Stringent conditions to be met before Norway $$ released

Transparency and accountability are key issues in the forest preservation deal between Guyana and Norway with this country required to take action in this regard before any money is disbursed.
Guyana and Norway on Monday inked an agreement that will see Oslo paying US$30 million ($6.2 billion) next year and potentially up to a total of US$250 million ($51.7 billion) by 2015 for this country to preserve its forests. Under the partnership, Guyana will accelerate its efforts to limit forest-based greenhouse gas emissions and protect its rainforest as an asset for the world. Norway will provide financial support to Guyana at a level based on this country’s success in limiting emissions. This will enable Guyana to start implementing its Low Carbon Development Strategy (LCDS) at scale.

However, before any money is disbursed Guyana will have to take formal steps to establish independent forest monitoring by a credible, independent entity. Additionally, it will have to show evidence of entering a formal dialogue with the European Union with the intent of joining its Forest Law Enforcement, Governance and Trade (FLEGT) processes towards a Voluntary Partnership Agreement (VPA). Government also has to show evidence of its decision to enter a formal dialogue with the Extractive Industries Transparency Initiative (EITI) or an alternative mechanism agreed by Guyana and Norway to further the same aim as EITI.

It was emphasized that financial support will be linked to Guyana’s success in limiting greenhouse gas emissions from deforestation and forest degradation and establishing institutions and practices to strengthen Guyana’s ability to reduce deforestation and forest degradation through the adoption and implementation of a REDD+ governance development plan (RGDP). The Plan will address several key issues. The concept of REDD+ refers to forest countries being paid to preserve their forests. REDD refers to reducing deforestation from deforestation and forest degradation.

According to the Joint Concept Note on the agreement, transparency and accountability are key to success in any REDD+ effort. In the governance development plan, REDD+ relevant decisions and data should be publicly available, it says adding that Guyana recognizes the need to demonstrate international standards, and therefore aims to implement a system for Independent Forest Monitoring (IFM).

The Plan has to include several other points including the development of a system for reporting on the multiple benefits of REDD+, including on measures to protect biological diversity, improved livelihoods, good governance, and how the Constitutional protection of the rights of indigenous peoples and local communities are facilitated within the framework of Guyana’s REDD+ efforts.

Additional requirements are the development of a national, inter-sectoral, land use planning system; the development of valuation systems for determining the costs and benefits of different alternatives and courses of action on the forest resource; a strengthened forest monitoring and control system, focusing on all significant drivers of deforestation and degradation, including logging, mining and agriculture activities on forest lands;  and establishment of criteria for identifying priority areas for biodiversity within Guyana’s forests, to inform the overall land use planning system and especially the REDD-plus component of the LCDS.

Further, the Plan must also include the development of a multi-year programme  to continue the process of titling, demarcation, and extension of Amerindian lands when requested to do so by Amerindian communities, with the aim of completing the process for outstanding requests; the development of the mechanisms by which distribution of REDD+ funds will occur, as set out in the LCDS (the distribution system will be publicly available and will be reported on annually); an overview of all funding directed to activities relevant to REDD+/LCDS efforts in Guyana shall be made public and be updated on the LCDS website, in order to ensure maximum effectiveness of the funds and to provide transparency concerning contributors to Guyana’s REDD+/LCDS efforts; and the mandating and where appropriate establishment of operational institutions tasked with and given authority to implement and coordinate strategic activities of the LCDS as well as Guyana’s REDD+ plans as part of the LCDS.
The Plan must also address the continuation of the institutionalized, transparent, multi-stakeholder processes to ensure that grievances can be addressed as an intrinsic part of Guyana’s ongoing REDD+ efforts.
The Memorandum of Understanding signed by the two countries  outlines three “pillars of cooperation” and these are a regular, systematic policy and political dialogue to facilitate a constructive exchange of views on global climate change and relevant environmental issues such as biodiversity; collaboration, knowledge building, and sharing of lessons learned within the field of sustainable, low-carbon development, with REDD+ as the key component of this; and collaboration on REDD+, including establishing a framework for financial support from Norway into a Guyana REDD+ Investment Fund (GRIF).

The GRIF will be a multi-contributor financial mechanism run by a reputable international organization. It will be designed to channel results-based REDD+ funds from Norway and other potential contributors to the implementation of Guyana`s LCDS. Safeguards as well as fiduciary and operational policies of the organization selected will apply as appropriate to all activities to be financed by GRIF. The mechanism will also ensure full national and international oversight of financial flows. The GRIF could over time evolve to cover all types of climate change mitigation and adaptation funding, including if appropriate funding received under the United Nations Framework Convention on Climate Change. The GRIF must be operational before any contributions can be disbursed from Norway.

The level of support will depend on Guyana’s delivery of results as measured against two sets of indicators namely; Indicators of enabling activities which refers to a set of policies and safeguards to ensure that REDD+ contributes to the achievement of the goals identified; and REDD+ Performance Indicators which refers to a set of forest-based greenhouse gas emissions-related indicators. These indicators will gradually be substituted as a system for monitoring, reporting and verifying emissions from deforestation and forest degradation (MRV) in Guyana is established. A timeframe for when and how this will happen will be established in 2010.

Under the indicators of enabling activities it was agreed that the commencement and annual continuity of financial support from Norway will depend on progress regarding seven factors. These are the Strategic Framework whereby all aspects of Guyana’s planned efforts to reduce deforestation and forest degradation, including forest conservation, sustainable management of forests and enhancement of forest carbon stocks are developed in a consistent manner, through an internationally recognized framework for developing a REDD+ programme, and will continue to evolve over time. Furthermore, all REDD+ efforts will at all stages be fully integrated in the LCDS. The contributions to Guyana’s REDD+/LCDS from Norway and other contributors, including the Forest Carbon Partnership Facility, will be administered in a transparent manner. Information concerning all expenditures, both planned and implemented, will be publicly available.

Another factor is a continuous multi-stakeholder consultation process whereby  the LCDS, including the REDD+ strategy and prioritized LCDS funding needs, will continue to be subject to an institutionalized, systematic and transparent process of multi-stakeholder consultation, enabling the participation of all potentially affected and interested stakeholders at all stages of the REDD+/LCDS process. Particular attention will be given to the full and effective participation of indigenous peoples and other forest-dependent communities.  The consultation process will continue to be observed and reported on by an expert team appointed jointly by Guyana and Norway.

Forest governance
The development of forest governance will also be looked at with independent assessments of current forest governance and logging practices in Guyana, in addition to relevant legislation, policies and processes, forming the basis for the continued development of a transparent, rules-based, inclusive forest governance, accountability and enforcement system. An outline of Guyana’s REDD+ governance development plan will be prepared by the end of 2009 while a more detailed plan will be developed by October 2010, with clear requirements and timelines for its implementation. The development plan will be subject to review by an independent institution, jointly designated by the two countries

The financial mechanism, the GRIF is another factor while an MRV is another. The MRV-system must provide the basis for reporting in accordance with the principles and procedures of estimation and reporting of carbon emissions and removals at the national level as specified by the IPCC Good Practice Guidelines and Guidance for reporting on the international level, as well as meeting the particular data needs of the national RGDP. Establishing a status quo/baseline database on the Guyanese forest sector, including assessments of historical and current deforestation rates at the latest by October 2010, will be a first priority.

The sixth factor is the rights of indigenous peoples and other local forest communities as regards REDD+ while the final one is Annual assessment and verification whereby annual independent overall assessments will be conducted by one or more neutral expert organizations, to be appointed jointly by the two countries in consultation with the international financial institution managing the GRIF, on whether or not the REDD+ enablers have been met; and what results Guyana has delivered according to the established indicators. A neutral expert organization will also provide an annual status report for the Governments of Norway and Guyana. In this status report, the organization will outline its independent assessment of all participants in the REDD+ process, and make recommendations for process and capability improvements.

On REDD+ performance indicators, in the absence of an operational MRV-system for emissions or removals of carbon from Guyana’s forest sector, a set of basic interim indicators will be used to assess Guyana’s performance. As a more sophisticated forest carbon accounting-system is implemented, these basic indicators will be gradually phased out. Until a UNFCCC methodology is established, the maximum sum of results-based financial support from Norway (and others) to the GRIF will be determined utilizing five elements. Among these is an interim carbon price of US$5 per ton of carbon dioxide.
The maximum level of support for results achieved in 2009 will be calculated based on historical data as estimated by FAO and for indicators of enabling activities for 2009. Subsequent annual assessments will cover the period from 1 October until 30 September in the two years preceding the relevant budget year, unless otherwise agreed by the two countries.
According to an illustration in the document, the maximum level of financial support based on results achieved in 2009 would be US$41,287,500 based on the interim carbon price of US$5/t CO2.
It was stated that Norwegian support to GRIF – alone or in combination with other contributors – will not exceed the sum calculated on the basis of outlined methodology (neither in 2010 nor in future years). It is a goal of the two countries to get others to join the partnership in order to make it sustainable in the long term, as it is unlikely that Norwegian support will ever equal this sum

It was agreed that the financial support seeks to provide incentives to avoid future deforestation, and the interim reference level has been established accordingly. While financial support will continue to be based on this reference level, Norwegian financial support from 2011 onwards is also dependent on no national-level increase in deforestation, compared to an agreed level that should be close to historical levels. This level will be set through a mutually agreed process no later than October 2010.

The activities for the remainder of this year and next year include the establishment of an MRV system; a Project Management Office and Office of Climate Change (operational costs); Multi-stakeholder consultation process; Annual verification by neutral experts that the REDD-plus enabling activities have been completed as appropriate;  Annual verification by neutral expert(s) of the maximum amount due to Guyana according to the indicators for REDD-plus performance; and the establishment of a system for Independent Forest Monitoring .

It was noted that REDD+ is a new concept, and the partnership is in the forefront of developments, and while the two countries agree that the Joint Concept Note clearly lays out their agreed positions as of November 2009 – they will also be open to revising and further developing its content to reflect increased insights as the Partnership, and other related efforts, moves forward and lessons are learned.

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