Institutional Mechanisms for REDD+ - Case Studies Working Paper

2.2.3 WHAT INSTITUTIONAL SYSTEM IS CONSIDERED TO CHANNEL REDD+
BENEFITS?
In a technical note shared in March 2011 67 the NC-REDD+ identified five possible sources of REDD+
funds:
� State budget funds (e.g., National Forest Fund, trust funds for protected areas);
� Independent National REDD+ fund (yet to be created), eventually with entities in each Province;
� Private investors and buyers on the international carbon market, specifically for REDD+ pilot
projects that will have already started before DRC‘s REDD+ institutions are in place (e.g., Nouvelle Société
d’Agriculture, Culture, et Élevage [NOVACEL] project in Ibi-Batéké described later in this document);
� Traditional foreign aid contributing to the implementation of REDD+ preparation and subsequently
of the REDD+ national strategy (e.g., foundations, bilateral aid, etc.); and
� Traditional private financing mechanisms, such as foreign direct investment, bank loans, and projects
implemented by international conservation organizations on private funds.
According to the NC-REDD, REDD+ initiatives and projects will be funded directly by these sources, or
indirectly through intermediary institutions, such as the National Forest Fund, or trust funds for protected
areas. It is not clear yet if the national REDD+ fund will be considered an intermediary institution or a
funding source, but it seems clear that it will not funnel all REDD+ funds as is planned through a similar
mechanism in Tanzania.
The National Strategy is expected to provide more details on how (and whether) each of these funding
sources will reach local communities. What remains to be clarified is how this broad scheme will reconcile
with existing environmental benefit-sharing rules established by the Constitution and the 2002 Forest Code.
If DRC adopts a carbon rights regime establishing that carbon is a national resource (on the basis that the
State ultimately owns all land and underground resources), carbon revenues will become national revenue and
likely fall under Article 175 of the Constitution and implementing regulations will likely follow those defined
in the 2002 Forest Code (Box 2.3). One possible outcome would be that carbon revenues (defined as net
benefit from market sale of carbon credits) generated by REDD+ projects on privately held land are taxed
similar to forestry and mining activities. The product of these taxes would then be shared between Provincial
and National governments according to the rule established by the Constitution and/or the Forest Code.
67 Cadre de mise en oeuvre interimaire de la REDD+ en RDC : Vue d‘ensemble et Propositions, note technique prepared by NC-REDD, March 2,
2011.
PRRGP INSTITUTIONAL MECHANISMS FOR REDD: CASE STUDIES – WORKING PAPER 27