OVERVIEW OF CLIMATE CHANGE FINANCING MECHANISMS IN CAMBODIA, LAO PDR, THAILAND, AND VIETNAM

Patricia Gorin, FAO Rome Vientiane, 29 Aug 2011

Carbon markets (CDM and voluntary)

Private sector

Plans and Strategies:

Development of a National Green Growth

Roadmap (2009)

Assist with national policy development,

awareness raising and

project identification

Climate strategies &

programmes to mainstream low-

carbon and environmental

practices

National Strategic

Development Plan (NSDP) for

2010–2013. Unclear

procedure, timeline, and

resources

Community Based Disaster Risk Reduction

Strategy for Flood and

Drought (2007 – 2012)

Cambodian Climate Change Alliance (CCCA)

Despite SLM and SFM being a priority for the Cambodian government, it has been managed in a fragmented way, with limited coordination and collaboration

Diverse financing:

•Strategic Programme for Climate Resilience (SPCR) (2010-2012)

World Bank (WB) and Asian Development

Bank (ADB)

•Support: sustainable livelihoods• climate adaptation & mitigation

strategies• biodiversity conservation

Global Environment Facility (GEF) and UNDP Trust Fund

Cambodia is among the most forested countries in Southeast Asia. Approximately 59% of its land is covered with forests (10.7 million ha)

2008: one of the first countries in the region to address REDD+ with pilot activities

National target: maintaining 60% forest cover, one of the main objectives of the Royal Government of Cambodia‘s Rectangular Strategy

Cambodia’s final REDD+ Readiness Preparation Proposal (R-PP) was submitted to the Forest Carbon Partnership Facility (FCPF) in March 2011. Total commitments (June 2011 – May 2014): US$ 10,905,000

REDD mechanism is an answer to strengthen institutional capacity, sustainable financing and engagement with local communities

Innovative financing mechanism which is increasing, but still new and long methodology development, lack of knowledge, etc.

Need to strengthen country ownership by government of local organizations

• Two REDD projects on the ground: involvement of private sector developers as well as NGOs, government and the community

Voluntary Market

• January 2006: 1st CDM project approved• May 2011: 4 other CDM projects

registered

Clean Development Mechanism

LAO PDRLAO PDRPlans and Strategies:

2009-2020: National

Strategy and its Action Plan

on Climate Change (NSCC)Capacity

implementation of adaptation and mitigation

actions

National Appropriate Mitigation

Action (NAMA) to be

developed

Nov 2008 - Oct 2011: Second

National Communication on Climate

Change

CC awareness, mainstreaming

& capacity building,

strengthening policies &

institutions

LAO PDRLAO PDR3 major National State Funds related to NRM:

The Poverty Reduction Fund (PRF) (2006): financially autonomous organization ( WB, SDC). Finance small-scale infrastructure and services to

strengthen local capacity

The Environmental Protection Fund (EPF) (GoL 2005): autonomous organization (WB, ADB) strengthen environmental protection, sustainable NRM, biodiversity conservation and community

development

The Forestry and Forest Resource Development Fund (FRDF) (MAF 2005): management of Protected Forest Areas and National Biodiversity Conservation Forests

LAO PDRLAO PDRDiverse financing:

• Programme-based approach projects in agriculture, conservation and poverty reduction

The Agro-Biodiversity

Initiative (TABI) (GoL, SDC 2009-

2011)• projects to improve agricultural

productivity (sustainable use of NR) and build the capacity of Government

The Asian Development Fund (ADF) (2010-2017)

• Capacity Enhancement for Coping with Climate Change

The Asian Development Bank (ADB) (2010-2013)

• Improving the Resilience of the Agriculture Sector in Lao PDR to Climate Change Impacts (2010-2014)

Least Developed Countries Fund

(LDCF)

• Climate Adaptation and Mitigation Strategies USAID, GIZ, UNEP

UN REDD in LAO PDRUN REDD in LAO PDR

Forestry Strategy 2020 and the National Action Plan and Strategy on GHG Emission Mitigation: long-term target of increasing national forest cover from currently ca. 40 to 70%.

3 REDD+ projects are currently active in the country

Carbon MarketsCarbon Markets

Voluntary Market

• One project registered, 4 projects approved, 3 projects at validation stage, 7 projects at preparation stage

Clean Developme

nt Mechanism

(CDM)

• Information sharing increase between the GoL and the private sector to develop forest carbon projects

• Government supports the creation of comprehensive legal framework

Low funding in CC issues

Need to strengthen institutional capacity, coordination and cooperation within the different sectors

Support international

cooperation to achieve

sustainable development

Nov 2000: 1st National

Communication

Feb 2011: 2nd National

Communication

11th National Economic and

Social Development Plan (2012-2016): low

carbon economy

Master Plan on Climate

Change (2010-2019)

participation of all sectors (public and

private)

Adapt to CC impacts and

promote GHG mitigation activities

Plans and Strategies:

•Direct and indirect investments in renewable energy and energy efficiency.

The Clean Technology Fund (CTF)

Investment Plan (Jun 2011- Dec 2016)

Diverse financing:

•To analyze and design GHG trading programsWorld Bank grant

•locally-based climate risk reduction activities, embedded in the national disaster management

The Global Environment Facility (GEF) Special Climate Change Fund (SCCF)

•Natural Resources Management, GHG reductions

The UNEP / GEF’s Special Grant

Programme (SGP)

•for Operations to Promote Tropical Forests: small-scale community forest management

Small Grants Programme (SGP)

Diverse financing:

• is financing Climate Risk Management Assessment for Agriculture in Thailand

The Asian Development

Bank (ADB), SGP for adaptation

•Strengthen national and local capacity for mainstreaming biodiversity

The GEF Trust Fund (Jun 2011-

Jun 2015)

Proposal of a voluntary fund for payments towards supporting REDD.

Thailand is willing to develop a REDD national strategy and adopt a comprehensive REDD Readiness Plan (R-PP) by August 2012

Estimated costs of REDD interventions: US$ 13.74 million

Voluntary Market

• The TGO promote also the CDM• 46 registered CDM projects and

131 projects approved

Clean Developme

nt Mechanism

(CDM)

• The Thailand Greenhouse Gas Management Organization (TGO, 2008) is actively working to develop a voluntary carbon market

Action Plan Framework for

Adaptation to CC in the Agriculture

& Rural Development Sector (2008-

2020)

National Strategy for

Disaster Prevention,

Response and Mitigation 2020

(adopted in 2008)

assess CC impacts, low-

carbon economy

Plans and Strategies:

Diverse financing:

•US$ 3.195 billion (government, MDB, carbon finance and private sector)

The Clean Technology Fund (CTF)

Investment Plan (2010- 2013)

•6-years project conservation of biodiversity

The governments of Vietnam, Finland and

the Netherlands (grants), the WB

(credit)•sustainable forest management;

and ADB Small Grant for Adaptation Project

ADB’s Trust Fund for Forests (2006-2014)

•enhance rural livelihood opportunities, strengthening capacity of water-related service providers

ADB, and the “Agence Française de

Développement”

Diverse financing:

•Climate Adaptation and Mitigation Strategies (biodiversity conservation). 2010-2014. US$ 34,000,000

United States Agency for

International Development

(USAID)

•climate-resilient development planning and biodiversity

GEF’s SCCF (2010-2014) and GEF

Trust Fund

3 major National Trust Funds

The Vietnam Environmental Protection Fund (VEPF)

The Vietnam Conservation Fund (VCF) funded by GEF, EC

The Trust Fund for Forests, and Forest Protection and Development Fund (FPDF)

REDD+ activities outlined in the Readiness Preparation Plan. 2010-2013. US$ 3,619,000

Potential revenues from REDD+: about US$ 80-100 million per year

JICA, EU and the Finland-FAO Forest Partnership are assisting Vietnam to fully utilize its REDD+ potential

ChallengesChallenges -inconsistency in forest definition, - land use classification , - insufficient capacity for MRV, - lack of coordination for data discrepancy and sharing, and insufficient financing support

Voluntary Market

• Increasing number of CDM projects: 34 CDM projects registered

• Vietnam ranks 11th globally in registered CDM project quantity and 8th in issued CERs amount

Clean Development Mechanism

(CDM)

• Private sector increasing interest in developing forest carbon projects

Numerous CC financing in Vietnam

Need to address the legal issues related to land tenure, speed up the REDD+ implementation process, and take full ownership of the multiple CC related initiatives in the country.

Patricia Gorin

Climate Change and Environment Officer

FAO Rome, Investment Centre (TCID)

[email protected]