Jonah Busch, Ph.D. (Conservation International)Finance Learning Event -- Global Environment Facility
CIFOR Forest Day 3UNFCCC COP 15
Copenhagen, Denmark, December 13, 2009
Based on:
•Busch, J., Strassburg, B., Cattaneo, A., Lubowski, R., Bruner, A., Rice, R., Creed, A., Ashton, R., Boltz, F. (2009). Comparing climate and cost impacts of reference levels for reducing emissions from deforestation. Environmental Research Letters, 4:044006.
•Busch, J., Godoy, F., Turner, W., Rao, N., Harvey, C. (in review). Co-benefits of REDD: Poverty alleviation, biodiversity conservation and clean water provision.
•Busch, J., Bruner, A. (2009). An investment strategy for the Tropical Forest Account in Global Environment Facility – 5.
Supplementing REDD+ with finance for multiple forest services
Multiple forest benefits(canopy photo) biodiversity
localclimate
regulation
non-timberforest
products
clean water
food
soil formation
pollination
tourism
timber
fuel
cultural valuesmedicine
stormprotection
slopestabilization
livelihoods
GLOBALCLIMATE
REGULATION
$(REDD+)
Multiple forest benefits(canopy photo)
GLOBALCLIMATE
REGULATION
biodiversity
localclimate
regulation
non-timberforest
products
clean water
soil formation
pollination
tourismfuel
cultural valuesmedicine
stormprotection
slopestabilization
foodtimber
livelihoods
$(REDD+)
Multiple forest benefits(canopy photo)
GLOBALCLIMATE
REGULATION
biodiversity
localclimate
regulation
non-timberforest
products
clean water
soil formation
pollination
tourismfuel
cultural valuesmedicine
stormprotection
slopestabilization
foodtimber
livelihoods
$(REDD+)
To what extent would REDD+ enhance biodiversity conservation?
Multiple forest benefits(canopy photo)
GLOBALCLIMATE
REGULATION
biodiversity
localclimate
regulation
non-timberforest
products
clean water
soil formation
pollination
tourismfuel
cultural valuesmedicine
stormprotection
slopestabilization
foodtimber
livelihoods
$(REDD+)
$(biodiversity)
To what extent would REDD+ enhance biodiversity conservation?How to pay for additional forest biodiversity in the context of REDD+?
Multiple forest benefits(canopy photo)
GLOBALCLIMATE
REGULATION
biodiversity
localclimate
regulation
non-timberforest
products
clean water
soil formation
pollination
tourismfuel
cultural valuesmedicine
stormprotection
slopestabilization
foodtimber
livelihoods
$(REDD+)
$(biodiversity)
To what extent would REDD+ enhance biodiversity conservation?How to pay for additional forest biodiversity in the context of REDD+?
To what extent would paying for biodiversity enhance climate mitigation?
Supplemental finance options forbiodiversity and other forest services
1. Buyers interested in biodiversity voluntarily purchase additional REDD+
2. Existing REDD+ buyers pay a premium for carbon from biodiverse forests (e.g. CCBA/CARE Social and Environmental Standards for REDD+)
3. Bundling of payments for carbon by REDD+ buyers, payments for biodiversity from biodiversity buyers (e.g. GEF)
i. fund pays for reductions in countries’ biodiverse forests; countries sell resulting carbon abatement to the REDD+ mechanism
ii. fund buys carbon abatement from countries’ biodiverse forests above market price; resells to REDD+ mechanism at market price
iii. REDD+ mechanism pays for countries’ carbon abatement; fund pays for countries’contribution to biodiversity conservation
Modeling REDD with OSIRIS(Busch et al, Env Res Letters, 2009)
• 84-country partial equilibrium model• National incentives based on reference
levels• Leakage • Country-by-country outputs:
-deforestation (Ha/yr)-emissions (ton CO2e/yr)-revenue ($/yr)
• Caveat: Designed to compare climate and cost impacts across REDD policy designs, rather than to predict absolute magnitudeof impacts
• New output: Estimated rate of extinction of endemic forest-dwelling mammal and amphibian species, as predicted by species-area relationship
www.conservation.org/osiris
REDD+ reduces emissions from deforestationand extinction rate of forest species
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100%
$- $5,000,000,000 $10,000,000,000 $15,000,000,000
Rat
e w
ith R
EDD
as
% o
fra
te w
ithou
t RED
D
Total Annual Finance
REDD+ MECHANISM
1. ADDITIONAL REDD+ PURCHASES
2. PREMIUM FOR BIODIVERSITY = 5%
3. BUNDLED PAYMENTS FOR BIODIVERSITYEMISSIONS
EXTINCTIONS
Purchasing additional REDD+ slightlyreduces extinction rate of forest species
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$- $5,000,000,000 $10,000,000,000 $15,000,000,000
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ith R
EDD
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% o
fra
te w
ithou
t RED
D
Total Annual Finance
REDD+ MECHANISM
1. ADDITIONAL REDD+ PURCHASES
2. PREMIUM FOR BIODIVERSITY = 5%
3. BUNDLED PAYMENTS FOR BIODIVERSITYEMISSIONS
EXTINCTIONS
Premium for biodiversity substantiallyreduces extinction rate of forest species
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$- $5,000,000,000 $10,000,000,000 $15,000,000,000
Rat
e w
ith R
EDD
as
% o
fra
te w
ithou
t RED
D
Total Annual Finance
REDD+ MECHANISM
1. ADDITIONAL REDD+ PURCHASES
2. PREMIUM FOR BIODIVERSITY = 5%
3. BUNDLED PAYMENTS FOR BIODIVERSITYEMISSIONS
EXTINCTIONS
Bundled payments for biodiversity substantially reduce extinction rate of forest species
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$- $5,000,000,000 $10,000,000,000 $15,000,000,000
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e w
ith R
EDD
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% o
fra
te w
ithou
t RED
D
Total Annual Finance
REDD+ MECHANISM
1. ADDITIONAL REDD+ PURCHASES
2. PREMIUM FOR BIODIVERSITY = 5%
3. BUNDLED PAYMENTS FOR BIODIVERSITYEMISSIONS
EXTINCTIONS
Biodiversity payments attract additional carbon payments
Biodiversity value (endemic species/ha)Relative to opportunity cost ($/ha)
Car
bon
valu
e (G
tCO
2e/h
a)R
elat
ive
to o
ppor
tuni
ty c
ost (
$/ha
)
C combined REDDand biodiversity
payments sufficientto conserve
forest
Bbiodiversitypaymentssufficient
toconserve
forest
AREDD payments sufficient to
conserve forest
Biodiversity payments catalyzeadditional carbon payments
0%
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100%
$- $5,000,000,000 $10,000,000,000 $15,000,000,000
Rat
e w
ith R
EDD
as
% o
fra
te w
ithou
t RED
D
Total Annual Finance
REDD+ MECHANISM
1. ADDITIONAL REDD+ PURCHASES
2. PREMIUM FOR BIODIVERSITY = 5%
3. BUNDLED PAYMENTS FOR BIODIVERSITYEMISSIONS
EXTINCTIONS
$0.5B $1.0B $1.4BFinance for biodiversity: $0.2B
Example of bundled payment:Forest Incentive Mechanism in GEF-5•Formerly Tropical Forest Account (TFA) in GEF-4
•Attends to three international conventions (FCCC, CBD, CCD)
•Objective: achieve multiple global environmental benefits from the management of all types of forests and strengthen sustainable livelihoods for people dependent on forest resources.
•~$180-400 million in GEF-5
•Expected to leverage further $700-1000 million from GEF STAR balances, plus additional leveraging
•Design under development
•For more information: Gustavo da Fonseca or Dirk Gaul
Concluding MessagesREDD+ expected to reduce emissions from deforestation and reduceextinction rate of forest species
Either premiums (e.g. CCBA/CARE SES) or bundled payments(e.g. GEF) could substantially reduce extinction rates further
Either premiums or bundling for multiple forest services would:
- lower price paid by REDD+ buyers- increase price paid to REDD+ sellers - attract additional carbon payments- lead to additional reductions in emissions from deforestation
Thank you!
Based on: Busch, J., Strassburg, B., Cattaneo, A., Lubowski, R., Bruner, A., Rice, R., Creed, A., Ashton, R., Boltz, F. (2009). Comparing climate and cost impacts of reference levels for reducing emissions from
deforestation. Environmental Research Letters, 4:044006.
Busch, J., Godoy, F., Turner, W., Rao, N., Harvey, C. (in review). Co-benefits of REDD: Poverty alleviation, biodiversity conservation and clean water provision.
Busch, J., Bruner, A. (2009). An investment strategy for the Tropical Forest Account in Global Environment Facility – 5.
[email protected]://www.conservation.org/osiris
Global Environment FacilityCenter for International Forestry Research
Environmental Defense FundWoods Hole Research Center
University of East AngliaTerrestrial Carbon Group
Private gift to Conservation InternationalGordon and Betty Moore Foundation
Norwegian Agency for Development Cooperation
Finer scale of biodiversity metricreduces extinctions
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100%
$- $5,000,000,000 $10,000,000,000 $15,000,000,000
Extin
ctio
ns w
ith R
EDD
as
% o
f ex
tinct
ions
with
out R
EDD
Total Annual Finance
REDD+ MECHANISM
ADDITIONAL REDD+ PURCHASES
BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA (Continental)BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA (Regional)BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA (National)
More precise biodiversity metricreduces extinctions
•Top 20% endemic species•Number of forest endemic species (Indonesia, Brazil, Mexico, Madagascar, PNG…)•Endemic species per hectare of forest (Haiti, Jamaica, Sri Lanka, Cuba, Madagascar…)
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$- $5,000,000,000 $10,000,000,000 $15,000,000,000
Extin
ctio
ns w
ith R
EDD
as
% o
f ex
tinct
ions
with
out R
EDD
Total Annual Finance
REDD+ MECHANISM
ADDITIONAL REDD+ PURCHASES
BUNDLED PAYMENTS FOR BIODIVERSITY (bonus payment for 20% most endemism)BUNDLED PAYMENTS FOR BIODIVERSITY (bonus payment for 20% most endemic/ha)BUNDLED PAYMENTS FOR BIODIVERSITY (payment proportional to endemism)BUNDLED PAYMENTS FOR BIODIVERSITY (payment proportional to endemics/ha)
Supplemental finance options forbiodiversity and other forest services
1. Additional voluntary purchases of REDD+
2. Premium from existing REDD+ buyers for carbon from biodiverse forests (e.g.CCBA)
3. Bundling of payments for carbon, biodiversity (e.g. GEF)
i. fund pays for reductions in countries’ biodiverse forests; countries sell resulting carbon abatement to the REDD+ mechanism
ii. fund buys carbon abatement from countries’ biodiverse forests above market price; resellsto REDD+ mechanism at market price
iii. REDD+ mechanism pays for countries’ carbon abatement; fund pays for countries’contribution to biodiversity conservation
REDD+ForestsBiodiversity
Fund
Forests
Forests REDD+Biodiversity
Fund
Forests BiodiversityFund REDD+
Forests
REDD+Biodiversity
Premium
REDD+Biodiversity
Fund
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100%
$- $5,000,000,000 $10,000,000,000
Rat
e w
ith R
EDD
as
% o
fra
te w
ithou
t RED
D
Total Annual Finance for REDD
Deforestation (ha)
Emissions (GtCO2e/yr)
Extinctions (species/yr)
Co-benefit of REDD: Paying for forests’ carbon reduces extinction rate of forest species
(Busch et al, in review)
Finer geographic scale for biodiversity metric generates greater reduction in extinction rate
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$- $5,000,000,000 $10,000,000,000 $15,000,000,000
Extin
ctio
ns w
ith R
EDD
as
% o
f ex
tinct
ions
with
out R
EDD
Total Annual Finance
REDD+ MARKET
ADDITIONAL REDD+ PURCHASES
BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA (Continental)BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA (Regional)BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA (National)
BUNDLED PAYMENTS FOR ENDEMIC SPECIES/HA(Sub-national)?
?