Regulatory, policy, institutional environment in Kenya : Challenges, Opportunities and Recommendations for private sector participation in REDD+ Erastus W. Wahome, Ministry of Finance – Kenya, 2nd April 2012
Introduction • The private sectorhas an enormous role to play in undertaking the investment and technological innovation that will underpin low carbon growth, providing finance for mitigation and adaptation, adopting lower carbon production processes, and encouraging and facilitating more climate conscious REDD+. • The potential of the private sector to scale up investment in opportunities associated with climate change is high: globally, 60% of climate finance is estimated to originate from private sector.
Cont… • BUT this cannot happen unless a clear regulatory framework and policies are in place to provide a better environment for the private sector investment in RED+. • Clear and appropriate incentives need to be created. These include: Policies, Regulations, financial incentives etc. • For example, Policy incentives will no doubt determine the scale and nature of private sector involvementin REDD+
Cont… • The establishment of a clear policy framework is important since it creates an environment that is conducive to private sector engagement. • It gives the private sector greater confidence to undertake REDD+.
Cont… • Reviews and studies undertaken suggests that consulting and partnering with the private sector in developing REDD+ strategies can help increase the feasibility and market-friendliness of policies that are proposed. • Identifying and overcoming the barriers to investment in REDD+ will be particularly important.
Cont… • Policy makers need to establish rules of the game including revenue sharing mechanisms between the project developers and other beneficiaries. • There could be more win-win scenarios if all parties work together and find innovative and effective solutions to promoting sustainable REDD+ activities in the Kenya.
Regulatory and Policy framework in Kenya REDD+ Legislation • Kenya has no specific regulation or policy on REDD+ • But there exists broad range of sector policies and regulations, e.g. environmental conservation, forestry, energy, manufacturing, natural resources or foreign direct investment, are of relevance.
Institutional framework REDD+ coordination and mainstreaming • While Kenya has made remarkable move in prioritizing and engendering environment and climate change in her development agenda, it is important to take cognizance of the fact that coordination and governance of the same remain spread across different government Ministries and Agencies. Five government Ministries are involved: • The Office of the Prime Minister (OPM) which houses the National Climate Change Committee (NCCC) charged with the overall climate change coordination and provision of guidance on climate change activities to the implementing sectors and the stakeholders;
Cont… • Ministry of Environment and Mineral Resources where the National Climate Change (NCCRS) Secretariat sits with the wider mandate of implementing the NCCRS and coordinating sectoral climate change activities. • Ministry of Forest and Wildlife under which the Kenya Forest Service (KFS) falls. KFS is in charge of the REDD PLUS Readiness Plan;
Cont… • Ministry of Finance whose Carbon Finance Unit (CFU) tasked with climate change policy financing and investment sand enhancing Public-Private Participation in carbon projects; and • Ministry of Planning, National Development and Vision 2030 whose planning division has the mandate of mainstreaming climate change in development plans
Cont… • Besides the government Ministries and agencies, the Kenya Private Sector Alliance (KEPSA), individual industries and National NGOs like the Kenya Climate Change Working Group (KCCWG), Kenya Forest Working Group, Pact-Kenya are also involved in environment and climate change initiatives. There are also international NGOs such as Africa Wildlife Foundation (AWF), World Wide Fund for Nature (WWF), International Union for Conservation of Nature (IUCN), OXFAM, CORDAID, CARFOD, Norwegian church aid henrichboll foundation and Care which undertake environmental conservation and climate change-related activities.
Challenges • Funding • Limited Engagement between the private and the public sector on REDD+ • Poor coordination and duplication of efforts; • Overlapping mandates between the various players • Lack of data on private sector involvement. • Policy formulation and openness • Political uncertainties in the country • Uncertainty of carbon markets
Opportunities • The public and private sector participation provides an opportunity for involvement, ownership and partnerships in environmental management and conservation. • Room for open and constructive dialogue between the public and private sector to determine the rules of engagement • Leveraging private sector investments in REDD+ is possible. SREP provides a good model.
Cont.. • Carbon Investments and Trading in Kenya will provide the right incentives for the private sector. • Draft policy in place • Draft to be validated in May this year by experts • Parliamentarian Committee on Environment awareness creation workshop in June this year.
Recommendations • The establishment a regulatory and policy framework will provide a better environment for private sector to participate in REDD+. • To unlock and scale up private sector investment, an attractive ‘investment climate for REDD+ initiatives is required to remove the key barriers to the deployment of private capital. • A broad institutional and fiscal reform and increased financial commitments through a joint government-private sector effort is required.