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Thursday, February 12, 2009South-South Collaboration Workshop

Amazonas, Brazil

Marisa MeizlishDirectorNew Forests Advisory Inc+1-415-321-3301mmeizlish@newforests.com.au

Amazonas Workshop: Readiness for REDD

Experiences from Papua, Indonesia

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Outline

1. Introduction to New Forests2. Context for Papua Project3. Papua project summary4. Project characteristics

a) Governance

b) Baseline

c) Consultation / social

d) Link to national strategies

e) Distribution of benefits

f) Financing

5. Lessons learned & conclusions

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1. New Forests• Private for-profit forest investment management and

advisory services firm• Headquartered in Sydney, Australia, with offices in

Washington, D.C., San Francisco and Kota Kinabalu, Malaysia

• Investments primarily in Australia, New Zealand and the Asia Pacific region

• REDD: began studying in 2007 and developing the Papua project in 2008; hope to achieve certification (Voluntary Carbon Standard) in 2009

• Developing other smaller REDD projects as part of larger investments

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2. Papua Project Context

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2. Papua Project Context: Deforestation Drivers

• 90% of world’s palm oil exports come from Malaysia & Indonesia

• 300,000 ha converted per year globally• Luxury products (cosmetics, shampoos, food) & biofuels

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2. Papua Project Context: REDD Markets

Mechanism Market

Mitigation – Forestry

Project-Based / Credits(“market”)

National Accounting

(“non-market”)

Regulatory

2008: $118B3.9 BtCO2

UNFCCCCDM – Only Reforestation

“CDM” – REDD post-2012 ?

Reforestation / Deforestation

REDD post-2012 – ?

Domestic Regulatory Markets (i.e. U.S., Australia, Canada)

ReforestationForest Management

REDD – ?

Reforestation / Deforestation

Voluntary

2008: $499M100 MtCO2

Business Commitments /

Marketing / Personal Choice

ReforestationForest Management

REDDnot relevant

• Voluntary market projects can move the REDD market forward while complex regulatory mechanisms are negotiated

• Develop technical methodologies and new business models

• Ultimately, REDD will survive or fail in regulatory markets

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3. Papua Project Summary

Mamberambo

Mimika

• Began with Memorandum of Understanding between Governor Suebu & New Forests, May 2008

• Government nominated 3 concession areas – 2 were prioritized after desktop review

• June 2008, site visits to begin feasibility and project design

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3. Papua Project Summary• Project framework

o Baseline assumes conversion to palmo Approximately 28MtCO2e conserved under project

scenarioo Voluntary carbon sales – Voluntary Carbon Standard (VCS)

& Climate, Community & Biodiversity Alliance Standards (CCBA)

o Revenues to local foundation, government & investorso Local partner with political & implementation experience

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4a. Governance• MOU for joint development

of REDD project: “commercially sustainable model for forest conservation and community development”

• Applying for provincial license that will grant carbon rights to New Forests• Term sheet defines financial arrangements

• Regency and district governments provide local political and logistical support

• Papua Carbon Foundation receives revenue from credit sales to fund community development & forest protection activities o Governed by Advisory Committee with local stakeholders

and relevant experts

Gov. Suebu signing MOU, May 2008

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4b. Baseline• No existing methodologies for

Avoiding Planned Deforestation - areas with low rates of historical deforestation require technical rigor

• Other areas of province have higher deforestation rates but causal “link” needs to be established

• Limited data and existing quantitative analysis of deforestation drivers

Where we are now:• Understanding data requirements needed to establish

biophysical and economic feasibility of conversion• Understanding modeling requirements to demonstrate likely

rates of deforestation• Evaluating in-house capabilities and resource needs

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4c. Consultation Process• Dozens of small villages in both project areas –

primarily small scale agriculture, sago palm harvesting, hunting & fishing

• Loosely organized through district & regency governments

• In June 2008 met with local governments and held village meetings in conjunction with local NGOs and met with dewan adat (tribal council)

• “Oxygen” projectVillage meeting in Bagusa,

Mamberamo, June 2008 Meeting with regency & district government officials and village elders in Mimika, June 2008

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4c. Consultation Process• Initial feedback at all levels

of was positive• Written letter of support

from head of dewan adat in Mamberamo

• However, questions remain regarding community development aspirations, project activities and socio-economic considerations relevant to project design and implementation

Receiving letter from head of dewan adat in Casanoyagia, Mamberamo,

June 2008

• Free, Prior & Informed Consent crucial to ensure successful project and social & environmental outcomes

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4c. Consultation Process• Free, Prior & Informed Consent

o Limited guidance & standardso Work with best experts with field experience in

community engagement for forestry in Papua and Indonesia

o Intention to provide full information about the project and potential outcomes & risks

o Decisions and debate at the community level to accept or reject the project

• Help shape the objectives and management plan for the Papua Carbon Foundation

• Further establish channels of communication between impacted communities and government

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4d. Link to National Strategies• Indonesia is extremely active in REDD

o More than 20 REDD projects in development in the country

o Participant in the UN-REDD Programme and the World Bank Forest Carbon Partnership Facility

o Bilateral agreements with Germany (Forest and Climate Change Program) and Australia (Forest Carbon Partnership)

o Governors of Aceh & Papua (and several Brazilian states) have signed an MOU with US governors for inclusion of REDD credits in emerging carbon schemes

• Unclear how these activities will interact on a technical level (i.e. carbon accounting)

• However, biggest questions now are legal and financialo Draft national legislation issued in mid-2008 and

national government is now working to revise and finalize legislation – June 2009

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4e. Distribution of Benefits• Beneficiaries at village, district, province and

national level• Private investment necessitates returns• Primary distribution channel is the Papua Carbon

Foundationo annual disbursements to fund community

development and forest protection activities – determined by FPIC process

o Advisory Board comprising representatives of community stakeholders and relevant experts

• Remaining revenue: government, investors & project managers

New Forests & Emerald Planet staff with provincial Forestry Department staff and government officials in Mamberamo, June

2008

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4f. Project Financing• New Forests represents

private investors interested in financial and environmental returns

• Skilled in monetizing environmental assets associated with forestry investment

• Well aligned with Papua’s objectives and project parameters

• Returns delivered through credit sales over time

Managing Directors of New Forests and Emerald Planet meeting with Governor

Suebu, May 2008 c

• Upfront costs shared among project partners• Long-term commitment to sustainable resource use

in Indonesia

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5. Lessons Learned• Projects in areas with low rates of deforestation

have high hurdle to establish evidence-based baselines

• Area, such as Papua, where this is limited data availability make this even harder

• Legal uncertainty for REDD projects outside national-level demonstration activities – right to transact credits?

• Also face technical uncertainty – project vs. national level baselines?

• FPIC is time consuming and requires dedicated resources – lack of standardized guidance

Difficult to get early project financing where there is no established legal & methodological frameworks

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6. Conclusions• Private investment can play pivotal role in more

challenging REDD areas that attract less public & multilateral funding

• Will take on the risks as long as there is some certainty on fundamental issues:o Legal right to transact in

carbono Legal arrangements for

revenue sharing among government agencies/levels

o Legal recognition of project activities within national-level activities

• Donor / grant / multilateral finance remains important for information gathering, data analysis and FPIC/community engagement

Arial view of Mimika site, June 2008

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