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Context: Climate finance such as REDD+ RBPs requires agile instruments like the Performance-based Payments (PBP) to channel funds to the ground faster and in a substantive manner with verifiable impacts while ensuring social inclusion. Ultimately, leading to the achievement of the desired significant impact and contribution to NDC implementation. UNDP's PBP instrument has been proven as a reliable instrument that can be adapted to support governments' different circumstances and priorities when implementing their climate policies which are aligned to their NDC objectives.
Context: Climate finance such as REDD+ RBPs requires agile instruments like the Performance-based Payments (PBP) to channel funds to the ground faster and in a substantive manner with verifiable impacts while ensuring social inclusion. Ultimately, leading to the achievement of the desired significant impact and contribution to NDC implementation. UNDP's PBP instrument has been proven as a reliable instrument that can be adapted to support governments' different circumstances and priorities when implementing their climate policies which are aligned to their NDC objectives.
Session 3: Use of Performance-based Payment (PBP) Instrument to Implement REDD+ RBP Projects
Session 3: Use of Performance-based Payment (PBP) Instrument to Implement REDD+ RBP Projects
This session introduces Costa Rica, Ecuador and Indonesia's experiences in designing and implementing the PBP. These countries are invited to share how and where the PBPs have been reinvested, as well as emerging outcomes or impacts from the reinvestment and key recommendations for other countries who may be interested to use the PBP instrument.
Overview of Performance-Based Payments Implementation in GCF REDD+ RBP Projects
Presenter: Marco Chiu
Position: Global Technical Advisor on Policies and Investments, UNDP
Link to the presentation
The PBP is a specific UNDP modality to disburse funds based on the verified achievement of predetermined results, which have been agreed by UNDP and the pre-identified partner. This approach promotes the country's leadership by providing more flexibility on the way desired results are achieved. It means that the partner, such as the Indonesian Environment Fund, is able to use its own approaches, methods, capacities and resources within the agreed conditions of the GCF REDD+ RBP project. It also ensures cost efficiency by making optimal use of existing government structures, avoiding the duplication of structures and functions, while promoting progress towards more ambitious achievements on safeguards and gender. Furthermore, it enables faster disbursements from UNDP to the country , which depends on the government's partner capacity to deliver the agreed results, verified through an Independent Assessor, without compromising the quality of implementation, including safeguards and the intended use of proceeds.
Indonesia's Experience in PBP Implementation
Presenter: Endah Tri Kurniawaty
Position: Director of Fundraising and Fund Development, Indonesian Environment Fund
Link to the presentation
The South-South Exchange on PBP in Indonesia exemplifies a forward-thinking approach to conservation financing, demonstrating how targeted investments can yield tangible benefits for both the environment and local communities. The reported outcomes thus far—including a 98% compliance rate in budget utilization by local governments—underscore the effectiveness of performance-based funding. As Indonesia advances its PBP initiatives, the lessons learned and strategies developed during this exchange will play a pivotal role in shaping a sustainable future, not just for Indonesia, but as a model for global conservation efforts. The collaborative spirit fostered during this event is a testament to the potential of shared knowledge and resources in tackling the pressing environmental challenges of our time.
Indonesia is using UNDP´s PBP instrument to increase the area under Social Forestry Agreements, increase the area under rehabilitation and recovery activities in conservation areas, mangroves / coastal forest, and peatland ecosystems, as well as to increase the capacity of local government agencies to work on forest fire management and control. Indonesia highlighted the following key 3 lessons: (i) UNDP´s PBP enabled a fast delivery of REDD+ finance - over US $ 90 million have been delivered in 3 years of execution; (ii) while defining Key Performance Indicators (KPIs) and Social and Environmental Safeguards (SES) Indicators was straight forward, verifying SES indicators was not simple - SES indicators required a new set of means of verification, while assistance was needed to strengthen and streamline safeguards implementation; and (iii) the independent assessment process requires time - this is highly dependent on how complex the activities supported by PBP are, as well as the logistics for field data collection.
3 key recommendations emerging from Indonesia´s experience are the following. (i) Tie the definition of PBP indicators to Government existing indicators and work plans, as this approach helps to ensure that results are achieved and payments are reinvested in the same programs. (ii) Clarify up-front the difference between the purpose, use, rules, and procedures of the PBP instrument, compared to REDD+ RBPs, as this is usually a source of confusion given that the PBP was perceived initially as an additional requirement to access resources. (iii) Ensure the Independent Assessment team includes local experts; this helps international experts to quickly absorb the local particularities, and also to conduct a smooth field data collection, fully aware of the local dynamics.
Costa Rica's Experience in PBP Implementation
Presenters: Maureen Ballesteros / Oscar Mora / Jorge Cole
Position: REDD+ RBPs Project Manager / Fire Management National Programme Coordinator, Ministry of Environment and Energy / REDD+ RBPs Project Monitoring and Evaluation Specialist.
Link to the presentation
Costa Rica’s innovative approach to integrating Performance-Based Payments into its environmental conservation framework underscores the potential for financial mechanisms to drive sustainable practices. By promoting social equity and engaging indigenous communities, the PBP not only addresses environmental challenges but also enhances the livelihoods of local populations. As other nations look to replicate Costa Rica’s success, the insights gained from this program can guide the development of effective, inclusive, and sustainable conservation strategies worldwide.
Costa Rica is using the PBP instrument to co-finance its National Payment for Ecosystem Services (PES) Programme, to expand its coverage to Indigenous Peoples territories, and to increase the capacity of the government to work on forest fire management and control. Costa Rica highlighted the following lessons on the implementation of the PBP instrument: (i) The PBP requires political and technical negotiations to be well anchored. It is an instrument of which there is little experience. It involves many agreements and consensus. (ii) It is a living process - the verification methodology can be reviewed and adjusted annually. (iii) The Independent Assessor can offer improvement plans for increase efficiency of the supported programs. (iv) The PBP is an objective and technically rigorous instrument that allows making transfers of high economic value with a very well documented results audit, ensuring measurable results on an annual basis. (v) The PBP allows evidencing the approach to safeguards and social and environmental standards.
The last point is remarkable in Costa Rica, as it introduced bonus payments for those PES contracts that were located in municipalities with low development index or were targeting single-mother households, to mention few examples. Expanding the coverage of Costa Rica´s PES National Programme to Indigenous Peoples' territories is also an achievement with no precedent.
Success story of Costra Rica's experience in allocating the Forestry and Territorial Environmental Plan (PAFT) and payment to the indigenous territory of Cabagra:
Ecuador's experience in PBP implementation
Presenter: Karina Salinas Heredia / Cristhian Salcedo García
Position: Climate Change Unit Coordinator, Under Secretary of Climate Change / REDD+ RBPs Project Coordinator (a.i.) of Policy and Institutional Strengthening
The PBP instrument in Ecuador has proven to be an effective mechanism to provide incentives to local governments to engage and increase performance in actions related to conservation, restoration, and effective management of municipal protected areas. The total expected investments in incentives shows significant accomplishments such as a reduction in deforestation and increase of the area under restoration practices. To build on this success, ongoing capacity-building efforts for local governments are recommended, alongside strategies to ensure stable governance and explore additional funding sources. These actions will help sustain and expand conservation initiatives beyond the current framework, contributing to the long-term ecological stability of Ecuador's forests and protected areas administered by local governments.
The experience of implementing PBP in Ecuador illustrates the immense potential of this approach, as a viable mechanism for environmental conservation under the administrative mandate of local governments. The successes achieved this far are a testament to the collaborative efforts between local governments, communities, and stakeholders. As Ecuador continues to share its journey and results, there is a strong commitment to collaborating with other regions and countries, aiming to replicate this success while respecting the unique challenges they face. By leveraging existing opportunities for results-based payments and fostering greater participation in conservation initiatives, Ecuador is positioned to pave the way for sustainable environmental stewardship. Through ongoing engagement and adaptive methodologies, the PBP can ensure the long-term sustainability and effectiveness of conservation efforts, ultimately contributing to a healthier planet for future generations.
Although the use of the PBP instrument in Ecuador was conceived as a pilot, the country is ready to reinvest these resources into conservation actions that align with broader goals at a greater scale. Piloting this instrument at a relatively small scale has served to draw lessons and confirm its scalability.
Video presentation 1
Video Presentation 2
Break Out Group Discussions
Group 1: Optimizing PBP to advance social inclusion and gender in the FOLU sector
In terms of gender inclusion and labour rights, in Costa Rica, a 2021-2022 initiative required 20% of environmental services (ES) beneficiaries to be women, with a strict condition of no payment if this target was not met. This inclusion requirement was part of a broader "Inclusive and Green Campaign," which ensured women's labour rights were protected. The campaign also emphasized women's participation in indigenous territories and forest fire management efforts, aiming for gender balance in environmental programs.
Multiple countries, including Ecuador and DRC, highlighted efforts to localize incentives and include women in environmental initiatives as part of promoting collaboration and empowerment. Costa Rica shared how gender mainstreaming and indigenous engagement were crucial in REDD+ projects, with collaboration across government sectors essential for success.
Despite achieving a net-zero deforestation rate, Costa Rica epitomizes the challenges in continuing to access climate change funds due to its low deforestation levels. However, its long-term success in gender equity and emission reduction efforts stems from effective alliances and coordination among various government sectors.
Group 2: Optimizing PBP for further emissions reduction in the FOLU sector
The discussion focused on optimizing PBP to further reduce emissions in the FOLU sector. Key areas of discussion included enhancing emission reduction efficiency by developing standardized metrics to assess and reward greenhouse gas reductions, fostering stakeholder engagement by aligning financial incentives with performance outcomes, and facilitating knowledge sharing through platforms for exchanging best practices. Additionally, the optimization of PBP was seen as contributing to broader sustainable development and biodiversity conservation goals, while strengthening cross-country partnerships to improve access to climate finance and technical support.
In terms of specific experiences implementing the PBP, Indonesia discussed its work in mangrove restoration, addressing social safeguards with community involvement, and managing land tenure conflicts, such as palm oil plantations in conservation areas. Challenges include generating proper documentation for safeguards. Brazil highlighted its success in reducing deforestation through other RBPs and emphasized the integration of gender considerations. Costa Rica focused on forest fire management and community benefits from PBP, ensuring that funds are used for infrastructure and local monitoring. Cambodia, newer to PBP, plans to concentrate on community development and infrastructure projects.
One of the major challenges in PBP implementation, as noted by Indonesia, is the difficulty in implementing safeguards and generating the necessary documentation at the community level. Cambodia raised concerns about the responsibility for pre-investment costs in PBP. In response, Indonesia shared that it received pre-investment funding from the World Bank, and East Kalimantan explained that their provincial budget is initially used for pre-investment before external funding is provided.
Session 4: East Kalimantan's Experience with Implementing Climate Finance
Session 4: East Kalimantan's Experience with Implementing Climate Finance
This session highlights East Kalimantan's efforts to access and implement climate finance.
Implementation of Green Development Policy and Climate Change Mitigation in East Kalimantan
Presenter: Ujang Rachmad
Position: Assistant of Economic and Development Administration, Head of Sub National - Project Management Unit (SN-PMU) FCPF-CF
Link to the presentation
In 2017, East Kalimantan joined the Forest Carbon Partnership Facility - Carbon Fund (FCPF-CF) committing to achieve a target of 22 Mt CO2eq in emission reductions with an anticipated USD 110 million in RBP. Thus far, East Kalimantan's commitment to green development has led to an impressive increase on economic growth from to 6.22% in 2023, with a decrease on poverty level to 6.11%, from 7.05% in 2021, indicating effective government strategies to improve social welfare. A coverage of 65% areas of total land area have also been dedicated for forest and conservation areas. However, the province continues to rely heavily on mining sectors, particularly as fluctuations in global coal prices have historically led to economic instability, such as a 1.2% contraction in 2015. They also faced challenges in engaging and transitioning stakeholders from traditional practices to sustainable models of forest and land managements. In response, East Kalimantan will continue refining its strategies in response to emerging challenges in the global environmental landscape to maximize efforts in addressing climate change. The province will strengthen its environmental regulations and ensure compliance through effective monitoring systems, allocate resources towards renewable energy and agro-industrial initiatives and foster collaboration among government, the private sector, and local communities to position itself as a model for sustainable development in Indonesia. Continuous adaptation and strategic investments will be critical in achieving the province's ambitious climate and economic goals, ensuring a sustainable future for its residents and the environment.
Fiscal Policy Towards Green Transformation in East Kalimantan
Presenter: Wahyuni
Position: Provincial Secretary of East Kalimantan
Link to the presentation
Indonesia’s multifaceted approach to addressing climate change—characterized by significant funding allocations, innovative fiscal policies, and strategic initiatives, demonstrates a robust commitment to confronting the urgent challenges posed by climate change. Collaboration among government entities, the private sector, and local communities will be vital to achieving the country’s ambitious climate goals. Through coordinated efforts and innovative strategies, Indonesia seeks to transform vulnerabilities into opportunities, setting an example for other nations facing similar challenges. Indonesia's NDC targets a total financial commitment of USD 281.23 billion (approximately IDR 4,002 trillion) from 2018 to 2030 which will be invested in land conservation such as protecting and restoring forests critical for carbon sequestration, renewable energy development to lessen reliance on fossil fuels, wildfire prevention to mitigate the frequency and severity of wildfires and clean technology investments to promote innovations that reduce environmental impact. As a demonstration of its commitment, East Kalimantan has increased its budget allocation for climate change from 25.1% of its budget in 2024 to 47.1% in 2024.
Benefit Sharing Mechanism (BSM) and Benefit Sharing Plan (BSP): Implementation, Challenges, and Opportunities
Presenter: H. Iwan Darmawan
Position: Head of the BSM Group
Link to the presentation
The BSM is designed to specifically tackle two significant sources of GHG emissions: deforestation and forest degradation. The financial architecture of the BSM ensures equitable distribution of funds among various stakeholders involved in the program. A total funds of USD 13.58 million (IDR 194.68 billion) for RBPs is disbursed to MoEF and MoEF Technical Units, District/City Government, Provincial Government Agencies, Village Government (441 villages). Additionally, 10% of the total emissions reduction funds—approximately USD 2.09 million (IDR 31.35 billion)—is reserved as rewards for communities and groups excelling in sustainable forest management, impacting around 150 villages and community groups. However, East Kalimantan points to the challenges of a timing mismatch between regional planning and budget cycles and the timing of incentive allocations. There is also heavy dependence on intermediary institutions to distribute the incentives which require navigating bureaucratic requirements that lead to delay. Nonetheless, the BSM has the potential to enhance land governance and improve forest resource management policies. The initiative in East Kalimantan embodies the ethos of shared responsibility and collaborative efforts in addressing the urgent issues posed by climate change. The outcomes achieved in East Kalimantan are expected to resonate globally, showcasing a practical framework for sustainable development and environmental management. Through ongoing commitment and innovation, the BSM/BSP stands as a beacon of hope in the fight against climate change, with its impacts reaching "from East Kalimantan to the world".
Forest Carbon Facility & Partnership (FCPF) in Sub-District Batu Ampar
Presenter: Badiri
Position: Head of Taskforce Proklim Berhijra, Batu Ampar
Link to the presentation
The findings illustrate that Sub-District Batu Ampar, Balikpapan, East Kalimantan, is making significant strides in integrating environmental management into community life. Its proximity to coastal areas and forested regions is vital for biodiversity and climate mitigation efforts and allows for a broader engagement in community initiatives. The effective use of government and private sector resources has resulted in a comprehensive approach to address local challenges related to climate change. The community's engagement with youth through educational initiatives enhances awareness and promotes active participation in sustainability efforts. To ensure long-term success in these initiatives, Batu Ampar will continue to enhance community engagement, develop sustainable funding mechanisms, strengthen monitoring and evaluation and promote partnerships.
Self-management of environmental management in the district has shown significant progress through various government programs and partnerships. Programs such as environmental socialization and education, Clean, Green and Healthy (CGH), food security enhancement, and the PKK Heart program have successfully raised public awareness of the importance of environmental conservation. In addition, cooperation with the education sector and state-owned enterprises has given birth to various sustainable initiatives, such as waste banks, composting, and greening. These efforts not only contribute to environmental preservation but also improve people's quality of life.
The Forest Carbon Facilities Partnership (FCPF-CF) has provided a significant boost to Kelurahan Batu Ampar's sustainability efforts. With a generous grant of Rp 420.108.167, the community has been able to implement various environmental initiatives. These include waste management programs, such as composting and recycling, as well as infrastructure improvements like the construction of waste collection points and water conservation facilities. By investing in these projects, Batu Ampar is not only reducing its carbon footprint but also enhancing the overall quality of life for its residents.
Optimization of Greenhouse Gas Emission Reduction Program in Forestry and Other Land Use Sector of East Kalimantan Province
Presenter: Daddy Ruhiyat
Position: Daily Chair of the Regional Council for Climate Change of East Kalimantan Province
Link to the presentation
East Kalimantan, Indonesia has received Results-Based Payment (RBP) from the Green Climate Fund for the Results Period 2014-2016 under the REDD+ program. The allocated funds amount to USD 4,691,093 and are intended for sustainable forest management, successful forest rehabilitation, community empowerment, and poverty alleviation efforts to improve forest governance and reduce deforestation and forest degradation. It is expected that the RPB will result in reduced deforestation and forest degradation, increased biodiversity and carbon stocks, enhanced economic and entrepreneurial opportunities, improved implementation of REDD+, and better implementation of the Nationally Determined Contribution (NDC). The scope and indicative activities include strengthening the Forest Management Unit (KPH), forest and land rehabilitation, climate village programs, REDD+ architecture, conservation and biodiversity, forest and land fire control, and sustainable forest management.
The FOLU sector in East Kalimantan is targeted to reduce an annual emission reduction of 32.03%, or about of 15.3 million tCO2e between January 2025 and December 2027. Strong supports are needed from multisector stakeholders, including local communities. Therefore, increased village capacity is needed in addressing climate change, including to mitigate conflicts, especially those involving the Adat community.
The program aims to achieve several objectives including to recognize and empower 37 Adat Law Communities, enhance the capacity of 100 Climate Villages, reduce deforestation by 60% from the baseline, rehabilitate 45 hectares of land, and improve and increased the economy of 10 women groups.
The provincial programs link to the National Program and focus on three aspects:
Increased access, sustainable use, and benefit sharing of ecosystem services
Recognition and empowerment for Adat communities is an important aspect. One of the activities include strengthening capacity of 200 villages with medium-high vulnerability to become Climate Villages. Mainstreaming gender balance will be done by increasing women's capacity and participation as social safeguards to increase biodiversity. To protect biodiversity and improving biodiversity index, the provincial government plans to form environmental safeguards and strengthen species protection.
In reducing deforestation and increasing carbon stocks, increasing village capacity will be achieved by establishing protection of important ecosystem areas by the community through reaching out to villages located in medium-high vulnerability areas. Another aspect is to form Green Generation by reaching out to youth to increasing Community Knowledge about Climate Change and Benefits Other Than Carbon. Another key aspect to increase Carbon Stocks is to reduce forest and wetland fires.
Improvement of REDD+ and NDC implementation will be achieved by Strengthening provincial and district to increase Sub-national contributions in NDC and FOLU Net Sink.
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