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Empowering Chile’s Climate Action: A Citizen’s Guide to Article 6

By / Bio / Twitter profile / Published: April 18, 2024

This blog was authored by Francisco Pinto and Rodrigo Bórquez, economists of the Climate Action Teams (CAT) initiative, and by Environmental Defense Fund economist Luis Fernández Intriago.

Source: Climate Action Teams

Reducing emissions is imperative to address climate change. The mechanisms established in Article 6 of the Paris Agreement can serve as vital tools in our quest to stop the impacts of climate change and safeguard the future of our planet—but navigating its complexities can be tricky.

To tackle this challenge, between June and August 2023, the Climate Action Teams (CAT-Chile) initiative, co-founded by EDF, and the Consensus Building Institute (CBI) conducted a dialogue process in Chile. We aimed to convene key players in a discussion to better understand Article 6’s potential to boost Chile’s climate ambition.

This fruitful dialogue, called “Climate Dialogue: Strengthening Chile’s Ambition through Article 6 of the Paris Agreement“, explored three specific areas:

  1. The feasibility of implementing Article 6 in Chile,
  2. The application of safeguards, and
  3. The short-term actions and tasks to progress in this field.

The dialogue’s outcomes were delivered to Chile’s Ministry of the Environment to consider as they prepared to host their own public-private sector dialogue on ideas around the development of a Chilean Article 6 policy.

 Our process of dialogue:

Our dialogue process ran in two simultaneous series—one with a high-level, multi-actor group of members from the public sector, private sector, academia, and NGOs; and a second group with members of Indigenous Peoples. We discussed a common vision on how the instruments outlined in Article 6 of the Paris Agreement (with an emphasis on Article 6.2) could contribute to increasing Chile’s climate ambition, as well as the specific contribution of Climate Action Teams.

Between June and August 2023, five meetings were held with the national multi-actor group (three in-person and two virtual), averaging 20 people per session, and three meetings with members of Indigenous communities (all virtual), averaging seven people.

The meetings addressed the following questions:

  • Is the use of Article 6 feasible in Chile, specifically the cooperation mechanism outlined in Article 6.2? What are the challenges that need to be addressed in this context?
  • Should Chile decide to implement cooperative agreements under Article 6, what safeguards or conditionalities are necessary to ensure appropriate implementation?
  • How can Climate Action Teams Chile contribute to the design and implementation of these mechanisms?

During the sessions, we featured presentations from various stakeholders, including representatives from the Ministry of the Environment of Chile, the Swiss Foundation Klik, the Municipality of Renca, and the CAT-Chile team.

Building Trust and Relationship Through Dialogue

Following presentations, the facilitating team used multiple tools to build trust among participants and foster a spirit of collaboration. At the beginning of each in-person meeting, time was allocated for informal conversation to get to know each other better. In contrast, in virtual meetings, chat and “breakout rooms” were used to replicate this dynamic of initial informal conversation.

Another tool used was real-time surveys. For in-person meetings, the team used keyboards that allowed participants to answer questions by pressing a button and immediately viewing the results. In virtual meetings, Zoom’s survey feature was used.

Source: CBI

Surveys allowed the team to ask questions about participants’ perceptions and moods, providing anonymity and encouraging honesty. Additionally, the facilitation team would recap the progress and summarize the previous session at the beginning of each meeting. The entire process was dynamic and fruitful, enabling the actors to better understand the scope of Article 6 and its potential to accelerate mitigation in Chile. Each participant was also asked to identify points that needed attention in its implementation, from their particular sectoral perspective.

Results of the process: A citizen’s guide for Article 6

Source: CLG-Chile

The CAT initiative delivered the result of its dialogue process at a public seminar , organized jointly with the Corporate Leaders Group for Climate Change (CLG-Chile) at the Faculty of Economics and Business of the University of Chile last October. The shared statement was presented to the head of the Climate Change Division of the Ministry of the Environment, Jenny Mager.

The results of the dialogue concluded that:

The application of Article 6 in Chile is feasible, but challenging. To achieve it, Chile must build capacity.

  1. Feasibility with Challenges. It is feasible to use Article 6 in Chile, although it is recognized the difficulty of meeting, and even more, exceeding the greenhouse gas (GHG) emissions target for the year 2030 established in Chile’s current Nationally Determined Contribution (NDC), making possible the materialization of bilateral or multilateral agreements under the Article 6.2 cooperation mechanism. To achieve this, it is essential to have early definitions and a significant availability of human and financial resources, as well as an institutional infrastructure that facilitates the implementation of both public and private initiatives that promote GHG mitigation beyond national commitments.
  2. Capacity Building. The State must strengthen its technical and operational capacities, while broadening its scope at the territorial level, to effectively implement policies and cooperation initiatives under Article 6. It is essential that the agreements generated (whether bilateral or multilateral, under Article 6.2, or under any other Article 6 mechanism) contain instruments to finance and promote the strengthening of the capacities of local governments and actors, promoting the development of enabling infrastructure, technology transfer and facilitating technical exchange.

Social and environmental safeguards must be robust in any application of Article 6 in Chile.

  1. Integral Protection. The use of Article 6 should be based on the normative frameworks and international agreements signed by Chile that safeguard essential social and environmental balances. Special attention should be paid to their full compliance in the territories. These mechanisms should consider: (i) unwavering respect for Human and Indigenous Peoples’ Rights, in line with international standards (e.g., the UN Declaration for the Rights of Indigenous Peoples); (ii) the right to free, prior and informed consent; (iii) safeguards to protect natural, cultural, tangible and intangible heritage and prevent further damage; (iv) consultation with the territories and local communities and institutions representing indigenous peoples before approving GHG reduction and/or removal initiatives/projects, promoting the inclusion of their knowledge and experience, the incorporation of ancestral knowledge and indigenous science, as well as mechanisms that allow for the equitable distribution of benefits in he intervened territory, and; (v) that the State of Chile fulfills its role as guarantor of these rights.
  2. Participation and Oversight. The procedures for the application of Article 6 must include robust citizen participation processes, based on international best practices. Participation and transparency are fundamental safeguards to validate these mechanisms. Effective oversight of all safeguards is also essential. It is recommended that agreements under Article 6, especially Article 6.2, include funding mechanisms for monitoring and oversight, following international best practices, such as ongoing third-party audits of their implementation/operation to ensure the rigor of the process.

Chile must move forward to align on Article 6 with clarity, experimentation, and transparency,

  1. Strategic Definition. It is of utmost importance that the State defines and/or establishes general guidelines, regulatory frameworks, procedures, sectoral and/or territorial definitions, or a positive/negative list of initiatives/projects to clarify where and how to direct the incentives and actions of the various stakeholders. In addition, progress should be made in defining mechanisms and procedures for managing the corresponding adjustments and between project and/or initiative proponents and the respective government authority. These elements will provide clear signals to the different sectors, including both national and international collaborators.
  2. Learning and Experimentation. Recognizing that the international community is in a learning process on how to enable and use the different cooperation mechanisms of Article 6, particularly Article 6.2, the group urges progress using existing tools, technological solutions and standards, along with experimental piloting processes, first, in territories where there are better conditions for implementation and always ensuring the application of best practices and their respective safeguards.
  3. Transparency and Collaboration. It is essential to clarify and communicate in advance the functioning of the mechanisms of Article 6 and its safeguards in order to achieve an optimal and adequate distribution of benefits in the territories. We must also highlight the mechanisms related to fostering the involvement, collaboration and empowerment of local communities and indigenous peoples, through their own organizations and representative institutions related to these issues.

Climate Action Teams (CAT) can play an important role in promotion, technical support, and multisector collaboration.

  1. Active Promotion. Climate Action Teams can play an active role in promoting the use of Article 6.2 in Chile, through proposals for aggregated and simplified Measurement/Monitoring, Reporting and Verification (MRV) methodologies, as well as its ability to bring together diverse stakeholders in a multi-sectoral and multi-level cooperative pilot approach.
  2. Technical Support. Climate Action Teams could play an important technical role in fostering the incorporation of high social and environmental standards in GHG mitigation initiatives and cooperative agreements, as well as supporting and promoting capacity building, technology transfer and experience sharing among relevant actors at the local and global levels, including the public, private, academic, indigenous peoples and civil society sectors in general.
  3. Multisectoral Collaboration. The stakeholder group convened by the Climate Action Teams initiative recognizes that the implementation of Article 6 is a complex challenge that depends on collaboration among diverse sectors. It therefore calls on the public sector to communicate its progress in this area in a broad, timely and transparent manner, while expressing its willingness to support the implementation of Article 6 in a variety of capacities and roles.

 

Current Chilean Situation of Art. 6 and CAT-Chile Next Steps

At the Ministry of Environment’s Public-Private Roundtable on Article 6 that followed our dialogue, they worked on the elaboration of the Article 6 policy, considering the contributions that resulted from the CAT dialogue process. Although there is no date for the policy’s launch, we expect to learn more this year. We hope to see greater certainty on how to implement the different instruments and mechanisms that operate under Article 6—especially for Article 6.2, under which a CAT Agreement would operate.

In addition, CAT Chile will continue to develop the understanding of the mechanism and its advantages both in Chile and in other potential host or partner countries. In the coming months CAT Chile is coordinating a series of bilateral dialogues with peers in New Zealand, focusing on three specific audiences: (i) modelers, to exchange experiences in the use of projection models to evaluate potential additional GHG reduction scenarios; (ii) stakeholders, including representatives of the public and private sectors, NGOs and academia, to address potential actions and policies to accelerate decarbonization and its feasibility, the viability and potential of CAT to contribute to it and the challenges it would face; and (iii) Indigenous Peoples, to discuss their perspective on Article 6, as well as the main social and environmental safeguards to be considered in a potential agreement.

 

 

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“Nothing about us without us: The case of JREDD+ in Colombia.” The importance of including all stakeholders, especially affected communities, at the decision-making table.

By / Bio / Twitter profile / Published: March 16, 2023

This blog was authored by Environmental Defense Fund economist Luis Fernández Intriago and Universidad de Los Andes professors Jorge García López and Julián Gómez Gil.

The saying “Nothing about us without us” is widely used among Indigenous Peoples and Local Communities to emphasize the importance of involving them in policies that govern their territories and communities. The expression serves as a call to action, highlighting that those affected by specific issues should be included in making policy decisions around them.

However, policymakers and researchers consistently decide on policy design and construct models without consulting and considering the opinion of the affected communities and key stakeholders. Efforts to stop deforestation are a clear example of this: new policies go into place without any input from communities that rely on forests for their livelihoods, cultures, or basic survival. These local and Indigenous communities are an untapped source of wisdom, leadership, and capacity to support efforts to conserve rainforests.

To remediate this, Environmental Defense Fund, Universidad de Los Andes, and the Centro de Estudios Manuel Ramírez, right since the beginning of the project, started an engagement process in Colombia to demonstrate how engaging key local and Indigenous stakeholders could lead to better policy design to protect forests in the country.

Why Colombia?

Colombia faces enormous challenges with deforestation: 184,000 hectares per year of natural forests were destroyed between 2017 and 2021. Deforestation accounts for 33% of the country’s total climate-warming greenhouse gas emissions. Thus, halting deforestation is critical for achieving the country’s Paris Agreement commitments (called “Nationally Determined Contribution” or NDC).

As in many other countries, the AFOLU (Agriculture, Forestry, and Other Land-use) sector is not subject to regulations in Colombia. However, this presents an excellent opportunity for the Colombian government to leverage private finance from national sources—such as through the upcoming Colombian Emissions Trading System[1] , which must be implemented by 2030—and international sources —such as the LEAF Coalition— using jurisdictional REDD+ (JREDD+) crediting. JREDD+ programs extend the REDD+ framework for sustainable forest management and conservation by addressing deforestation at the regional or ‘jurisdictional’ level—protecting forests across wide regions instead of plot-by-plot and even resources.

Climate mitigation is now a top priority for many individuals, governments, and corporations, creating strong demand for ways to stop deforestation in tropical forest countries in high-integrity ways rapidly. Our research finds that government funding required to reduce deforestation levels consistent with Colombia’s NDC could drop from $900 to $75 million when national and international private finance is harnessed.

The Study

Our study aimed to identify inclusive, equitable ways to include JREDD+ in Colombia’s climate mitigation policies. We established three parallel and interconnected pillars: first, we focused on engagement with primary stakeholders. Second, we constructed a model to illustrate how JREDD+ may help Colombia meet its NDC target cost-effectively while benefiting local communities. Third, we prepared a policy design that government can use as a guideline to integrate these approaches.

Engagement

At the beginning of the project, we knew we had to start by engaging with stakeholders to explain JREDD+. Our ultimate goal was to include the feedback and reflect relevant stakeholders’ needs—including the national government and public institutions, Indigenous groups, smallholder’s associations, NGOs, and educational institutions—in our results. We knew that communication between our research group and people who could be interested or potentially affected by the research project was crucial if we were to produce and share credible and legitimate knowledge. The knowledge acquired through these interactions can set the stage for an effective and equitable JREDD+ program in Colombia.

Source: Photos by Julián Gómez Gil.

In 2022, we hosted four engagement sessions in Tena (April 23 & 24, Cundinamarca), Florencia (May 5 & 6, Caquetá), Bogotá (October 14), and Mocoa (October 26 & 27, Putumayo). These sessions focused on the participation of representatives of the Amazon Indigenous peoples (OPIAC, OZIP, ACILAPP, etc.[2]),  other local communities and land users (farmers, cattle ranchers, and smallholders associations), NGOs (Amazon Conservation Team, WWF, Natura Foundation, Fondo Patrimonio Natural, etc.), private organizations (Emergent, Amazon Global, Permin Global, ALLCOT, Asocarbono, etc.) and national and subnational government institutions (Ministry of Environment and Sustainable Development, Sinchi Institute, Corpoamazonía, etc.). During these community meetings, we worked hard to improve participation but also set realistic expectations, and engaged in open-ended discussions where training was provided to the attendees regarding the formulation of projects of conservation, carbon markets, REDD+ projects, JREDD+ programs, guidelines of the ART-TREES standard and the operation of the LEAF call for proposals, through technical presentations and educational activities, and promoting the constant participation of the actors to create scenarios for debate and resolution of doubts.

In the same way, these spaces were used to formulate questions to the different actors, which were resolved both through open debate dynamics and through collaborative work activities, taking advantage of a closer and more direct dialogue with each one of them and a greater availability of time to delve into topics of interest. This form of participation was very well received by the Indigenous Peoples, who invited the work team to implement similar activities more frequently and in the most remote territories so that capacity building can be held and the local context is better perceived.

Given the scale of a JREDD+ program, the interaction and negotiation between local actors, institutions, intermediaries, and current individual REDD+ projects are essential. According to the discussion with stakeholders, a common problem associated with the participation of key actors and interested parties in individual REDD+ projects is that these actors tend to be treated as beneficiaries rather than partners. As a result, local communities and interested parties perceive that the design of incentives, local capacity, delivery mechanisms, transparency provisions, and distribution are only partially fair. This led us to consider fairness, representation, and transparency as critical components of policy design.

Modeling

We modeled a mechanism to integrate the potential funds generated with a JREDD+ and a national emissions trading system (ETS) to accelerate the reduction of emissions from deforestation. Mainly, we considered a scenario under which Colombia applies the LEAF coalition model on a national scale of a JREDD+ at the national level. At the same time, to ensure representativeness, bargaining power, effective resource administration, and a fair distribution of benefits, we proposed an internal administrative division of Colombia into five jurisdictions: 1. Caribbean region; 2. Andean region; 3. Pacific region; 4, Orinoquía region; and 5. Amazon region.

Our modeling revealed that integrating a JREDD+ program with a National ETS could be a cost-efficient mechanism to reduce the externality costs and disincentivize the overall GHG emissions of Colombia following the country’s regulatory framework, the emissions trajectory, and the mitigation objectives. These mechanisms could be used to generate and allocate economic resources to ensure efficient emissions mitigation, the incorporation of safeguards (such as environmental education), and the minimization and/or compensation of adverse socio-environmental interventions. In addition, the modeling results imply the generation of co-benefits (economic, social, and environmental) that contribute to the development of ethnic communities, local communities, and other private land users.

Policy Design (Results)

After receiving input from stakeholders and results from our model, we prepared a policy design that the government can use as a guideline to integrate JREDD+ inclusively and equitably. Here are our results:

  • Inclusive negotiating for benefits-sharing: To build a JREDD+ in Colombia, stakeholders demand a significant role in negotiating the benefit-sharing system. In this regard, national and subnational agreements should be established to achieve at least the following three main objectives: 1) provide effective monetary and non-monetary incentives; 2) contribute towards building legitimacy through a fair and equitable distribution of resources, responsibilities, and bargaining power; 3) include local actors in the decision-making process and recognize them as partners rather than beneficiaries.
  • Use vertical and horizontal benefit-sharing to equitably distribute benefits and negotiating power: A vertical benefit-sharing approach uses national voluntary and regulated market funds (ETS) to distribute benefits among national and subnational governments, non-governmental actors, intermediaries, NGOs, and facilitators. These transactions are carried out to ensure the operability of the program. On the other hand, horizontal benefit-sharing seeks to distribute the remaining benefits as incentive payments among and within communities, households, and local stakeholders. A fair design of benefit sharing must be vertical and horizontal to guarantee the bargaining power of the actors involved in deforestation and conservation activities.
  • Centralize decision-making, but include regional representation: Our main policy proposal is to centralize the decision-making with a single National Board of Directors. This board would be responsible for making central decisions and directly managing the resource flow. On the other hand, a Jurisdictional Board of Directors composed of representatives from each of the six jurisdictions must be created to guarantee the representativity and bargaining power of the different actors. This board will function as a participatory body overseeing operational decisions that a respective Jurisdictional Operating Unit should execute. With this management structure, it is possible to use the three sources of funding (JREDD+ results-based payments, the ETS, and the carbon tax) and to effectively distribute the benefits among implementing partners (NGOs, private sector, etc.) and land users (Indigenous Peoples, local communities, farmers & ranchers, etc.)
  • Leverage allowances from emissions trading system to support efforts to conserve forests: In our study, we assumed that much-needed finance for forest protection may come from two different sources: a nationally managed fund constructed using resources from the international voluntary market and from a locally regulated market (a national ETS), where regional and local public and private institutions intermediate implementation with local communities; and a project-based fund where national or international funding goes directly to projects, with resources from both the national general budget and payment by results or other international cooperation (JREDD+). To integrate both mechanisms and be consistent with Colombia’s climate law, we propose that 20% of the cap established by the ETS can be offset with forestry emissions reductions using a jurisdictional approach. In that way, the allowances allocated by the ETS to the forestry sector will generate an additional source of income to reduce deforestation.

You can read more about our study and policy design here. In general, our recommendations in this project were derived and enriched from the participatory processes we carried out. The participants’ comments helped us to refine, redefine, and validate these recommendations.

As Colombia works toward implementing its Emissions Trading System by 2030, we encourage them to consider these recommendations to inclusively and equitably incorporate JREDD+. We encourage them to consult with stakeholders such as Indigenous and locally affected communities to develop climate policy.

 

[1] The Colombian Emissions Trading System is scheduled to be implemented by 2030 according to the Law 1931 of 2018 and Law 2126 of 2021.

[2] OPIAC- National Organization of the Indigenous People of the Colombian Amazon, OZIP- Organization of Indigenous People of Putumayo Department, ACILAPP- Association of Traditional Authorities of the Indigenous Peoples of Leguizamo Municipality and Upper Predio Putumayo Territories

 

 

 

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