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Finance vs.

Verification?

Key issues in REDD+ verification Michael Dutschke

SBSTA 38, CIFOR Side Event: REDD+ performance and verification: some

insights from CIFOR’s global comparative study

Bonn, 5 June 2013

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The Doha impasse

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Aims and scope

• 1. What are the key issues in the

verification discussion in the UNFCCC?

• 2. Who are the key actors and what are

their motivations on the issues?

• 3. What are the options for resolving the

issues?

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Financing

• REDD+ is not linked to a particular finance mechanism

• With REDD+ being part of their NAMAs, developing countries claim an adequate and predictable flow of funds (UNFCCC 4(1))

• REDD+ funding shall be “new and additional”

• States report REDD+ finance as ODA

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Financing

• Many bi-/multilateral agencies with

specific rules & criteria

• No long-term finance committed

• Voluntary REDD+ activities: High

transaction costs, low demand volume,

uncertain insertion into future REDD+

agreement

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Reporting duties

Type of reporting Frequency Verification

Nationally Appropriate

Mitigation Commitments or

Actions (AI)

IAR - International

Assessment and

Review

National Appropriate

Mitigation Actions (non-A)

ICA - International

Consultation & Analysis

National Communication

(all Parties)

4 years (all Parties)

GHG Inventory Report Annual (AI)

Biennial Progress Report

on progress in achieving

emission reductions

2 years (AI)

Biannual Update Report 2 years (all Parties)

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Financing & Verification

• Reporting duties are split between Annex I

and non-Annex countries

• Diverging procedures for processing country

reports (IAR/ICA)

• REDD+ activities are mainly ODA funded

• REDD+ verification recalls aid conditionality

• Why should REDD+ fulfill higher verification

requirements than other NAMAs?

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Phased approach

• Phase I: REDD+ readiness building

• Phase II: Results-based demonstration

activities

• Phase III: Results-based actions

In Cancún, all Parties agreed on

VERIFICATION for Phase III

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Bilateral verification

• In bilateral REDD+, including UN-

REDD and FCPF programs,

verification is standard

• In voluntary REDD+, verification is

standard procedure (VCS)

• Donors are interested in aid or

investment effectiveness

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What are we talking about?

• Verification as discussed in the

Guidelines for REDD+

– only relates to UNFCCC programs,

like the Green Climate Fund

– only in Phase III

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Main actors

Norway

• Representing

most developed

country Parties

Brazil

• Representing

G77 & China

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Intervening issues

• Annex I discontent with ICA

• Non-Annex discontent about long-term perspective of REDD+ policies

• Non-Annex concern about increased NAMA accountability resulting from the REDD+ debate

• Different opinions on REDD+ funding principles (market-linked or strictly non-market)

• Underlying differentiation between advanced and less-developed non-Annex countries

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REDD+ accounting details

• Forest definitions for REDD+

• Attribution and accounting between

national and subnational REDD+

• Measurement uncertainties

• Reference levels (trend-based / modeled /

variable-adjusted)

• Double-counting / REDD+ Registries

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REDD+ accounting risks

Risk Response

Inconsistency between national

inventories and REDD+ reporting

National-level REDD+ verification

takes into consideration NC or BUP

Double counting at national level under

a nested approach

Clear national benefit sharing in place

Insufficient measurement capacities Offer incentives for moving to a higher

IPCC tier level

RL is overstated Offer incentives to perform a voluntary

UNFCCC technical assessment

Effects of activity overstated Stringent ICA reviews

Double counting at global level Centralized REDD+ registry

Manipulated reporting Establish a process as stringent as the

IAR for Annex I countries or introduce

a separate REDD+ verification process

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Solutions

First-best

• ICA for developing

countries as stringent as

IAR for Annex-I

countries

• Building up capacities

for reviewers and

reporters

Second-best

• Avoid conflicting terms “review” and “verification”

• REDD+ Effectiveness Assessment

• REA carried out by – FCCC Roster of Experts

– Peers

– Third parties

– Optional approach

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Resume

• REDD+ is becoming an ODA mechanism

• Verification is a generally agreed procedure for results-based action

• Bilateral activities are ruled by contractual law anyway, including MRV procedures

• Verification rules are only needed for UNFCCC multilateral funding (GCF) in Phase III

• Environmental integrity goes beyond verification

• Room for provisional, experimental rules

• REDD+ Effectiveness Assessment as a bridge

• In the absence of clear procedures, there will be further fragmentation of REDD+ finance

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Thank you for your attention

Michael@biocarbon.net