National REDD+ Fund and Financing
Papua New Guinea (PNG) is entering the implementation phase of its national REDD+ process. To ensure all planned activities are fully implemented, a clear financing plan is needed. Financing for REDD+ implementation requires multiple sources of finance. Key points on different sources of financing are provided below.
National Government Finance
Government finance is critical to implementing REDD+. Existing finance from departments will be essential to implementing REDD+ policies and measures that are in line with the priorities and mandates of key agencies e.g. forest monitoring by PNG Forest Authority (PNGFA) or environmental impact assessments by Conservation and Environment Protection Authority (CEPA).
Private Sector Finance
This will come from changes in investment and extra spending from the private sector in implementing sustainable practices e.g. forestry companies spending more to achieve Forest Stewardship Council (FSC) or palm oil companies investing more for Round table on Sustainable Palm Oil (RSPO) certification.
Developing partners and the Green Climate Fund
Increasing international finance to support REDD+ developments and implementation under the UNFCCC is available but will need to create changes that are sustainable in the long term.
REDD+ Finance in PNG: Next Steps
1. Identification of Costs and investment needs
PNG has developed its National REDD+ Strategy. This will provide the guiding framework for what Policies and Measures (PAMs) will be implemented to reduce emissions from deforestation and forest degradation. PNG will need to assess the cost of implementing the PAMs, many of which are linked to existing government priorities and programmes and develop a Finance and Investment Planto identify how these costs can be met from different sources.
2. Target key financial sources to address financing gaps
The PNG government funding will be central to implementing the National REDD+ Strategy but the Finance and Investment Planwill help identify specific gaps where government funds will not be sufficient. The government should then work across sectors and in line with the Finance and Investment Plan to target relevant REDD+ financing sources as well as donors with specific technical interest to address these gaps. Demonstrated commitment from the government will be instrumental in engaging external sources of additional finance.
3. Development of financial management systems and structure
PNG will need to develop effective systems to manage the different sources of finance linked to REDD+. Some may flow directly to line agencies or other stakeholders, while others may not pass through government accounts (e.g. private sector finance). Central donor or REDD+ specific finance, however, will need to be managed in a transparent, equitable and efficient way to ensure that PNG is seen as a good location for REDD+ investment.
The Forest Carbon Partnership Facility project, through the Climate Change Development Authority, is supporting an assessment for REDD+ in PNG beginning in 2017 which will help guide further discussion on this issue.
Investment financing within the three phases of REDD+