveness  Well-defined legal
framework and likely to be
well enforced
 Poor performance-based
measurement
 Weak monitoring of
environmental and social
impacts
Efficiency  Better performance than
traditional programmes
 Potential for domestic
financial sustainability
 High transaction costs due
to large number of buyers
and financial management
requirement
Equity  National PES programmes
also used to address
poverty reduction goals,
with mixed results
 Elite capture problem
 Payments can be very low

11. Market-based
instruments (e.g. PES)
Collaborative forest
management
Fund-based models Forest concession
revenue-sharing
Effectiveness  Well-defined legal
framework and likely to be
well enforced
 Poor performance-based
measurement
 Weak monitoring of
environmental and social
impacts
 Sustainable
implementation with
commitment and project
ownership of communities
and households
Efficiency  Better performance than
traditional programmes
 Potential for domestic
financial sustainability
 High transaction costs due
to large number of buyers
and financial management
requirement
 Higher efficiency through
increased community
control and poverty
reduction of people living
near forests
 High transaction costs due
to large numbers of
community members
Equity  National PES programmes
also used to address
poverty reduction goals,
with mixed results
 Elite capture problem
 Payments can be very low
 Difficult to achieve
equitable distribution,
State retains largest share
of revenues
 Legal framework does not
recognize customary or
community rights
 Elite capture problem

12. Market-based
instruments (e.g. PES)
Collaborative forest
management
Fund-based models Forest concession
revenue-sharing
Effectiveness  Well-defined legal
framework and likely to be
well enforced
 Poor performance-based
measurement
 Weak monitoring of
environmental and social
impacts
 Sustainable
implementation with
commitment and project
ownership of communities
and households
 Independent funds: easy to
attract funding, leakage
depends on mandate, weak
in sector coordination
 Funds within state: require
strict conditions for
additionality, strong for
sector coordination and
controlling leakage
Efficiency  Better performance than
traditional programmes
 Potential for domestic
financial sustainability
 High transaction costs due
to large number of buyers
and financial management
requirement
 Higher efficiency through
increased community
control and poverty
reduction of people living
near forests
 High transaction costs due
to large numbers of
community members
 Independent funds: lower
transaction costs
 Funds within state: low
costs only if there is well-
functioning administrative
structure
 Competitiveness increases
as REDD+ grows in volume
Equity  National PES programmes
also used to address
poverty reduction goals,
with mixed results
 Elite capture problem
 Payments can be very low
 Difficult to achieve
equitable distribution,
State retains largest share
of revenues
 Legal framework does not
recognize customary or
community rights
 Elite capture problem
 Independent funds: can
provide direct local
compensation, transparent,
potential to capture co-
benefits
 Funds within state: risk of
being used to balance state
budgets
 Elite capture problem

13. Market-based
instruments (e.g. PES)
Collaborative forest
management
Fund-based models Forest concession
revenue-sharing
Effectiveness  Well-defined legal
framework and likely to be
well enforced
 Poor performance-based
measurement
 Weak monitoring of
environmental and social
impacts
 Sustainable
implementation with
commitment and project
ownership of communities
and households
 Independent funds: easy to
attract funding, leakage
depends on mandate, weak
in sector coordination
 Funds within state: require
strict conditions for
additionality, strong for
sector coordination and
controlling leakage
 ‘Easy’ option to distribute
benefits from state-owned
forest land
 Simple forestry fee and
fixed revenue sharing
arrangements
 Potential over- of under-
payments, given
differences in opportunity
costs
Efficiency  Better performance than
traditional programmes
 Potential for domestic
financial sustainability
 High transaction costs due
to large number of buyers
and financial management
requirement
 Higher efficiency through
increased community
control and poverty
reduction of people living
near forests
 High transaction costs due
to large numbers of
community members
 Independent funds: lower
transaction costs
 Funds within state: low
costs only if there is well-
functioning administrative
structure
 Competitiveness increases
as REDD+ grows in volume
 If land tenure is not an
issue, transaction costs can
be low and large amounts
of carbon sequestered
efficiently
 Quick scale-up potential
Equity  National PES programmes
also used to address
poverty reduction goals,
with mixed results
 Elite capture problem
 Payments can be very low
 Difficult to achieve
equitable distribution,
State retains largest share
of revenues
 Legal framework does not
recognize customary or
community rights
 Elite capture problem
 Independent funds: can
provide direct local
compensation, transparent,
potential to capture co-
benefits
 Funds within state: risk of
being used to balance state
budgets
 Elite capture problem
 Favours large-scale
commercial actors
 Disadvantages local-level
 Excludes local and
marginalized people in
decision-making process,
leading to poor compliance
by communities
 Elite capture problem

14. Study findings (3):
Equity implications
• All countries lean towards allocating
benefits to those with legal rights and to
compensating those who incur costs
• Conflicts between customary and formal rights
over land are evident in almost all countries
studied
• Carbon rights are in infancy with no legal
framework
• Allocation of REDD+ benefits to reward
low emitting stewards is not a priority,
potentially marginalising sustainable forest
users

15. • Unclear and insecure land tenure creates injustice
• Under-representation of certain actors in decision-making
reduces the legitimacy of REDD+ policies
• Lessons on the enabling conditions for REDD+ are
disconnected from national decision-making
• Decentralisation can be meaningful only if it is coupled with
adequate capacity building for local government
• The scale and scope of the definition of ‘forest’ and land
tenure systems can lead to differences in the design and
implementation of REDD+ activities
Assessment of risks

16. • Study has found that there is progress … reviews to clarify
land tenure and rights over carbon; investments in
monitoring, reporting and verification systems; new agency
around the value of standing forests
• Risks can be mitigated through … improved coordination,
better enforcement; clear guidance for and monitoring of
financial flows; improved information exchange; stronger
involvement and capacity of all actors
• Can REDD+ catalyse these changes? Depends … on how costs
and benefits of REDD+ are shared, if benefits are large enough
to incentivize change of behavior and policies, and on an
inclusive process
Concluding thoughts

17. Terima Kasih!
For further information:
Pham, T.T., Brockhaus, M., Wong, G., Dung, L.N., Tjajadi, J.S., Loft, L., Luttrell C. and
Assembe Mvondo, S. (2013) Approaches to benefit sharing: A preliminary
comparative analysis of 13 REDD+ countries. Working Paper 108. CIFOR, Bogor,
Indonesia . http://www.cifor.org/online-library/browse/view-
publication/publication/4102.html