 Ladies and gentlemen, welcome to this panel discussion on Red Plus. It's very good to see so many of you here. I can, of course, quite understand your interest in the issue. Red Plus, as we'll shortly hear, is one of the most imaginative, ambitious, even audacious environmental initiatives ever undertaken. And it's also one of the most necessary. Around 12 to 18 percent of greenhouse gas emissions come from deforestation. Cutting those emissions by reducing deforestation and forest degradation will often be the cheapest mitigation option available to governments. It's also likely to be the most felicitous because of the many additional benefits quite apart from carbon sequestration and storage that forests provide. They are, as many of you will very well know, crucial to hydrology, rich in biodiversity and also provide likelihoods to millions of people. We have to keep all of those terrific benefits very closely in mind because, and I hope our panelists and speaker will very much grapple with this, Red Plus is also just incredibly ambitious and likely in many places to fail in. To understand it better, many of those who attended the last Forest Day in Cancun wanted to hear more from people who grappled with Red Plus projects at the lowest level. So it's my very great pleasure to introduce to a group of experts who very much fit that description. Paolo Valetto, our keynote speaker, is a senior researcher from Amazon an outstanding environmental research institute in the Brazilian Amazon. He'll tell us how to avoid deforestation in Brazil and perhaps how not to. Turning to our three highly respected panelists, we have in the middle Brea Adams from the Query Global Investments. He's taken a very long hard look at a number of Red Plus projects from an investors perspective. I'm looking forward to him telling us quite how crazy or not Red may be. Ramon Lumbonamo is the national director of WWF in the Democratic Republic of Congo. This is a country of course of extraordinary importance for forest conservation and also a place, as we have been reminding during the current messy presidential elections in that country with a great deal of political uncertainty. This will impact enormously on Red Plus and its future there. Daiu Rezo Sudamo is an academic at C4. It has a great and I hope not too painful experience looking at the historic recent efforts to get Red Plus off the ground in Indonesia. I'm enormously looking forward to hearing their views. If I could just make one advanced note for you. Those of you who haven't been to a forest day before will not be aware of this. We'll have a vote at the end of the session on a number of questions thrown up by it. You should all have access to a voting machine. I think they're available at the back. I don't know how to work them, but I'm told it's incredibly simple. Just a matter of punching in the relevant number. You don't need to press enter. If you want to change your choice, you can just press in the new number. I think there is a cancel button. You don't need to hit it. And at just one final practical point, Ramon is going to speak in French. And I think there are relevant translation kits in the back also. So if somebody wants French English translation, they should get one of those machines. Thank you very much and over to Paolo. Good morning everybody. Thanks for C4 for inviting me to this event. It's an honor to be here. What I'll present today is what's going on in Brazil in terms of trying to fight the first station. And especially considering the last decision in Cancun that is related to RED that calls for several actions against the first station, including dealing with the drivers of the first station. I think it's a very important issue. You can think of RED as having payment for specific projects, but we also need to consider a broader strategy and I'll show what's going on in Brazil in relation to that. But before going into details about Brazil, I want to show you an approach to consider the factors associated with the risk of the first station. But I think it's very helpful for me to understand what are the main components of these risks and how can we manage to tackle each of these factors. So I like to use this approach that comes from risk management. We can consider the first station as a risk and what are the key components of the first station that we need to address. And there are three main components and components that are explained. So a risk is associated firstly with a hazard and basically the key hazard is people willing and able to deforest. But people decision to deforest, they are based on the market, the demand for forest and agriculture products. And usually they are also related to public policies, especially subsidies for example for agriculture. And of course you have the population, so factors associated with population density is very important. The other component is exposure. The forest is there, there are people trying to deforest but they have to have access. So transportation infrastructure is very important. So policies that change transportation infrastructure are very important. Of course you have also natural access to forest for example, navigable rivers. And finally a forest only gets deforested if it's vulnerable. And there you have biophysical factors for example one area with very good soil and a good climate for agriculture is much more vulnerable to deforestation than another area with soil for example. But most important from our perspective here is the human side of vulnerability. You may have rules for protecting a given forest. So therefore the existence or not of rules and institutions and the quality of these institutions to deal with deforestation are very important. So I'd like to see to think about the drivers of deforestation, to think about all these factors in a comprehensive manner. So let's go to Brazil to see how things are going. And in this graph you see deforestation rates from 95 to 2010. You see a very strong variation a long time. So a critical question is what is driving all this variation. And some studies that have conducted show that until recently there was a very strong correlation of this variation with the variation of prices of cattle and soy. So red is deforestation, you see green is soy price and blue is beef. So usually when the prices, the two prices go down together deforestation decreases rapidly. When they grow together deforestation increases more rapidly too. But we also see that graph in the later part more recently since 2007 there was a decoupling of this trend. You see deforestation continued to decrease from 2007 to 2010 despite the fact that commodity prices continued to increase. So what happened there, what was the motive for this decoupling? And a lot of this has to do with new policies that Brazil has been adopted in recent years. In the past the Brazilian government we already had laws and attempts to enforce those laws but with a lot of failures. For example, when you consider environmental fines we have 9,000 fines per year but the collection of fines, the total bed of collective has been less than 1%. So with this kind of a rise the government was really pressured to change the enforcement practices. So 2007 they changed a lot of procedures and one, two critical things they did. One was have economic embargo of the areas that had illegal deforestation. So the field inspector go there and they find the area that is illegally deforested. They map this area and they have, this area is now on the internet. People can consult and the buyers of products from these areas they are now liable to environmental penalties. This made a very important difference. Another very important approach was really to confiscate goods associated with illegal deforestation and illegal logging. And one, the main, the first big example was the confiscation of cattle in a protected area. Of course there was illegal deforestation there. They confiscated 3,000 cattle inside a protected area and more than that they auctioned these cattle very fast. In two months for Brazil standards this was very fast. So this was very strong sign that the government was changing the approaches to reduce deforestation. Of course this is a very strong measure and there was a lot of reaction. Despite of that deforestation, the government was able to continue and actually there was so much pressure that the former Minister Manila Silva had to leave. But the pressure to continue the policies was so strong that the government continued to implement these policies. So the big question now is ok we have had some success. Is this sustainable? Are we going to continue to reduce deforestation? Or is there a risk of going back to the same story that we have had a strong variation according to commodity prices? So when you look at this, the first thing that is striking for me is to consider that despite all these new measures we still, in the past few years, we still have about 700,000 hectares of deforestation. This is the first thing to note. So we still have vulnerabilities for us that are vulnerable. And this is associated with some of the areas that have small land holdings that have been most part spared from these new ways of enforcement. And it's easy to understand why because it's socially and politically very difficult to impose this enforcement against small land holders. And my estimate is probably 50 to 2 thirds of the remaining deforestation there is related to small holders. So it's not enough to have enforcement. I think there we have a very good opportunity to apply the idea of having compensation for example. There are several land reform projects with many thousand families there. So the idea of paying for avoiding deforestation in these projects I think they are a very interesting idea. And also we still have problems there because a lot of these families they have access to subsidized credit that ends up influencing deforestation. But also we have to consider the risk that we may have increasing deforestation in the future because of this success recent success. There's a very strong reaction and it's going on now in Congress. Actually this week there will be a vote in the Senate about the proposal to change the forest code. And if the law is passed as it is there's a chance risk that it's going to set a sign that okay we can continue to deforest because later we can have some kind of easy way to regularize what they call this illegal deforestation. So that's a very important issue. And as I said credit is still there although it's not written that it goes to deforestation but in the end since it subsidized money it has a strong role. In the past two years the amount of credit only for the Amazon subsidized credit amount about two billion dollars and this is subsidized so we still have so it's a lot of money and we still have this associated with deforestation. So to solve this problem in the long term we really have to tackle the issue of credit for example to transform the sector we have to kill these bad incentives and actually save money to really invest in the incentives that promote forest conservation. As I said this amount of money dedicated to rural credit is very big so it's very influential in how people decide to manage forest. And then finally related to transformation of the agricultural sector it's very important to think about increasing productivity of the land that is related to forest. There's a recent study showing that only in the Amazon there are about 11 million hectares of bad basher so it's huge amount of land we have to increase productivity there and for that we need investment in for example infrastructure in the area that are already in forest research and development a lot of technical assistance in those areas to avoid demand to have new deforestation 11 million hectares is very big. And to conclude I would like to go back here and leave this as a food for thought if you are considering reducing deforestation it's very important to look at this whole picture all the components that are related to risk of deforestation and to tackle all that are very important and especially it's important to consider that a lot of these factors are outside of the forest sector for example infrastructure, subsidy for agriculture so we need to engage those players and sometimes fight against them in case of Brazil. Brazil tried to have a comprehensive approach but it has been very difficult to involve people for example in the ministry of agriculture so it's very important to have alliances or to expose this kind of lack of commitment within the country, within the government so when you have the need to assistance it's very important to have time to negotiate with these other players to have these studies to show the links between all these policies to have an effective collaboration with all these players. Thank you. Thank you very much Paolo. We'll now turn to our panelists and I won't introduce them again one by one but going from Brea to Ramon and then to Daiu they will sit in their chairs and give us seven minutes of crunchy thought-provoking introduction to their subject. So thank you very much for that introduction it's a great honour and pleasure to be on the panel here today and I have to be part of this august panel that follows such an inspiring start to the morning. My reason for being here is I represent a company called BioCarbon which is a specially established company focusing very much on land but focusing exclusively on land-based carbon opportunities and most of our investments today are focused on red. BioCarbon is a vehicle that was established by Macquarie Bank and Sydney as a financial institution and has shareholders Macquarie Bank, IFC, the commercial arm of the World Bank and GFP Global Forest Partners which is a U.S.-based timber fund manager and so collectively those three shareholders have invested $25 million into BioCarbon just earlier this year. We have right at the core of our business is a partnership that we have with the NGO for our employer international where we support that NGO in developing red projects that we believe is now a viable chance of being commercially sustainable in today's current and very unpredictable voluntary carbon markets. So our business model is to focus on projects that we believe will meet VCS and CCB and other important carbon standards and that will then generate a return from recognising condition reductions in those voluntary markets. Into the future we hope that there will be regulatory schemes that will emerge that will allow these projects to nest into regional, bilateral or ultimately one day a compliance cap-and-trade scheme that exists more broadly. But perhaps if I just make a couple of comments on our experience today to honour a number of projects and then make some comments generally about how we see the market outlook and how projects and how the carbon markets fit together. So we have focused very much on Southeast Asia and specifically in Indonesia where we support FFI in a couple of projects and are working with other partners on other projects. We also have projects in Ecuador and other parts of South America and are doing due diligence in a number of projects in Africa. But as I mentioned, Indonesia has been absolutely a focus for us for a number of years now and we focused a lot on Indonesia coming after the Bali meeting of the UNFCCC and of course RED was just a very powerful concept and since then we've been pleased to see such progress for RED but despite that progress we still face enormous uncertainties at a project level which make these projects high risk. So one project for example is in West Califantan which is a small landscape project of about 40,000 hectares and our approach there has been to support our NGO partners as they work with communities to go through a free and prior informed consent process meanwhile our carbon teams spend enormous time and effort meeting IDC best standards around the carbon performance of a project having to address permanence and leakage and all the design criteria that make those standards so rigorous. And a third parallel piece of work that happens specifically for that project is to understand the national framework that's evolving in Indonesia to understand how that exists at a local or regional level and to make sure the project moves through in a way that respects all of those different aspects to the red framework in Indonesia. And it's on that point where we often find the greatest barriers and the greatest challenges because RED is of course so new. On the one hand we really appreciate being in a jurisdiction where there is a regulatory scheme emerging which we of course like very much because it means we understand the sort of investment environment but equally because it's so new and the environment's changing so often it's very hard for us to actually plan years into the future. And that leads me to a key point that all project developers face and that is very high transaction barriers and so when we were raising funds for our business by a carbon we decided to raise $25 billion and not anymore because we felt uncomfortable having to invest sums much larger than that because of the nature of RED. So our decision was to close the capital raising at $25 billion and actually choose to say no to other equity investors because we thought that was about the right amount of capital that we wanted to responsibly invest into demonstration activities in RED. So as I mentioned, our business model is to support those VCS and CCB projects we believe can meet those standards which as I mentioned does require a pretty generous degree of rigor around each project. We focus very much on the voluntary markets because of course that's all we have today. The voluntary markets are very small sort of about a billion dollars in voluntary market activity in the last year. So a billion dollars is a relatively small amount if you think about the carbon markets which are a hundred times that and broader commodity markets but thankfully the forestry aspects of that voluntary market is the fastest growing. It currently represents about 20% of that market and the last couple of years has been the fastest growing. So we see good opportunities in the voluntary market here and now for these few niche projects but the real challenge for us is the scale. What's the opportunities of tomorrow? And if we think about the macro picture when we first started looking at this space the macro picture was incredibly attractive. A lot of the work by the IPCC forecast that land-based carbon would generate about 40% of the emissions abatement coming out of non-axon countries by 2030 so it's an enormous opportunity for emission reductions. But of course right now we don't see those compliance markets emerging there's great uncertainty as to when that time frame on phase three of red might actually emerge. So when we think where is the scale going to come from we think about the challenge you know there's so much literature around what it would cost to hard deforestation and the estimates vary from 17 through to 33 billion dollars a year so if you take 20 billion as an average of what's required every year it's a very significant sum but of course it's only a fraction of what's required in terms of broader climate change efforts so perhaps it is an achievable number. In contrast that with what public funds have been committed to date for red at that point UNFM published data which suggests that it's about six billion dollars that's been committed to red not per year but over quite some years so the challenge is to get to 20 and public funding is about six over many years so we know that we obviously need to raise additional funds and the market can be one source of those funds so we've seen examples where markets can work you know in New Zealand for example when they established a market for carbon they recognised land based carbon country moved from being a net emitter to a net sink Australia and other jurisdictions all the things we're talking about in the context of red are being recognised for compliance to great carbon now of course the challenges in red plus are so much more complex but the principle is still the same which ought to be of course that if you're generating emission reduction and if you're investing in land management that generates that one time performance then they're ought to be the appropriate value for that I think there is some pockets of optimism pockets of optimism around those few capital trade schemes that are emerging California, Australia and potentially others that have signalled they want international red to play a role in those markets and then from our perspective we see the opportunity as being those jurisdictions and countries that want to support a national approach to MRV and a nesting approach that recognises a role for communities and land holders that take action to generate emission reductions so as I said there are pockets of optimism from our perspective but what we would like to see as investors and the reason why the activity by the private sector today has been so small I could name for you there's only a handful of financial institutions globally that have committed money to the sector and the reason it's so small of course is everybody's waiting for those policy signals to emerge and really we'd see something out of UNFCCC which provided a pathway to recognition for red in a compliance framework but in the absence of that policy signals coming out of California, Australia potentially faster facilities that actually purchase performance based emissions reductions could be an important signal and then there are other novel approaches that are often count as for example you could recognise red as a quote unquote equivalent measure so there are these opportunities for policy signals that could emerge that could catalyse much larger private investments but in the meantime we think there's a really strong and powerful role for those great demonstration projects that are happening certainly this small scale but very powerful in their capacity to inspire other actors and the best projects are those that have very strong and important and lasting community benefits that respect tenure assessment that doesn't just deal with statutory rights but of course customary rights or so just perhaps holding my comments there I'm not speaking in English to force you to put your headset off because my my finest work works come in French I come from Congo in Central Africa I work for WWF and there we have in charge of three projects that work with RED I work with communities but also with governments to achieve something RED is an option that we have chosen in a voluntary way to try to give a monetary value to a forest that remains standing and to achieve that we need the two parties that are involved in this process to be trust one in the other and for this trust to be established we need those that is the communities at home and the governments at home to realize that the monetary value that they would have attributed to the forest close together then they believe that this forest is beautiful on the other hand those who have to finance this process want to know who really is what they've done what is happening within the best perspective this is our challenge we are involved in this process with everyone including the civil society. There are three main factors that condition the degradation and deforestation in Ococoa. The first of these factors is regenerative agriculture, on a green light. The second factor is, in my opinion, forestry exploitation, as industrial as well as artisanal. The third factor that many people do not know, which is still very, very important, is the wrong governance. And we are committed, as VF, to try to attack each of these factors in the project RED that concerns us. For those of us who are related to the deteriorating population, our goal in the project RED is to try to stabilize the forestry. Stabilize the forestry by making agriculture much more productive than it is with the current method. And so we teach the population the way to produce more efficient masonry, that is to say to make the land more productive and to make the masonry more productive. To make the land more productive, that is to say, sufficiently, it is a bit simplified. We have rather adopted the agroforestry system and the small units of production. To do this, we would like to associate optimal use of the agroforestry, the mineral agroforestry. For those of us who are related to forestry exploitation, many say that in forestry as it is, the wealth of the species is not very important. It is four tiges a hectare. But when we access these tiges, these four tiges a hectare, the damages are so important that it is not necessary to damage them. Next to this, when they have created the best value, those who exploit forests come to make us, the other trees that have this dimension, to produce the wood used locally. They come for a third cycle to make the rolling wood. At the end, if you look at the impact, you see that it is about two thirds of the entire mass, the mass that has been accumulated by the forestry that goes into forestry exploitation. To know this industrial forestry protection is also an artisanal exploitation. Which it is not, which it is not controlled, which is even more important than industrial exploitation. The whole combination creates a very serious problem. And so we are associated with the government to try to follow, to incorporate this exploitation so that the damages are as minimal as possible. We cannot convince the government that it would be behind us, illusory on our part, and believe that it can simply stop. They will exploit the forest, it is clear, and for that, it is enough to erase it in the best conditions. That the civil society and everything that works in conservation follows the way it is done. Otherwise, we all lose. And then finally comes the government. The government is a very serious problem. The country is 1,245,000 km away. The government is centralized, so far the decentralization is being done, so that we have already talked about forestry decentralization. But the problems of the government are very serious. There is no follow-up to what is happening in the forests. The government has the necessary means to follow this. So what do we have to do? We have thought to incorporate in the system the community to participate in the communities and the government to solve the problems. The community is like, for the moment, with the movement of the population that has arrived with the wars and all the other social movements that have come from these wars. There has been an erosion of the customary power. And the erosion of the customary power means that no one is listening to the customary chief anymore. At this point, we need to refer to the social structure of the communities and reorganize the communities so that they can take care of themselves and start discussing equal-to-equal, or at least well discussed with forestry experts and all those who use the forest. That is the government. So all these elements put together are the saturations of what we do. And again, to insuffce the trust we have started. We are only beating the bush the system of following the forest. The system that we call measurement, measurement, report and verification. This system is associated with high technology but also with the small people. High technology is the tele-detection that helps us to follow what we do. Forestry resources are its dynamics, etc. But on the ground, we make sure that as much as possible, the communities are themselves following step by step what they have done to what place. These are things that we are going to put in place. These are projects that are pilot projects. We are going to learn what we are going to do in the future. If there are any questions, I will answer them later. But I believe that the time that has passed I want to stop here. Thank you very much. All right. Good morning. Good afternoon, everyone. Given the time, I will try to give you a little bit of the flavour of the general situation with respect to red plastic in Indonesia until the present time. I guess I will start by providing some context within which red plastic is operating in Indonesia for those who are unfamiliar with the Indonesian situation. There are basically five major points that I think is important to understand the environment within which red plastic is working in Indonesia or not working. The first one is deforestation. The deforestation rate in Indonesia continues to be high. There are drivers of deforestation that are important, mostly the conversion of forest lands to other uses. There are variations in the deforestation rate among regions. Some areas are high and some areas are very low, such as Papua. The second point is important is that natural resources is the pillar of the Indonesian economy still. It contributes, for instance, 70% of the total non-tax state revenue or around 30% of GDP, just to give you a playbook. The third point is that there are serious competition for forest lands from other sectors, namely agriculture expansion in large scale oil pump for Indonesia as well as the expansion of mining activities. These are observed through a trend of rapid land conversion to agricultural commodities and large tracks of forest areas allocated for mining activities. It also is observed through increasing both foreign and domestic investments in this end mining sector. Consistently, mining commodities have increased in terms of production, in terms of export. For instance, the electric generation for the entire Indonesia is 80% powered by coal. A lot of the coal deposits are found in forest lands. The third observation related to the competition for forest lands outside the forestry sector is from the financial sector. The domestic financial sector is very supportive of oil, palm and coal mining investments, for instance, in a sense potentially competing with red plus investments. The other point within which it's important to understand is that with regard to the administration of forest lands in Indonesia, 70% of the land in Indonesia is forest land and it is state land, and it is under the auspices of the central government. However, the decentralization has given now the local government authority to issue licenses of forest land based activities. A major issue related to that is the overlapping licenses allocation of forest lands. And somewhat similar to Brazil, there is a lot of development that have been illegal so that the special planning is very difficult to be resolved. The other point is the governance condition. In general, all the great strides of improvement have been achieved in the last several years in governance. There remains to be major weaknesses in, for instance, effective accountability mechanisms, decision making, which is not transparent and non-participatory, in particular with regard to natural use and extraction and licensing. The other one is that there is a five-year cycle of political dynamics both at the national and sub-national levels that several studies have seen to affect decision on natural resources and then thus potentially on red. So, what is the state of play of red policy in Indonesia today? It is basically characterized by parallel but often separate processes of red at sub-national and national levels. Policies and regulatory framework on red is relatively slow-moving, associated with not only technical but also importantly political reasons. And national processes and legal regulatory framework affects red progress at national level and on the ground. So, what has been done at the national level, as many of you know Indonesia, the president of Indonesia is committed to a 26% reduction of greenhouse gas by 2020. However, the question of the 26% reduction versus 7% economic growth and the political process surrounding that has been influencing the ways in which the process of red policies and then in turn the progress of red projects on the ground have evolved. What have been done at the national level is policies on suspending the conversion of natural forests and peatland with the moratorium for two years. However, with the exception of licenses already in process, also projects vital to the nation. Indonesia is also working on the national strategy for red. So, it has started since the mid of last year and until today it hasn't been finalized. There are some regulations in place for red related to the procedures for red, the procedures for licensing of red, but some of them are not applied in particular yet, in particular the benefit sharing allocations. Currently, the government is working on a safeguard information system. It's being developed. What about on the ground and at sub-national levels? In the beginning of 2008-2009, there were a lot of activities related to pilot red projects on the ground. There were many initiatives at the sub-national level. There was strong interest and support, resulting at the moment about 30 projects of various stages. That includes very initial stages, surveys, also interested financiers, partners, proponents and investors, and also projects in process of obtaining licenses. The types of projects include demonstration activities, such as the project that is supported by the Australian government in Central Kalimantan. Also, many of them take the form of restoration ecosystem licenses. Activities thus far have been focused more on readiness, for instance, collecting socioeconomic data of the area and of the villages, community awareness and some consultations, PDDs, the application of the procedures for applying for licenses, trying to increase the capacity of villages, including the monitoring village forest, for instance, determining and clarifying boundaries, both at the village level and the project, establishing village institutions, determining livelihood alternative strategies, also, of course, collecting biophysical data, such as the forest cover. What the Global Comparative Study on Red, C4's Global Comparative Study on Red has found is that on five red projects in Indonesia, with respect to villages' knowledge of red plus, it appears that there are some hesitation on the part of project proponents to inform affected communities of red. This is due or associated with the fear of raising expectation due to the very uncertain situation, uncertain environment within which red is going or not going to be implemented. In general, so with the exception of a donor-funded demonstration project in Central Kalimantan, as I mentioned before, implementation on the ground has evolved quite slow, associated with a variety of reasons that are intricately linked to the dynamics at the national level. The first one is the legal basis for implementing red, example in acquiring obtaining licenses, clarity in who has the authority to determine the forest that's setting a set of projects. It takes time to obtain a result, and it's very key to if the projects are going to move ahead. And there's also an issue of tenure. The Dejur tenure necessitates obtaining management rights, for instance, for a project in West Kalimantan to secure a village forest, which they did, but only 2,000 hectares each. So the three villages that have obtained village management rights that will evolve later, they will apply for restoration ecosystem licenses. And it's also at sub-national level, the governments often have different priorities vis-a-vis red. It is clear in several districts in Central Kalimantan where the district government is very keen on developing oil pump, for instance, suggesting the competition if red projects are going to be developed. So under these conditions of uncertainty, despite the opportunity to reduce emissions and also acquire other benefits, as well as improve governance in Indonesia and in forestry in general, there are issues. The regulatory framework is not in place but the ones that are in place, some of them are not and cannot be applied. In consistent land administration, central government, local government and the linkages are often not in harmony. There are tenure issues, there's community distrust, there's political disconnect between local government and central governments. Financial institutions strongly supporting other land-based investments that can easily compete with red. In effect, implementation of red is a challenge and in many ways involve hard choices. Thank you all very much. So we've heard three excellent introductions to the three most important tropical forest countries. We heard from the Democratic Republic of Congo where there appears to be an absence of top-level political will to work on this problem. Extremely poor local level organization and therefore progress on red is exceptionally difficult. We heard from Indonesia where there is more progress, where red plus institutions are more convincingly, I think it's fair to say, being built where moreover there's been a lot of attention in the wake of the Norwegian intervention on funding but nonetheless there is still a clear problem with political will, with countervailing a political economy which is built around extraction and in which corruption plays a large part. And I think very clearly signalled why this political will is absent. There is no visibility on financing for red plus. We have no certainty where the billions of dollars that we all think are required to give their finger the chance that it deserves are going to come from. Compliance markets are still rather a distant dream and I would just really raise one question for our panelists. What in the absence of that certainty can be achieved to build confidence amongst developing forest countries that red plus is a goa that they should invest in real capital and resources in this initiative and perhaps show that progress is possible and thereby convince investors even in the absence of certainty on the large amounts of money that will ultimately be required convince investors that this is going to be viable. I think I'd like to start the panelist discussion that we're now going to go to with Paolo where terrific progress has been made on slurring deforestation. But red plus appears to be rather a minimal part of that story. Brazil we know is critical. If there's going to be a great example to convince other tropical forest countries to come along to change their political economies in the way that is required, they must look to Brazil. And I'd like to hear from Paolo where red plus may stand in this emerging effort in Brazil. How seriously Brazil is going to take red plus? We'll have a short discussion about 10 minutes or so and then we'll open things to you guys and I hope we'll have a good 20 minutes of vigorous discussion from the floor. Okay, I think it's important to first to think why Brazil changed the policies that led to some success recently and there are some debates about that. But I think some factors we're important. We're important. I think in Brazil, Brazilian society increased the awareness about issues related to climate change because it had some dramatic events, a huge drought in the Amazon. This was in 2005. We have also increasing problems in urban areas with landslides. This also raised the awareness about issues related to climate change. I think there was also a relationship with the Brazilian desire to be a major exporter of biofuels. And we have production of sugarcane outside of the Amazon but this production raises the issue of is sugarcane production going to move to the Amazon or displace cattle range from other regions to the Amazon. So Brazil was concerned with this contradiction policy. Well, it's going to be hard to export ethanol if we have this risk of increasing deforestation. So I think there was national interest to have this policy. And I think also it has been very important to debate about do we need more deforestation? Since we have huge tracts of land that already deforested and are not properly used, why do we need more deforestation? And the studies about this showing that to have a lot of degraded land, bad pasture was also very important in this issue. And also the information showing we can improve productivity in these areas that are already deforested. So I think there are many factors that help Brazil improve even without having the promise of having red money. Of course, if there is money, it's going to be good. And I think there are, as I said, there are areas that are appropriate to have resources in the case of small holders. There's a lot of people there that would benefit of having this kind of project. So I think without having the money, Brazil made some moves because it was important for self-interest. I don't know if our panellists would like to raise any comments on what Paulo has just said or on what each of you said in your presentations. I have one question which is to Brea. Are you raising your $25 million investment? Do you regret that it was as big as it was? Certainly we don't regret. The reason we haven't raised more is simply because we don't see the sort of high-quality projects that give us confidence to be able to do more. We certainly see great projects in huge volumes, but because of all the complexities we've read, most of them aren't suitable for private investment. So until we start seeing more of that track record of success where the private sector can invest in demonstration projects, then I think it's hard to imagine the very fast scale-up we need. But maybe one more general comment I'd make is obviously there is much that can be done to improve spatial planning and access to degraded lands and certainly Indonesia is doing great things and there's much opportunity there which Dajou would know better than me. But I wanted to make a comment just about carbon markets and certainly the world's pretty uncertain. We are far away from the compliance markets as you described as a distant dream. But when the CDM got started that was pretty radical and confused and difficult and it did emerge into quite a large market and it did transfer large funds into developing countries. So I think with all new markets they're always difficult and slow to start and there are a few pockets where carbon markets might be a solution that complements other activities in red for some parts of the world, some jurisdictions. Thank you. I would like to make a comment on the issue of capital markets and the progress that the Red could make in Hong Kong. At the start of the fact that there isn't a lot of money invested in the Red for the moment, on the part of the international community, we will have to understand that the government in Hong Kong has made a lot of efforts at the start of the fact that there isn't a lot of money. They have reviewed the framework in which the forest sector operates. There is a new forest code that has been instituted. There is a reform of the forest sector that has been undertaken. There is also a programme of forest and conservation that has been put into place, all of this with their own means. So there is a certain will and a policy to do things. But there are questions that I ask. The first question is to know if it's not about the sky once again, that we want to show you the valley. When you die, you will have this cake one day. That's the question that I ask. Okay, you just said five dollars for the tonne, for the carbon sequestered tonne. But if we cut our forest that we put palm trees in there, the same equivalent tonne, it brings us 50 dollars. What do you think? And on the other side, they say, listen, that's good, that's good. Red, Red, that's good, but we want to keep our forests, but we also have the right to develop ourselves. And on the other side, there is another question that comes up. Okay, Red, okay, but tell us, is it still an ecological colony that you want to do in Africa? Because when we tell you to reduce your emissions over there, you say to keep your forests, we will help you to keep them. But why do we keep our forests when you don't want to reduce your life? Those are the questions that I ask. And they are real for a development that is going on here. That's it. Dario, do you have any comment you'd like to make? Yeah, I think one thing similar to Brazil, I think biofuel expansion for Indonesia is also something to watch for in terms of competition for Red. However, at the moment, because the subsidy for fuel is large, it's probably not an immediate threat, but in the long term when the government is forced to lift the subsidy, then it might be a threat in terms of more forest expansion and more traction for biofuel. Okay, thank you all. And may I invite you all to make any submission or raise any question that you would like to? There should be microphones in circulation, I hope there are. Yes, madam and the gentleman next to you. Madam, you? Yes. Is that okay? Do we also have microphones doing the rounds? Yeah, it's working great. Thanks very much. My question is to the gentleman from the Congo, and I just wanted to find out we've heard a lot about pilot projects in DRC and there's been a great deal of progress. I'm wondering how far can we push these pilot projects? In particular, I'm interested in your thoughts on who owns the carbon credits in DRC and also any clarity that the government has developed around land tenure. So ownership of land as well as carbon credits, because these projects, WWF, as you mentioned, is doing them. How far though can we push them if that remains a question? Yeah, forgive me your own. Let's just take a couple more questions and then we'll get the responses of our panellists. Sir, would you like to, and a third person like to line up to a microphone? Please step up to this microphone at the back. Mine is just a few comments because what I gather from the panel is that red is not actually working. Working the way it should be. Why is he so? It means all of us, we are not doing the right thing. Red is good. People that are implementing the red are not doing the right thing. The moment we think of doing the right thing, then we will have a better red. Now the comment I want to make is that when you look at the publication that are here, you see some picture of people that are, you know, not making it the way it should be. I used to be one of them. I was born in the forest, grew up in the forest, went to schools in the forest, went to the universities to study forest, and I came back to the forest. And most of the knowledge that I gained from the technology or whatever that I gained, I was able to use it correctly in the local environment. I think the problem we have is that we should try as much as possible to get the people that are relevant. We are here to support them, to do the work that is the local people because they are the custodians of it. They are the first scientists in the forest. They know everything in the forest. What we should do is what we have, you know, by way of technology achieved is what we should teach them, you know, give to them to use in order to be able to develop what is lacking in the environment. The second thing is that employment. We should do it in a way that we create employment to the people in the local environment. Not employment by giving them maybe monthly salary or what, but we can employ them to regenerate or to restock the existing forest. Because if you restock the existing forest very well, the forest we develop. But if you now bring a kind of a new species, for example, in my country, Nigeria, there was a time we caught all the forests of about 500 species plus to plant a particular species that is thick. Once you do that, you are changing the ecology of the soil, you are changing the ecology of the environment, you are changing the ecology of the people. I think we should try as much as possible to get the people in the rural area, in the management, in the exploitation of the forest that we are delivering. So we must try as much as possible again that if we are cutting down a tree from the forest. Can I ask you to wrap up your comments quite soon? Yeah, that's what I want to do now. If we are cutting down a tree in the forest, we should use that 300%. When we get the timber or whatever plants from it, the waste from it, we must also find a means of using it so that we will not put prayer on the forest. But when we cut down a tree and then we use just about 50% of it, 50% is waste, then we will go back to the forest to cut. I think this is the thing we should do to make it work. Thank you very much indeed. And you sir at the back. Thank you Mr Chairman. I come from Sierra Leone. Most of you would know that Sierra Leone until one year ago was the poorest country in the world, the least developed country. We also are the beginning of the West African rainforest. We have only about 1% of the forest, the area forested now, but we have 33% of the biodiversity of sub-Saharan Africa. So we know the essence of forest. Unfortunately, being one of the poorest countries in the world, and we don't enjoy being the least developed. Recently, the Gola Forest, which is one of the most important forests, it's the beginning of the forest region as I said in West Africa, has very huge stockpiles of diamonds. And the Gangari Hills, which is also a small forest reserve, has up to 22 million ounces of gold discovered. Now being in this deplorable state of poverty for a very long time, you have this huge stock of resources underneath this forest. It makes it very difficult for people to actually keep the forest and continue to enjoy poverty. In the last three years, the reason why we've actually moved just nine spaces within three years is because of development in mining. We had pre-mining companies, Africa Minerals, London Mining and Glove Cold, which came in and started being royalties. Within that very short period of time, we have moved nine spaces from being the least developed to the ninth least developed. And there is even a projection that if the trend continues within the next five years, we'll move another nine spaces. Now this is the issue we have in West Africa. Poverty and of course the emergence of technology which can find minerals without having to be intrusive is making roads very difficult. My colleague here from Nigeria has just told you about the difficulty of engaging the local communities when they are extremely poor and also the fact that even the multinational companies are not adhering to local laws. So this is just highlighting the difficulties. Thank you very much indeed. So three interesting contributions. A question which has clearly been put directly to Raymond and then two submissions to Crete occurs on behalf of local people who are not benefiting sufficiently. I think we would all agree from this fledgling, bold, new imaginative conservation effort and also reference to commercial forestry and mining to competing interests in forest areas. So we'll get the response of Raymond and perhaps I could just ask our speakers to each name the one competing pressure on the forest that they think could most easily be removed. We know that it's going to take a change of political will altogether to get red functioning, to give forest conservation the much higher political profile, much weightier political clout that it needs. But what are the no-brainers out there in their countries of most expertise? Things that could be done which would have the biggest benefit to the forest and perhaps ultimately the prospects of red plus in their countries. So first with Raymond, please. Do I answer my question first or do I? Okay. Who owns the carbon? That's a good question. The problem is in Congo we have a land tenure system that is dictamus meaning that the state owns the land and the communities have custom rights to the land which is not very well recognized, it's formally recognized. This duality is making things very difficult. But we are trying to grapple with this situation by going into the forest code where on its article 22 I guess the state recognize community forest. If these community forests are institutionalized then we can say that the carbon in those forests belongs to the communities. Or the other thing we can do is build an architecture that will permit that an institution oversees the money that is flowing through this red process and then have a repetition key that can then help this money trickle down to the last user of the forest which is very difficult. And that's, I really thank some governments for the northern countries that are working with our communities to strengthen them. Norway for instance is doing a lot of good with the Ren Foundation, working with communities for the rights and their demand on this type of things. So we still are working on it, we don't have the answer right now but these are the avenues that we are pursuing now. Okay now you each have 20 seconds to do this and Brea you can be exempt if you wish to be. What is the single no brainer change that could be brought about which would have the most benefit to forests in your country of speciality? What other policy change would you pick? 20 seconds. Very hard question but I would probably decrease the, well at the moment for instance other developments are heavily subsidized in terms of the land is cheap. So in that sense you know make the land more expensive, I don't know how to say this but so the competition is decreased somewhat and or you start to think about maybe at the start at least to subsidize more environmentally friendly projects. How about we just scrap subsidies all together instead of adding new ones. You know I mean that's just. Paolo, thank you Dave. Yeah take out subsidies from you know agriculture rural credit and also have issues related to land tenure. It's a major problem too. So subsidies for other land uses, tenure problems. Yeah. Ramon is the one you'd like to add? I think for us it's mostly community organization and decentralization of power to the communities. Wholesale political change then. We probably have time for just one or two short punchy questions from the floor if anybody has one they'd like to ask otherwise we'll move on. It's someone there. Yes sir. Yes sir, yes please. All that we've heard this morning has focused on the rainforest zone. I come from the dry forests of Africa in Malawi. My question has to do with the fact that the productivity of agriculture in our land where most of the pressure of population in Africa is is about one ton to one point two tons per hectare for serious the main food. As long as that productivity remains so low a lot of land clearing will go on. The question now is if red focuses its investment on planting new trees. You are planting trees on the very land which is still needed in large expanses to feed the people. Which means you plant trees and the people go to the forest frontier to cut some more. Should red not be investing at the same time in increasing agriculture productivity to save the forest so that any trees you plant are not the displacing pressure. I'm going to cut you off there because we're so short of time but it's an excellent question. I'd just like to hear a yes or no answer from everybody up here. Should red be investing in agriculture quite apart from forest? We need a combination of agriculture and forest. I said that when I was talking. So yes. Yes. Okay, I go with the crowd. We're going to turn to our vote now. I hope that you've all got access to these voting machines which I'm going to discover with you. Okay, our first question then. Choose the option that best characterizes the organization that you're representing at Forest Day 5. Choice of 1 to 6 options. I'll give you sort of 5 or 7 seconds for each one. You're being counted down. Okay, fine. So plenty of NGOs in the house and academics too. We know who you are. What is currently the most important barrier to design and implementation of red plus policies and strategies? 1 to 5 options. Well, glad to see plenty of disagreement there. What is currently... Oh, no, there we go again. By sector. Okay, alright. By sector, okay. But anyway, lack of clear and international framework on red, fair enough. Here we go. Which of the following are the most important obstacles to implementing red plus demonstration activities in specific areas on the ground? It's a complicated question, I'm afraid. 1 to 5 options. Okay, conflicts over the use of rights to forest resources. I suppose 10 year then. And do we get our more nuanced... Okay, no, we move on. Which of the following are the most important... Sorry, you're ahead of me. Community knowledge of carbon issues and how it relates to... Okay, mixed picture, move on to the next question please. What is the most important area for capacity building to facilitate better implementation of red plus? 1 to 6 options. Okay, communities and laws. Technical stuff, not so prominent. Okay, you obviously assume the technical stuff's done. What's the most... Okay, that's the question again. Okay, yeah. So local people and legal frameworks. So resounding conclusions that those are the biggest concerns. Okay, what is the most important area where science can contribute to better implementation of red plus? 1 to 5. Economics of land use change. It's very dominant. Measurement of the impacts of activities on emissions and reductions. So we remember the original point of the exercise. Okay, economics of land use change to design better incentive schemes. Of course it must be that one. Okay, what is the most important action that could be taken by the international community to enable countries to address the challenges of red plus implementation? 1 to 5. And this is our last question. Finance, we need to know where the money's coming from, when it's coming, how much it'll be. And resoundingly, everybody seems to agree with that. Okay, I'm going to bring things to a close with terrific thanks to our keynote speaker Paolo and to our three very fine panelists and to all of you for being here.