The World Bank’s Forest Carbon Partnership Facility “has not saved a single hectare of forest”

The World Bank’s Forest Carbon Partnership Facility is supposed to help countries in the Global South reduce emissions from deforestation and forest degradation. It was launched at COP 13 in Bali in 2007. The Fund capital stands at US$850 million, of which US$1.12 billion is for the Readiness Fund, and US$750 million is for the Carbon Fund. But after nine years, the FCPF cannot point to a single country in which it has actually reduced deforestation.

Norway is the largest contributor to the FCPF. Over the years, Norway has handed over a total of about US$275 million. A recent article in the NORAD-funded Bistandsaktuelt questions the effectiveness of all this generosity.

The article quotes Rainforest Foundation UK’s criticism that the FCPF has spent too much money on operations, consulting, methodological support and administration, while the concrete results in terms of forest conservation and purchase of carbon offsets are on hold.

From the beginning, the FCPF was supposed to “jump-start a forest carbon market”.

Rainforest Foundation UK calculates that almost two-thirds of the money spent under the FCPF since 2009 has gone on the World Bank’s own administration, consulting expenses and transaction costs.

Simon Counsell, Executive Director of the Rainforest Foundation UK told Bistandsaktuelt that all this money, “has not saved a single hectare of forest or prevented a single gram of CO2 from being released into the atmosphere”.

FCPF evaluation: slow disbursements, lack of understanding, complexities

The World Bank’s response to Bistandsaktuelt is that a large number of countries have gone through the Readiness Fund process into the pipeline portfolio in the Carbon Fund. Breen Byrnes at the World Bank claims that administration costs are only one-quarter of the payments made, and that this figure will drop further when results-based payments are made.

But a recently completed evaluation of the FCPF carried out by Finnish consulting firm Indufor found that,

The FCPF has faced challenges in reaching advanced stages of readiness at the portfolio level and securing investments for the Future Emissions Reduction Programs. Slow disbursements at the country level, lack of understanding of Delivery Partner policies, and coming to terms with technical complexities have led to delays in the FCPF program. The uncertainty on how the required upfront investments for the future Emission Reduction Programs will be financed has created challenges across the portfolio in managing stakeholder expectations with respect to timing and the availability of funds for REDD Countries.

Indufor also noted that,

It is unclear to what extent the FCPF will reduce emissions in the long term, as it has yet to pilot the legal aspects of its results-based framework (i.e. Emissions Reduction Purchase Agreements ERPAs).

NICFI: Carbon Fund is the best multilateral payment mechanism for REDD

Per Fredrik Ilsaas Pharo, Director of the Government of Norway’s International Climate and Forest Initiative at the Ministry of Environment told Bistandsaktuelt that,

The Ministry has been clear with the World Bank that we wanted faster progress in the FCPF. But results and important milestones in the fund have been achieved, although payments for emission reductions have not yet been made.

According to Pharo, access to long-term and predictable funding is one of the greatest challenges to achieve REDD. Pharo argues that,

It has therefore been important for Norway and other donor countries to help build up and put money into the Carbon Fund, which is the best multilateral payment mechanism that currently exists for payment for emission reductions from forests in developing countries.

The Carbon Fund may well be the “best multilateral payment mechanism” for REDD. Let’s face it though, there’s not much competition. And best or not, the Carbon Fund has not saved a single hectare of forest or prevented a single gram of CO2 from being released into the atmosphere.

And even if the performance-based payments do start pouring out of the Bank, that is no proof of anything, given the impossibility of verifying baselines, and that the concept of additionality is entirely meaningless.