Processes [MGD Sections]

MRV Institutions [MGD Sections]

Methods + Tools [MGD Sections]

Appendix A   Financial considerations Previous topic Parent topic Child topic Next topic

NFMS and associated measurement, reporting and verification processes have technical and administrative costs for their establishment and operation. These costs are affected by national circumstances. They vary over time and should be considered during the design decision stage.
There are potential cost efficiencies are to be gained by considering the framework established for forest monitoring for results-based-payments as an opportunity to establish an NFMS that meets a broader range of monitoring and reporting requirements. Costs incurred for remote sensing analyses or field sampling should be considered as not only an investment for REDD+, but also as a normal process of gathering relevant multifunctional national level data.
Establishment costs are once-off costs. They will depend on the methodological approach adopted and the amount of infrastructure and data already available. Operational costs are on-going or recurring costs to generate repeated REDD+ emission and removal estimates. Operational costs need to be considered during initial system design, and can be often be reduced by joint use of remote sensing and ground observations. A long-term view of costs and benefits will help avoid design decisions which are cheaper in the short-term, but which are more costly or unsustainable in the long-term.
Establishment costs
It is not easy to generalize about establishment costs, but the World Bank FCPF has estimated costs of readiness preparation activities provide an indication for the establishment of a FREL and maintenance of MRV processes. These are total budget estimates for the 10 year period, not annualized costs. The average is just over USD 4.5M (Table 20).
Costs associated with the more technical aspects of establishment can include:
  • Facility rooms or laboratories within which technical work is conducted (this may use existing space) - estimated up to USD 1M
  • Remote Sensing and Geographic Information System hardware and software (e.g. ~5-15 workstations depending on the geographic area, Idrisi/ENVI/ESRI type remote sensing software, ArcGIS Enterprise System) - estimated up to USD 200K. Open source freely available RS/GIS software options are also available
  • Ground-based measurement equipment including vehicles, GPS, data recorders - estimated costs can exceed USD 500K.

Table 20: Estimated costs of FCPF readiness preparation activities

Readiness component
Indicative readiness preparation budget for a 10 year period (USD)
Reference Level
Notes: Figures represent average, minimum and maximum budgets across 8 countries for reference level figures and 10 countries for MRV figures. Countries from Africa, Asia and the Americas included in all estimates.
Operational costs
Acquisition of remote sensing data can represent an establishment as well as an operational cost. Through the CEOS SDCG much useful satellite data are now available at little to no cost to the user and countries are making use of the data, mainly Landsat in developing their FREL or FRL. If necessary data can be commissioned or purchased from commercial providers for specific purposes. Costs vary widely depending on e.g. source, resolution or any available discounts for volume purchases. A country might anticipate an initial high volume data requirement during its start-up phase as it establishes a forest reference emission level and determines which data combination best suits its requirements. Because of UNFCCC biennial reporting requirements are countries are developing monitoring systems designed for at least bi-annual updates of the activity data (often based on Landsat or other freely available data) plus NFI data collection every 5 - 10 years.
Collection of ground data may be required in both the establishment and ongoing operation. Depending upon reported REDD+ activities, carbon pools included and the level of existing information, a considerable number of new field observations may be needed. If a country has an established NFI the need for additional investment will depend on the capacity of the NFI to meet the additional needs of REDD+ MRV.
Recurring costs are largely those that any operational program would encounter. In general there will be need for:
  • Clerical/administrative staff
  • Field-based staff for ground-based data collection
  • GIS/RS specialists (includes integration of remote sensing with ground observations)
  • Facility costs including rent, utilities, maintenance, and insurance
  • Expert consulting and implementation costs related to any identified NFMS improvements
Staff or contractors will not necessarily need to focus on REDD+ continuously. The periodic nature of assembling information into reports may tempt countries to contract much of its routine work to technical companies/organisations rather than maintain dedicated staff, although in this case it will be important to maintain sufficient expertise within the NFMS to interact effectively with the contracted organizations, and ensure value-for-money.