'About that $3.5 billion...'

REDD fans will recall that one of the key achievements for REDD at Copenhagen came with the announcement by Norway, Japan, the United States, Britain, France and Australia that they would be providing $3.5 billion of support for REDD over the next 3 years. The statement read as follows:

“Actions to reduce emissions from forests can help to stabilize our climate, support livelihoods, provide biodiversity conservation, and promote economic development. As part of an ambitious and comprehensive deal, we recognise the significant role of international public finance in supporting developing countries’ efforts to slow, halt and eventually reverse deforestation. With this in mind, we collectively dedicate USD3.5 billion of fast-start climate change financing for ‘REDD+’ over the 2010 to 2012 period. We regard this as an initial investment in developing countries that put forward ambitious REDD+ plans and that achieve forest emission reductions according to their respective capabilities. We collectively commit to scaling up our finance thereafter in line with opportunities and the delivery of results. We invite other donors to join us in this effort to make early action on REDD+ a reality.”

The above pledge, of course, was followed several days later by REDD's inclusion in the Copenhagen Accord:

"We recognize the crucial role of reducing emission from deforestation and forest degradation and the need to enhance removals of greenhouse gas emission by forests and agree on the need to provide positive incentives to such actions through the immediate establishment of a mechanism including REDD-plus, to enable the mobilization of financial resources from developed countries."

The Accord went on to make reference to "substantial finance to reduce emissions from deforestation and forest degradation (REDD-plus)" which "shall be provided to developing countries."

Together, the Accord and the $3.5 billion pledge offer strong evidence that REDD is here to stay. Not a bad result overall, though certainly not all that REDD supporters had been hoping for (namely, an overall agreement including global targets and timeframe for reducing / halting deforestation, financing commitments, safeguards, etc.).

It may be useful now to think of two REDD tracks, both of which run back into the past as well as ahead into the future. On one of the tracks, the long-term arrangements for REDD are moving forward. This track dates back to Bali and earlier and includes the substantial progress made in Copenhagen. Looking ahead, it will include the continuation of the formal negotiation process, including several planned meetings in 2010, culminating (?) in the COP-16 meeting in Mexico City this December (which will offer another chance for me to hone my 'live'-blogging skills). Work underway along this track is essential for formalizing the 'rules of the game', or policy framework, through which REDD will be implemented. It is also critical to attracting private sector interest and capital for REDD-related investments. Finally, it is along this track that firm goals for deforestation reduction and financing can be agreed.

A second REDD track consists in the continuation of REDD Readiness efforts and pilot project development which have been underway in earnest since 2006. This track has included the establishment of multilateral programmes such as UN-REDD and the World Bank's Forest Carbon Partnership Framework (FCPF), along with bilateral efforts such as Norway's International Climate and Forest Initiative and Australia's International Forest Carbon Initiative, together with a dipping-of-the-toes on the part of various private sector players, development of independent standards, etc.

It is this second, 'Readiness Track', which expects to  receive a concrete boost from the $3.5 billion pledge. While it's unclear just how much is currently being spent by various donor programmes on REDD Readiness (look for a future post on this), what is clear is that the new commitment represents a substantial increase over recent levels of financial allocations. Indeed, there will be challenges in ensuring that this increased level of funding can be effectively delivered / absorbed, given the strain that some developing country forestry departments are already under. Capacity building is an incremental process, and large, sudden sums have the potential to overwhelm existing...capacities! This may be particularly true in the case of REDD, where there is significant pressure, and rightly so, to ensure high levels of country ownership and 'country drivenness', as the aid agencies like to say. Donor coordination will be a further challenge within what is already a crowded aid sector.

Interestingly, in the two months or so since Copenhagen, surprisingly little had been said or written on the subject of the $3.5 billion. Yet many questions remain to be answered.  How will the US $1 billion contribution announced by US Secretary of Agriculture Tom Vilsack, and the $2.5 billion from the five remaining donors,  be managed and delivered? Will bilateral or multilateral mechanisms dominate? Will a new fund or institution be created? How will funds be allocated amongst beneficiary countries? And what coordination mechanisms will be put into place at country and international levels?

Needless to say, developing countries are not waiting quietly. At a meeting of the Forest-11 (F-11) countries held in Bali earlier this week, member states called for the mobilization of financial resources for REDD, to be "urgently realized." This 'reminder' is well timed, given that France is apparently organizing a meeting on 11 March with a select group of REDD and donor countries, with a follow-up meeting planned for May in Norway.  We will be looking forward eagerly to news of progress coming from both of these meetings.

Note: If you've read this far, then perhaps you know something we don't. How do you think the $3.5 billion will be channeled? How do you think it should be channeled? What are your hopes and concerns for the 2010-2012 'second track'? Comment below to let us know.