With respect to Indicators 11.1, 11.2 and 13.1, the Carbon Fund Participants clarify the following:

1. ER Programs have to develop their Reference Level in accordance with the Criteria and Indicators of the Methodological Framework, specifically Indicators 11.1, 11.2 and 13.1.

2. In the event that necessary activity data and emission factors are not available for the end-date and start-date of the Reference Period, ER Programs may estimate activity data or emission factors by interpolation of estimates made before and/or after the required start and end-date of the Reference Period assuming a linear progression of forest gain or loss (e.g. forest areas or forest carbon densities in 2012 may be derived as the mid-point between estimates for 2010 and 2014). For estimates made after the end-date of the Reference Period, it shall be ensured that these estimates occur before the Term of the ERPA.

3. If interpolation is used the following requirements shall be met:

a. The effect of such an interpolation on the Reference Level shall be clearly documented;

b. It shall be also justified, using secondary data, that the interpolation period does not include any unusual and significant forest loss in terms of forest area or forest carbon emissions and therefore that such interpolation does not lead to an increase in the uncertainty of activity data or emission factors;

c. It shall be demonstrated that methods to estimate emissions outside the Reference Period are consistent with the methods used to estimate emissions within the Reference Period.  

Guidance on use of interpolation of data in relation to the Reference Period of an ER program (English)

• Methodological Framework (MF) is a critical component to guide REDD+ countries in designing their proposals for and implementation of ER Programs for the Carbon Fund (CF), to meet CF requirements, and assist review by the CF.
• The MF consists of 37 criteria and related indicators, associated with 5 major aspects of  ER Programs: level of ambition, carbon accounting, safeguards, sustainable program design and implementation, and ER Program transactions.
• ER Programs included in the CF portfolio are expected to demonstrate conformity with the Framework’s criteria.
• Meeting the MF is a necessary, but not the sole, requirement  for an ER Program to be selected into the CF portfolio (see ER Program Origination Brochure).

• Methodological Framework (MF) will be used by ER Program Entities in REDD Countries to inform the design and implementation of their ER Programs; by the Facility Management Team (FMT) and Technical Advisory Panel (TAP) to review ER Program’s eligibility and performance; and by Carbon Fund (CF) Participants to select ER Programs into the CF portfolio (as part of the selection criteria).
• REDD+ countries may apply the MF to additional REDD activities as a means of attracting funding from other (non-CF) sources for scaling up activities. Donors or other international initiatives may find the MF useful to inform decision-making on REDD+ programs.

• MF’s criteria and indicators (C&I) will be used both to assess the design of the ER Program as well as the implementation of the ER Program.
• Where C&I are specific to either the design or the implementation phase of the ER Program, their timing is noted.

• ER Programs in the Carbon Fund are expected to build on and inform readiness preparation -- including the national REDD+ strategy, reference level, monitoring and reporting systems, and environmental and social safeguards.

• ER Programs reflect a variety of interventions from the national REDD+ strategy in a coordinated manner.
• REDD Countries are required to undertake a Strategic Environmental and Social Assessment (SESA), and develop an Environmental and Social Management Framework (ESMF) for the national REDD+ strategy.
• The SESA process and its resulting ESMF provide the national framework from which the ER Program-specific Safeguards and Benefit Sharing Plans are developed and applied.

• A country must have its R-Package endorsed by the PC before the country (or authorized entity) can submit an ER Program Document (full proposal) for assessment by Carbon fund (CF) Participants (for more information, see the Guide to the FCPF Readiness Assessment Framework).
• The R-Package and the outcomes of its assessment will provide the FCPF Participants Committee (PC) and CF Participants with a snapshot of a country’s readiness progress. Importantly, the R-Package will provide the CF with information on the consistency of an ER Program with national REDD+ readiness preparations and with overarching safeguards requirements.

• Both. Under the Methodological Framework, an ER Program accepted into the Carbon Fund portfolio must comply with applicable World Bank operational policies and procedures, including safeguard policies . But it must also promote and support the safeguards included in the UNFCCC guidance on REDD+ (commonly referred to as the “Cancun safeguards”). (For more information see FMT Note CF-2013-3 World Bank Safeguard Policies and the UNFCCC REDD+ Safeguards (July 28, 2013)).
• In addition, the current draft criteria and indictors  (C&I) require the ER Program to provide information on how relevant safeguards are complied with or addressed and respected, as relevant. C&I also require an appropriate feedback and grievance redress mechanism (FGRM) for the Program to be in place.

• In processing an ER Program, World Bank staff will carry out “due diligence,” which  involves examining the ER Program in order to assess its general viability, identify key risks , and identify adequate mitigation measures to address such risks.
  • These include: sector/country specific, technical, institutional, financial, and environmental/social safeguard issues and risks.
  • Due diligence begins after the signature of the Letter of Intent between the Program Entity and the World Bank, and will following standard procedures for Bank supported Carbon Finance operations. 
• The Methodological Framework and World Bank due diligence for the ER Program work in tandem to ensure the viability of the ER Program. ER Programs must meet both to be eligible for selection into the Carbon Fund portfolio.

• At the time the Carbon Fund (CF) Participants select an Emission Reduction Program Idea Note (ER PIN) into the CF pipeline, funding up to US$650,000 may be allocated to further develop the idea into an full-fledged  ER Program. This funding is World Bank executed.
• As the Delivery Partner for the CF, the World Bank is available to provide technical assistance to the country or ER Program authorized entity to develop the ER PIN into an ER Program.
• FCPF Countries are eligible to receive grant funding of up to $8.8 million for their readiness preparations, which is also likely to go a long way to assist countries in meeting Methodological Framework requirements.
• Development of some decision support tools is being considered to facilitate decision making on several technical aspects and possible approaches (i.e., on reference revel, monitoring and reporting systems, and cost-assessment). Note these tools are not prescriptive and application is voluntary.

• Carbon Fund (CF) is largely set up to provide payments based on performance (i.e., after emission reductions and/or enhancements in forest carbon stocks have been verified). However, the potential for advance payments is under consideration to provide financing for critical up-front investments (e.g., early safeguards work, or design of monitoring and reporting systems).
• CF payments are likely to complement financing from other sources.  E.g., the government’s own resources, private sector investments and internationally funded programs (UN-REDD Programme, the World Bank, and other multilateral or bilateral initiatives).

• The Methodological Framework guides the design of ER Programs.
• The payment per tonne of CO2 for ERs, however, will be negotiated and agreed by the ER Program and the Carbon Fund Participants.

• ER Programs are expected to demonstrate conformity with the Framework’s criteria and indicators (C&I). C&I were designed to strike a balance between clear requirements and complex methodologies, flexibility and practicality, and therefore apply at a fairly general level.
• Program Entities may design programs and systems in line with a country-specific context or third-party systems, provided the ER Program meets (or goes beyond) the Methodological Framework’s specified requirements.

• The Framework may be refined over time, as pilots are implemented and new lessons are learned. However, while the Carbon Fund (CF) encourages ER Programs to consider meeting such refinements on a voluntary basis, it will not require ER Programs to meet new or revised criteria and indicators that are approved by the CF after an Emission Reductions Payment Agreement (ERPA) contract is signed.

• No, the Carbon Fund aims to be consistent with evolving UNFCCC decisions on REDD+. It does not intend to pre-empt international negotiations on REDD+, but seeks to provide ‘real life’ practical insights and knowledge generated from REDD+ countries piloting performance-based mechanisms for REDD+. This piloting should help inform ongoing negotiations.

• No, the Methodological Framework does not require adoption by the FCPF Participants Committee (PC). As per the FPCF Charter, Carbon Fund (CF) Participants make decisions on all core aspects related to the CF, including on the selection of ER Programs and on establishing the methodological framework and pricing approach.
• In accordance with the FCPF Charter, the PC adopted guiding principles on the key methodological framework in June 2012. These guiding principles are an integral part of the MF.