Benefit Sharing Mechanism

The implementation of REDD+ programs in Ethiopia should deliver real and meaningful benefits that are economically sustainable, and shifting towards low-carbon practices in the country. In order to achieve the objective of REDD+,  multiple of benefits including monetary and non-monetary incentives will be tailored to meet the needs of different stakeholders and thereby addressing drivers of deforestation and forest degradation at multiple levels. Benefit sharing mechanism in the context of Ethiopia’s REDD+ program will focus on the distribution and investment of results-based finance that Ethiopia receives from the valuation of an environmental service, i.e., reduced emissions from REDD+ activities. In fact the distribution of benefits (monetary and non-monetary) created by the various policies and measures and the co-benefits (indirect benefits) including Environmental (biodiversity protection, water conservation), social (capacity building for local institutions) or economic (enhanced livelihood opportunities)  should be implicit in the design of the REDD+ program and the benefit sharing mechanism. The benefit sharing arrangement will be transparent and seeks nation-wide participation of all relevant stakeholders, with a focus on local communities, women and underserved (marginalized) communities, and rural households in general.

The benefit sharing mechanism for Ethiopia’s REDD+ program will be based on the principle of equity (fair distribution of costs and benefits including procedural aspects of participatory decision-making), effectiveness (benefits should act as an incentive) and efficiency (benefit sharing in terms of costs). There is a general agreement that benefit sharing should promote non-carbon benefits for local communities such as increased income from new land-use practices, natural resource-based small enterprises development, improved yields and more secure ecosystem services. Sufficient livelihood incentives for local communities will be essential for the success of REDD+ in Ethiopia, as is highlighted by the experiences with PFM.

The following overarching principles will underpin the benefit sharing mechanism:

  • Building the benefit sharing mechanism on the basis of accountable and transparent local governmental arrangements responsible for the implementation and management of REDD+ activities with the necessary skills in reaching out to local farmers.
  • Encouraging decentralized decision making through active involvement of all relevant actors in transparent discussions and ensure wide support among community members.
  • Utilizing REDD+ funds to promote economically viable development activities at community level (e.g. schemes that generate income sustainably and enhance the forest potential and poor peoples’ livelihoods);
  • Taking into account the needs of underserved (marginalized) groups and gender aspects.
  • Ensuring that the  benefit sharing practices are established on stable, fair, clear and coherent policies and legal frameworks that govern rights, responsibilities, distribution of benefits, and provide an appropriate mechanism for addressing grievances etc.
  • The National or sub-national REDD+ benefit sharing mechanism that will be developed for proper implementation of REDD+ will take into consideration the following fundamental elements:
  • Eligibility criteria to participate in REDD+ actions will be developed in consultation with stakeholders and also considering the legal provisions of the country. Experiences from Participatory Forest Management PFM initiatives will be taken up.
  • A range of benefits may include financial or non-financial and can be delivered as upfront programmatic investments or as ex-post payments for performance.Indirect benefits such as legal rights (e.g. use, access) to resources will also be considered.The mechanism should also consider augmenting financial benefits with technical assistance.In addition, the scheme should create options for the future through enabling communities to benefit from other forest based initiatives.
  • The development of a benefit sharing mechanism will consider managingcommunity expectations
  • Criteria for sharing benefits should be based on performance of each CBO.The timing for channelling benefits should be suited to local conditions and needs.
  • Institutional setting for benefit flow and management will be developed and specific institutions and their role will be further elaborated.
  • Setting up of a separate window for REDD+ financial management (upfront as well as incentive money) and establishment of transparent and efficient system for disbursement of finance based on agreed share. At the grassroots level, financial benefits will be channelled to CBOs (not individuals).
  • CBOs will develop by laws pertaining to internal procedures for sharing of financial revenue between individual members of CBOs considering specific aspects.
  • Benefit distribution scheme will be revised as necessary taking into account new developments.
  • Putting in place an M & E system to track benefit flow and to measure the impact of benefits and the system for verifying performance reports by an independent entity.
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