Whilst the Cancun Agreement text remains a high point in the development of an international REDD+ mechanism, there is one big caveat. Following long and eventually unresolved arguments over the sources of finance for REDD+, the Cancun Agreement tasked the negotiators at Durban to resolve this. Earlier in the year, a REDD+ working group was convened under the UNFCCC negotiation process to consider this in the build up to Durban - particularly the financing options for the full implementation of the results-based actions.
Tony le Vina, the successful chair that has assisted the development of consensus text at both Copenhagen and then at Cancun, chairs this work stream. The last set of full discussions on this topic before Durban was held in Panama in September. The Norton Rose Group has been involved in these discussions though a variety of forums. Our interest, along with many others, is to understand what these discussions and any resulting decision means for the private sector. In particular, what signals will be made to indicate that there is a role for ethical investors prepared to support REDD+ activities - whether as a component of an international carbon market or via a variety of other means by which the financial strength of the private sector can be leveraged. This was often at the heart of the disagreements at Cancun with some countries, such as Bolivia, having strong views that the private sector should have no role in REDD+ finance, particularly via a carbon market mechanism.
Some of the themes that came out at the Panama discussions included:
- a number of countries expressing support for REDD+ finance coming from a variety of sources, including the private sector;
- numerous countries also supporting that a decision on REDD+ financing should happen at Durban - although some countries are concerned with progress on REDD+ getting too far ahead of other negotiating streams; and
- that there is strong support for a dedicated funding window for REDD+ under the Green Climate Fund that is intended to be further progressed at Durban.
On the basis of these discussions the chair of the working group has issued a non-binding text for countries to use to frame their comments before Durban. This does not prescribe any particular solution but rather outlines the different elements that could be included in a text by:
- noting the various sources discussed (such as public funds, Green Climate Fund, existing multilateral and bilateral channels, market-based mechanisms and a flexible combination of such funds and market-based sources); and
- laying out placeholders for other text relating to elements such as the need for different types of finance for different phases of REDD+, linkages to the technical work being undertaken (discussed further below) and other financing instruments being developed under the UNFCCC discussions.
Countries are now currently developing submissions on this in order to try and resolve the broad principles of REDD+ finance.