REDD arrangement and effects on Tanzania

Legal assistance paper

All reasonable efforts have been made to ensure the accuracy of this information at the time the advice was produced. However, the materials have been prepared for informational purposes only and may have been superseded by more recent developments. They do not constitute formal legal advice or create a lawyer- client relationship. To the extent permitted any liability is excluded. Those consulting the database may wish to contact LRI for clarifications and an updated analysis.

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Date produced: 12/11/2013

1. What might the REDD framework look like?

2. In particular, how might this affect the rights of Tanzania’s citizens to use their land?

3. How can Tanzania protect the rights of their local communities through contracts? This should also address the issue of carbon credit.

Summary:

The framework for REDD+ under the UNFCCC is still emerging.  However, under the UNFCCC framework, REDD+ is meant to take place on a national scale (i.e. not project scale) through national-level policies designed to reduce emissions from the forest sector, with REDD+ revenues being directed to national governments who must then share those according to a national REDD+ benefit-sharing scheme. There are two different markets which do, or can, potentially generate demand for carbon credits (offsets) from REDD+ activities: (1) Compliance market: such as the UNFCCC (where countries or companies buy carbon credits because they have a treaty or regulatory obligation to do so).  IF the UNFCCC adopts a market-based mechanism for REDD+, then developed countries may need to buy carbon credits from REDD+ activities to meet their emission reduction targets.  This issue is being discussed in Warsaw and has not yet been decided; and (2)Voluntary carbon market: This is not part of the UNFCCC process.

There are potentially three different ways that countries/REDD+ projects can generate or earn carbon credits for REDD+ activities, thus engaging in various forms of “carbon trading”: (1) UNFCCC REDD+ framework:  As described above, Parties have not yet agreed how developing countries will be paid for emission reductions from REDD+, i.e. whether it will be fund-based or a market-mechanism; (2) Bilateral arrangements between two countries (e.g. Tanzania and Norway), or a country and the World Bank’s Carbon Fund.  They would need to agree what sort of credits would be generated, and who would buy them. (3) Voluntary carbon market:  Under a project-based approach to REDD+, REDD+ projects can generate carbon credits to be sold on the voluntary carbon market.  This is not part of the UNFCCC process.

Under the current UNFCCC framework for REDD+, Tanzania’s citizens that might be affected by REDD+ should be consulted on how REDD+ is expected to work in Tanzania, including how their rights to land and natural resources will be protected.  Indigenous peoples in Tanzania can also point to UNDRIP to argue that the national REDD+ framework should protect their rights to land, territories and natural resources.  Ultimately, this will be determined through consultation and negotiation between the Government of Tanzania and the representatives of local communities or indigenous groups that may be affected by REDD+.

It is the responsibility of the Government of Tanzania to address how land tenure, including how to enhance security of land tenure, as part of Tanzania’s national REDD+ framework.  These discussions are currently underway in Tanzania.

Advice:

1. REDD Framework

The framework for REDD+ under the UNFCCC is still emerging.  However, under the UNFCCC framework, it is clear that REDD+ is meant to take place on a national-scale through national-level policies designed to reduce emissions from the forest sector.  Unlike the voluntary carbon market (which generates carbon credits: see below), national-scale REDD+ programmes are NOT project-based, although countries such as Tanzania may have ‘pilot projects’ to demonstrate how REDD+ activities are intended to operate within the national REDD+ framework.

Some elements of the framework have already been established as follows:

  • COP 15 Copenhagen: which dealt mostly with systems for measuring and reporting greenhouse gas emissions from the forest sector (Dec. 4/CP.15)
  • COP 16 Cancun (the “Cancun Agreements”): this is the main COP decision establishing the current framework for REDD+.  It deals with the following things:
    • Developing countries must develop a national REDD+ strategy (Tanzania already has one) which must address, inter alia, the drivers (causes) of deforestation, land tenure issues, and social and environmental safeguards (Tanzania has developed draft safeguards).
    • The national REDD+ strategy must be developed with the full participation of indigenous peoples and local communities.
    • The national strategy must follow certain environmental and social safeguards (listed in Appendix I of the decision), such as respect for the knowledge and rights of indigenous people and local communities.
  • COP 17 Durban: requires REDD+ countries to establish a monitoring system to show how social and environmental safeguards are being met.

There are two main issues for negotiation regarding REDD+ in Warsaw.  These are:

  • verification (how will emission reductions from the forest sector in each developing country be checked?); and
  • finance (will emission reductions from REDD+ be paid for from a fund, a market-based mechanism, or a combination of both?).

The two issues are linked: developed countries are unlikely to agree to finance REDD+ unless developing countries agree to a robust and transparent arrangement for verification.

2. Effects of rights of citizens to use their land

There are two different markets which do, or can potentially, generate demand for carbon credits (offsets) from REDD+ activities:

  • Compliance market: such as the UNFCCC (where countries or companies buy carbon credits because they have a treaty or regulatory obligation to do so).  IF the UNFCCC adopts a market-based mechanism for REDD+, then developed countries may need to buy carbon credits from REDD+ activities to meet their emission reduction targets.  This issue is being discussed in Warsaw and has not yet been decided; and
  • Voluntary market: where companies and individuals choose to purchase carbon credits.  This is not part of the UNFCCC process.

There are potentially three different ways that countries/REDD+ projects can generate or earn carbon credits for REDD+ activities, thus engaging in various forms of “carbon trading”:

  • UNFCCC REDD+ framework:  As described above, Parties have not yet agreed how developing countries will be paid for emission reductions from REDD+, i.e. whether it will be fund-based or a market-mechanism.  If a market mechanism is adopted, it is likely to involve carbon credits being allocated to REDD+ countries to “pay” them for their emission reductions from REDD+ activities.  However, these payments are expected to take place on a country to country level (or a fund to country level).  Payments are unlikely to be made to subnational bodies (e.g. provincial governments) or directly to landowners or REDD+ projects.

If a national government receives REDD+ revenues, it will then be up to that country to establish its own national benefit-sharing system which sets out how the REDD+ revenues will be shared in the country.  The UNFCCC REDD+ framework does not give any guidance on how national benefit-sharing systems must operate.  Tanzania’s National REDD+ Strategy (adopted in March 2013) states that it will establish a National REDD+ Fund to consolidate and distribute funds to different stakeholders based on efforts to implement Tanzania’s REDD+ strategy (p. 17).

  • Bilateral arrangements between two countries (e.g. Tanzania and Norway), or a country and the World Bank’s Carbon Fund.  They would need to agree what sort of credits would be generated, and who would buy them.
  • Voluntary carbon market:  Due to the time it is taking (some years) for the UNFCCC’s REDD+ mechanism to become fully functional, many countries are adopting a project-based approach to REDD+ in the interim.  Under a project-based approach to REDD+, REDD+ projects can generate carbon credits to be sold on the voluntary carbon market.  Countries can choose to regulate these projects through their existing legal and administrative forestry frameworks.  In many countries this may be preferable, as the government can regulate voluntary REDD+ activities to ensure that vulnerable communities are not exploited by carbon project developers or carbon brokers through unfair contracts.

Most projects seek to comply with a particular voluntary carbon standard, e.g. the Verified Carbon Standard.  If they meet that standard, the project will be entitled to generate carbon credits (e.g. Verified Emission Reductions, or VERs).  At some stage in the future, carbon credits from voluntary REDD+ projects will need to be integrated into national REDD+ frameworks in order to avoid double-counting of emission reductions.  It will be up to Tanzania as to how it integrates any existing REDD+ projects (and their credits) into its National REDD+ Framework.

3. Local communities and carbon credit

It is not entirely clear whether the question is about contracts to secure land tenure for local communities or contracts for the generation and sale of carbon credits (e.g. Emission Reduction Purchase Agreements, or ERPAs).  It is assumed that the question relates to the generation and sale of carbon credits.

Under the Cancun Agreements, each country must develop its own national REDD+ strategy (para. 71(a)).  The Cancun Agreements state that, when developing and implementing the national REDD+ strategy, each REDD+ country must address land tenure issues (para. 72), but the COP decision does not say exactly how this must be done.

However, the Cancun Agreements also state that national REDD+ strategies must be developed and implemented with the full and effective participation of relevant stakeholders, including indigenous peoples and local communities (para. 72).  The strategy must also be prepared in accordance with certain social and environmental safeguards that are listed in Appendix I of the Cancun Agreements.  The social safeguards include “respect for the knowledge and rights of indigenous peoples and members of local communities”, and note the importance of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).  This is a Declaration of the UN General Assembly in 2007 which protects indigenous peoples’ rights to land, territories and natural resources (including forests and carbon).  Tanzania voted in favour of UNDRIP.

To summarize, under the current UNFCCC framework for REDD+, Tanzania’s citizens who might be affected by REDD+ should be consulted on how REDD+ is expected to work in Tanzania, including how their rights to land and natural resources will be protected.  Indigenous peoples in Tanzania can also point to UNDRIP to argue that the national REDD+ framework should protect their rights to land, territories and natural resources.  Ultimately, this will be determined through consultation and negotiation between the Government of Tanzania and the representatives of local communities or indigenous groups that may be affected by REDD+.

Tanzania receives assistance to develop its national REDD+ strategy and framework from the World Bank’s Forest Carbon Partnership Facility, the UN-REDD Programme, and the Government of Norway.  In March 2013, the Government of Tanzania adopted its National REDD+ Strategy.  The author has reviewed this briefly, but due to time constraints has not been able to fully assess how Tanzania’s national REDD+ strategy will affect local land rights.  The paragraphs below contain a brief summary of the main issues identified.

Tanzania’s National REDD+ Strategy provides as follows:

  • As part of the development of a national REDD+ framework, it will develop “Governance mechanisms for REDD+” (Key result Area 6, p. 37).  This will include an in-depth study on issues of land tenure for enhancing security in land ownership, to be done by 2013.
  • The Tanzania Technical Group on Legal and Governance is currently developing Tanzania’s social and environmental safeguards.  These safeguards should contain provisions on consultation and participation, who will be identified as “indigenous peoples” in Tanzania as well as other forest-dependent communities that will be consulted on REDD+, and how land tenure and benefit-sharing will be addressed in an equitable and transparent manner.