Informal note. Framing elements Reference to relevant decisions; Other references as needed.
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1 AD HOC WORKING GROUP ON LONG-TERM COOPERATIVE ACTION UNDER THE CONVENTION Infrmal additinal sessin Bangkk, 30 August 5 September 2012 Plicy appraches and psitive incentives n issues relating t reducing emissins frm defrestatin and frest degradatin in develping cuntries; and the rle f cnservatin, sustainable management f frests and enhancement f frest carbn stcks in develping cuntries (Agenda item 3 (b) (iii)) Infrmal nte This infrmal nte captures the key views and prpsals raised by Parties in the frm f framing elements and questins in their cnsideratin f this agenda item. In prgressing their wrk, Parties may wish t further explre and elabrate n the fllwing framing elements and questins, add t them, r remve frm them, as apprpriate: Framing elements Reference t relevant decisins; Other references as needed. Guiding principles Reference t the principles, guidance and prvisins set ut in decisin 1/CP.16 and its appendix I and decisin 2/CP.17, such as: Envirnmental integrity; Transparency; Respect fr natinal svereignty; Participatin in REDD-plus activities is vluntary; Prmtin f brad cuntry participatin in all phases. Additinal guiding principles such as simplicity, etc? Enabling cnditins What elements need t be included in a ttal package f enabling cnditins? Adequate and scaled-up financing fr phases 1 and 2 is critical t ensure implementatin f phase 3. Strengthening plicy, legislative and institutinal framewrks, including addressing drivers. Capacity-building shuld be included in these framewrks Transparent and effective gvernance, including fiduciary arrangements. Hw t ensure transparent fund management in the gvernance framewrk? Elements identified in 1/CP.16,paragraph 71 t be develped, such as frest reference emissin levels/ frest reference levels, a natinal strategy r actin plan, a natinal frest mnitring system, system fr prviding infrmatin n hw safeguards are being addressed and respected. Imprtance f addressing and respecting safeguards. 4 September
2 Signal Addressing risks assciated with investments in results-based REDD-plus actins. Additinal enabling cnditins? Reaffirming and recgnizing the diversity f financing ptins as referred t in decisin 2/CP.17 What enabling cnditins need t be develped at natinal and internatinal levels? Revisin f dmestic plicy f develped cuntries t incentivize private sectr participatin? Nn-carbn benefits shuld be recgnized as part f enabling cnditins Addressing displacement f emissins and risks f reversals and additinality f actins Develpment f new appraches such as an incentive level r crediting level t serve as baseline fr payments Develpment f a Jint Mitigatin and Adaptatin Mechanism which includes a bttm-up prcess Plitical will and interagency crdinatin Type f signal necessary t trigger the scaling up f financing f and investments in resultsbased REDD-plus actins? Higher emissin reductin ambitins by develped cuntries and price f carbn necessary t incentivize scaling up f financing and investments in results-based REDD-plus actins? Further wrk t be referred t the subsidiary bdies? Additinal issues requiring further explratin: What is meant by results-based actins? Payment fr verified emissin reductins and remvals Setting f an accunting perid and pricing f carbn The use f prxies fr perfrmance-based results? Hw t advance the understanding f what the plus -part f REDD-plus activities entail? Affrestatin/refrestatin activities included as part f enhancing frest carbn stcks What types f institutinal arrangements need t be established (e.g. natinal and internatinal REDD+ registries, technical panel r regulatry bdy)? What guidance is needed frm the UNFCCC prcess fr such arrangements? Optins n institutinal arrangements which are nt mutually exclusive: Links with the Green Climate Fund (GCF) A specific REDD-plus windw under the GCF A specific windw fr the Jint Mitigatin and Adaptatin Mechanism under the GCF What guidance can be prvided t the GCF Bard n REDD-plus financing? What signal can the REDD-plus discussins prvide t the GCF Bard? Links with the new market mechanism being cnsidered under the AWG-LCA What is meant by apprpriate? 2
3 Hw t ensure cnsistency between REDD-plus financing and the new market mechanism and that REDD-plus wuld be captured in the develpment f the new market mechanism? Links between REDD-plus financing and ther finance-related issues, such as: Finance, including lng-term finance (LTF). Framewrk fr varius appraches. A REDD-plus Bard REDD-plus units/ REDD-plus credits What is a REDD-plus unit? What is a REDD-plus credit? Quality f REDD-plus units t be guaranteed by implementatin f the safeguards and ensuring envirnmental integrity? Request the SBI t determine the pricing f REDD-plus units? D REDD-plus credits relate t market-based perfrmance nly r t nn-market based perfrmance as well? A registry as a tl t keep track f REDD-plus units What is the rle f natinal and internatinal registries? Hw are they linked? What happens when units are transferred acrss natinal brders? Shuld there be a link between REDD-plus registry with NAMAs registry? Hw can such a link be established? Request the SBSTA t develp guidance fr the registry and guidance fr reprting f mnitred emissins and remvals achieved frm results-based actins? A Carbn Reserve Bank and a regulatry bdy under the COP What are the rle f these institutinal arrangements? Fr example, the regulatry bdy t versee the new market mechanism and ensure the sufficient functining f the carbn market, ensure pricing and flr prices? T create a reserve accunt? Creatin f a mechanism fr settlement f disputes? What mechanisms are needed t address risks and reversals? Creatin f an internatinal fund t manage REDD-plus risks Insurance mechanism fr addressing risks: hw can ne be designed? Creatin f a guarantee mechanism as reserves Establishment f REDD-plus units at natinal and/r subnatinal levels A UNFCCC Review Bdy Request SBSTA t prvide guidance n the review f reprts n utcmes f resultsbased actins? Which existing institutins under the Cnventin wuld be relevant fr ensuring financing f REDD-plus results-based actins? Credit fr early actin? What is meant by early actin? Hw des early actin affect the financing f phases 1 and 2 n readiness? What shuld be the start date f early actin? Shuld the start date be flexible taking int accunt natinal circumstances and a cuntry s phase f implementatin? 3
4 Shuld the UNFCCC prcess prvide guidance n private sectr participatin? Hw t ensure and catalyze their invlvement? Prviding a signal t welcme and encurage private sectr invlvement in the full implementatin f REDD-plus actins Enabling cnditins needed fr private sectr participatin, such as risk management, strng cmpliance, structural refrms, strng implementatin f safeguards Recgnize the rle f the private sectr in addressing the drivers f defrestatin and frest degradatin Further explratin f the fllwing: Hw t enhance crdinatin between the public and private sectrs; What rle can the dmestic private sectr play in the REDD-plus implementing cuntry? The rle f the private sectr investments utside the carbn markets Whether results-based REDD-plus payments shuld g beynd carbn benefits t include nncarbn benefits? Recgnitin that carbn benefits and nn-carbn benefits cannt be unbundled frm each ther Results-based payments shuld cver bth carbn and nn-carbn benefits. Wuld the payment fr implementatin f safeguards cver payments fr nn-carbn benefits? Request SBSTA t cnsider a wrk prgramme n methdlgical and technical aspects f assessing c-benefits? Further clarificatin n hw the Jint Mitigatin and Adaptatin Mechanism can be elabrated as part f cnsideratin f nn-market appraches? Incrpratin f sme elements f REDD-plus, that are nn-market related, int the Jint Mechanism Cnsideratin f the linkages between the Jint Mechanism and the Nairbi Wrk Prgramme Request the SBSTA t initiate, as a specific wrk stream, cnsideratin f the linkages between mitigatin and adaptatin, the methdlgical aspects and institutins fr the Mechanism? Request SBSTA t develp the architecture fr the Jint Mechanism Elements fr Dha decisin Prpsal by the facilitatr based n the updated and elabrated infrmal nte (Framing elements) Recalling decisins 2/CP.13, 4/CP.15, 1/CP.16, 2/CP.17, 12/CP.17 and [x/c.18] in prmting, encuraging and catalysing the activities referred t in decisin 1/CP.16, paragraph 70 and the prvisin f adequate and predictable supprt, including financial resurces and technical and technlgical supprt t develping cuntry Parties; Recgnizing that significant effrts and actins t reduce defrestatin and t maintain and cnserve frest carbn stcks in develping cuntries are already being taken utside f the Cnventin prcess, 4
5 Recgnizing the natinal, bilateral and multilateral supprt that are being prvided utside f the Cnventin prcess fr the implementatin f activities referred t in decisin 1/CP.16, paragraphs 70 and 73, (Guiding principles) Affirms that the principles, guidance and prvisins set ut in decisin 1/CP.16 and its appendix I and decisin 2/CP.17 cntinue t gvern and guide the mdalities and prcedures fr financing the results-based actins referred t in decisin 1/CP.16, paragraph 73 cntained in this decisin; Ntes the need t prmte brad cuntry participatin in the full implementatin f resultsbased actins referred t in decisin 1/CP.16, paragraph 73; Reaffirms the diversity f results-based finance prvided t develping cuntry Parties that is new, additinal and predictable that may cme frm a variety f surces, public and private, bilateral and multilateral, including alternative surces as referred t in decisin 2/CP.17, paragraph 65; (Signal) Affirms the imprtance f cntinuing and scaling-up new and additinal results-based finance frm develped cuntry Parties fr the full implementatin f results-based actins; Optin 1 Recgnizes that higher ambitin f develped cuntry Parties ecnmy-wide emissin reductin targets and price f carbn is necessary t incentivize scaling-up f financing and investments in the full implementatin f results-based actins referred t in decisin 1/CP.16, paragraph 73; Optin 2 Recgnizes that demand fr and price f carbn is necessary t incentivise scaling-up f financing and investments in the full implementatin f results-based actins referred t in decisin 1/CP.16, paragraph 73; Optin 3 Encurages the private sectr and private rganizatins t cntribute t the full implementatin f results-based actins referred t in decisin 1/CP.16, paragraph 73; (Enabling cnditins) Agrees that enabling cnditins fr scaling-up and facilitating access t results-based finance and ensuring the full implementatin f results-based actins, taking int accunt natinal circumstances and respective capabilities and recgnizing natinal svereignty, shuld be in place and/r develped by Parties: (a) Adequate and scaled-up financing fr the early phases f actins referred t in decisin 1/CP.16, paragraph 73; (b) Strengthened plicy, legislative and institutinal framewrks that addresses drivers f defrestatin and frest degradatin referred t in decisin 1/CP.16, paragraph 72; (c) Transparent and effective gvernance, including fiduciary and relevant institutinal arrangements; (d) Elements identified in decisin 1/CP.16, paragraph 71, decisin 12/CP.17 and decisin [x/cp.18]; (e) Full implementatin f results-based REDD+ actins shuld be in accrdance with methdlgical guidance set ut in decisins 4/CP.15, 1/CP.16, 12/CP.17 and [x/cp.18]; 5
6 (f) Measures t address displacement f emissins and risks f reversals; (g) New appraches such as an incentive level t serve as a baseline fr resultsbased payments; (h) a Jint Mitigatin and Adaptatin Mechanism; (i) (ther enabling cnditins ) Agrees that results-based payments shuld be based n fully measured, reprted and verified emissin reductins and remvals and enhancement f frest carbn stcks expressed in tnnes f carbn dixide equivalent; (Institutinal arrangements - Optins n institutinal arrangements nted belw are nt mutually exclusive) Decides t: Optin 1 Establish new institutinal arrangements t fulfil the functins t be defined by the Subsidiary Bdy fr Implementatin (refer t relevant paragraph under issues requiring further explratin); Optin 2 Requests the Green Climate Fund Bard t establish a REDD-plus windw fr the financing f REDD-plus in all phases, referred t in decisin 1/CP.16, paragraph 73; Optin 3 Establish a range f new institutinal arrangements t recrd and track fully measured, reprted and verified emissin reductins and remvals and enhancement f frest carbn stcks, t avid duble cunting and t address risks f reversals, including: A REDD-plus Bard; T gvern the REDD-plus windw t be established by the GCF Bard; T wrk under the guidance and authrity f the COP and ensure transparency and cnsistency with mdalities and prcedures f existing multilateral and bilateral agencies. T prtect develping cuntry parties against market failure thrugh tls such as supprting apprpriate price flrs. REDD-plus registries at the natinal level and at the internatinal level under the authrity f the Cnference f the Parties; A natinal registry t recrd verified emissin reductins and remvals that it hlds, transfers r cancels and t avid duble cunting; An internatinal registry t recrd and track verified emissin reductins and remvals and t avid duble cunting. T als track units acrss internatinal brders; A Carbn Reserve Bank and a regulatry bdy under the Cnference f the Parties Oversee the new market mechanism; Ensure the efficient functining f the carbn market; Ensure pricing and flr prices; Create a reserve accunt: 6
7 Create a mechanism fr settlement f disputes. A review bdy under the Cnventin T review, in accrdance with guidance t be develped by the SBSTA, the perfrmance reprts n utcmes f results-based actins submitted by develping cuntry Parties. Optin 4 Use and/r establish links with existing r newly establish institutinal arrangements and/r financing channels under the Cnventin t ensure cnsistency in reprting, recrding and tracking and technical analysis: Green Climate Fund; Lng-term finance; Registry fr natinally apprpriate mitigatin actins by develping cuntry Parties Internatinal cnsultatin and analysis; Optin 5 Use new financial appraches, mechanisms and framewrks under the Cnventin, including a framewrk fr varius appraches referred t in paragraph 80 and the new market mechanism referred t in paragraph 83 f decisin 2/CP.17; Optin 6 A cmbinatin f any f the ptins nted abve which will depend n the scpe and nature f the functins f the institutins needed. (Nn-market alternative) Optin 1 Agrees t establish a jint mitigatin and adaptatin mechanism fr the integral and sustainable management f frests under the guidance and authrity f the Cnference f the Parties, in accrdance with decisin 2/CP.17, paragraph 67; Optin A Requests the Green Climate Fund t establish a specialised windw fr the jint mitigatin and adaptatin mechanism; Requests the SBSTA t develp the architecture fr the jint mitigatin and adaptatin mechanism; Optin B Requests the SBSTA in develping the guidance fr the jint mitigatin and adaptatin mechanism t be cnsistent with any guidance frm nging wrk n adaptatin under the Cnventin and be in accrdance with any future decisins relating t adaptatin by the Cnference f the Parties; Optin 2 Recgnizes the nging wrk n adaptatin under the Cnventin and its relevance fr jint mitigatin and adaptatin appraches; Recgnizes the multiple benefits frm the implementatin f the jint mitigatin and adaptatin apprach; Encurages bilateral and multilateral financing channels t supprt the activities using nnmarket based appraches, such as jint mitigatin and adaptatin appraches; 7
8 (Issues requiring further explratin) Requests the [SBI] [SBSTA], at its [nnth] sessin t develp mdalities and prcedures fr the new institutinal arrangements referred t abve and ways t address risks, and t reprt n the prgress made, including any recmmendatins fr a draft decisin n this matter, t the Cnference f the Parties at its [yyth] sessin; Requests the [SBI] t define functins f the necessary new and/r existing institutinal arrangements t guide and supprt the financing f full implementatin f results-based actins referred t in decisin 1/CP.16, paragraph 73 and the utcmes f these actins; Requests the [SBSTA], at its [mmth] sessin, t cnsider the need fr guidance and methdlgies fr assessing the c-benefits and nn-carbn benefits arising frm the full implementatin f results-based actins referred t in decisin 1/CP.16, paragraph 73 and t assess the ptential f including c-benefits and nn-carbn benefits as part f resultsbased payments; Agrees that fully measured, reprted and verified results based actins and their verified emissin reductins and remvals and enhancement f frest carbn stcks ccurring during the perid frm year [2xxx] shuld be eligible fr results-based payments; 8
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