REPORT OF THE HIGH-LEVEL NATIONAL DIALOGUE ON WATER TOWERS, FORESTS AND GREEN ECONOMY 5-7 NOVEMBER 2012 Introduction

The First Kenya Water Towers, Forests and Green Economy National Dialogue was held from 5-7 November 2012, in , Kenya. The dialogue was organized jointly by the UN Environment Programme (UNEP) and the Kenya’s Ministry of and Wildlife. It was held as part of Kenya’s follow-up to the outcome of the UN Conference on Sustainable Development (Rio+20 Conference) “The Future We Want” and also as part of the Government of Kenya’s efforts to implement its Vision 2030 (2008-2030), which has the objective of helping to transform Kenya into a “middle-income country providing a high quality life to all its citizens by the year 2030.” The three days brought together more than 200 key decision-makers from Kenya, including from 12 ministries and government agencies, the private sector, development partners, civil society and media, as well as international observers.

The purpose of the dialogue was to raise awareness of the socio-economic role of water towers and forests in the Kenyan economy and identify the enabling conditions for delivering long-term investments in sustainable forest management. The dialogue also aimed to consider how to capture finance and investment opportunities relating to Vision 2030 and the green economy.

This report summarizes the presentations made, and discussions undertaken, during the three days of the dialogue.

1 Report of the Meeting The Kenya Water Towers, Forest and Green Economy National Dialogue included opening and closing high-level segments, technical sessions, and a press conference on water towers and the role and contribution of mountain forests to the Kenyan economy. This report summarizes, in the following order, the high level opening ceremony, plenary technical sessions, and the closing ceremony.

OPENING OF DIALOGUE

On Monday, 5 November, Nasser Ega-Musa, Director, UN Information Centre, opened the dialogue by welcoming participants and dignitaries to the event.

David Stower, Permanent Secretary, Ministry of Water and Irrigation, speaking on behalf of the Minister, underscored that Kenya’s current constitution has placed enormous responsibility on the government on matters of the environment, noting that water is recognized as a socio-economic right of the people. He reported that the Water Bill of 2012 undertakes to mainstream water-related issues with relevant articles of the constitution, and that water availability is a key enabler to achieving Kenya’s Vision 2030.

Achim Steiner, Executive Director, UNEP, emphasized that Kenya’s five water towers are the backbone of the country’s economy, providing 75% of its renewable water resources. He lauded the government’s commitment to saving the Mau Forest ecosystem where over 21,000 hectares of land have so far been repossessed for rehabilitation. He reiterated the commitment made by UNEP during its 40th anniversary to support the government in creating awareness of the value of forests, highlighting recent estimates that show that the country stands to gain 4.24 times more from sustainable management of forests compared to cutting them down.

Lodewijk Briet, Ambassador of the European Union to Kenya, said enabling conditions for sustainable development include improved land tenure and increased sharing of benefits from the environment with local communities. He noted that the Tana Delta,

2 where communities have been fighting to defend water and land for centuries, was a classic example of the importance of the water towers to communities. Briet called on the dialogue to address the role of public-private partnerships (PPPs) in enhancing investments in forests and responsible governance, including payments for ecosystem services (PES). He reported that the EU has developed 97 community-based projects in the water towers, which aim to restore vital water services, and improve and protect the livelihoods of local communities.

Lawrence Mwadime, Acting Permanent Secretary, Ministry of Forestry and Wildlife, said the dialogue would provide an opportunity for forests to play an active role in achieving Vision 2030 and in transitioning to a green economy.

Hon. Dr. Noah Wekesa, Minister of Forestry and Wildlife, noted that despite the importance of forests in economic development and rural livelihoods, Kenya is a low– forest-cover country. He called for enhanced conservation of existing indigenous forests and ambitious farm and dryland forestry programmes to ensure increased tree cover to the 10% recommended in Vision 2030. He reported that his ministry would continue to provide enabling conditions for private sector investment in forestry. The Minister lamented that politicians had neglected debates on the environment and said that if he had the power to influence Kenyan voters, he would “plead with them to vote for candidates who will address and recognize the importance of the environment and issues related to mitigation and adaptation to climate change.” The Minister declared the dialogue officially opened and received from Achim Steiner, the Kenya Forest Service (KFS) - UNEP report on “The Role and Contribution of Mountain Forests and Related Ecosystem Services to the Kenyan Economy.”

TECHNICAL SESSIONS

THE ROLE OF WATER TOWERS AND FOREST ECOSYSTEMS IN THE KENYAN ECONOMY:

On Monday morning, Gideon Gathaara, Ministry of Forestry and Wildlife, chaired this session. Pushpam Kumar, UNEP, discussing ecosystems for a green economy, said the growth of domestic consumption and demand of products in Kenya should be addressed

3 during the transition to a green economy. He highlighted the need to: recognize the role of ecosystem services in a green economy and create public awareness; restore degraded ecosystems by means of incentives, regulations and markets for ecosystem goods and services; and reflect the true value of ecosystems in the green economy model. Kumar added that even though PES has the potential to compensate ecosystem custodians for provision of goods and services, it is not the panacea for all problems. In ensuing discussions, participants addressed: how to convince local communities to consider the trade-off between resource exploitation and the long-term benefits from conservation; how to incorporate The Economics of Ecosystems and Biodiversity (TEEB) into policy; and the need to elaborate reducing emissions from and forest degradation in developing countries, as well as conservation, sustainable management of forests and enhancement of carbon stocks (REDD+) as an incentive-based programme.

Charles Mutai, Ministry for the Environment and Mineral Resources, discussed Kenya’s progress towards creating enabling conditions for its transition to a green economy. He highlighted the Green Economy Scoping Study supported by UNEP to assess opportunities and challenges for the transition, as well as the activities of an Inter- Ministerial Committee on green economy, which provides technical support and policy interface. Mutai highlighted policies and laws that support the transition, including: Articles 42, 60(c) and 69(a-h) of the constitution of Kenya, which recognize the rights to a clean and healthy environment, sustainable and productive management of land resources, and sustainable use and protection of genetic and biological diversity, respectively; Kenya’s Vision 2030; the Agriculture (Farm Forestry) Rules 2009; Forest Policy of 2005; the National REDD+ strategy; the Greening Kenya Initiative; and the Water Act of 2002. During discussions, participants noted the need for a roadmap and a legal framework for the green economy, as well as the need to harmonize the roles and mandates of various ministries.

Karanja Njoroge, Centre for Environmental Action, chaired the session in the afternoon. Samuel Muriithi, KFS, presenting on the role of mountain forests and ecosystems in the Kenyan economy, noted that the contribution of forests is underreported in national statistics. He reported on the Forest Resource Account (FRA) of 2000-2010, noting that it captures the full value of the forestry sector as 3.5% of the country’s Gross Domestic

4 Product (GDP). He highlighted that the key findings of the report show that deforestation within this period led to a reduction of water availability by close to 62 million cubic meters, which in turn led to declines in fish catch and irrigation and hydro-electric power potential, a rise in the cost of water treatment, and increased incidences of malaria. Participants discussed: the need to ensure mainstreaming of PES in forest ecosystems while ensuring that it does not lead to inflation of water and hydroelectric power bills; the effects of drought on ecosystems; and the role of REDD+ as an incentive to maintain .

Edmund Barrow, IUCN, discussed forest restoration, highlighting the successes of PES in Beijing and New York in paying for water catchment management. He reported that Kenya loses 3.87 billion KES a year from lack of investment in water catchment management and highlighted that the pre-requisites for successful restoration include: enabling policies; supportive agencies; benefit sharing with communities; and “ring fencing” of national financial resources. He urged Kenya to take on the 2011 Bonn Challenge and deliver on the global commitment to restore 150 million hectares of lost forests and degraded lands by 2020. In ensuing discussions, participants debated: the need for continued policy reforms to ensure the success of PES and REDD+; the cost of restoration of ecosystems; and how to ensure recovery of ecosystem services in biodiversity rich ecosystems.

George Krhoda, Water Resources Authority, discussed the link between water and forest resources, and the national economy. Giving the example of the Mau Forest, he emphasized that providing scientific evidence of the link between water and forests has been difficult because there is often a lag period between deforestation and the disruption of hydrological regimes. He called for more investment in scientific research in order to ensure optimization of the functions of trees, forests and forest ecosystems for sustainable development. Participants also discussed: recent reports reporting abundance of ground water; challenges of managing transboundary water resources; the role of geothermal power in reducing strain on surface water; and future scenarios of water management under county government.

5 Alfred Gichu, Ministry of Forestry and Wildlife, presenting on Kenya’s REDD+ and Readiness Activities, reported that greenhouse gas emissions due to deforestation have risen from 16.3 million tonnes of carbon dioxide equivalents (MtCO2e) in 2000 to

19.6MtCO2e in 2010. He underscored that the national REDD+ programme is aimed at: reducing anthropogenic pressure on forests; promoting energy efficiency; improving governance in the forest sector; and enhancing carbon stocks through afforestation and reforestation. On readiness activities, he discussed the development of a national strategy and legal framework for the implementation of REDD+. Participants, remarking on the variety of figures on rates of forest degradation, called for accurate reporting, more research on tree varieties that are suitable for carbon sequestration, and resolution of land tenure issues for effective REDD+ implementation.

DELIVERING ENABLING CONDITIONS FOR INVESTMENTS IN FOREST ECOSYSTEMS

On Tuesday morning, 6 November, participants met to tackle questions regarding the lack of adequate governance, implementation of policies, and harmonization of institutional arrangements. The session was chaired by Emilio Mugo, KFS.

Philip Olum, Kenya Water Resource Management Authority (WRMA), presented the National Water Master Plan (NWMP) 2030 and outlined enabling conditions for its successful implementation. He reported that national freshwater reserves in 2010 were estimated at 1172 cubic meters per capita up from 647 cubic meters in the NWMP of 1992. He stressed that although the management of water resources was the responsibility of state governments, water supply and sanitation are the responsibility of county governments. He noted that the main constraints to efficient water provision include illegal water abstraction, encroachment of wetlands, inefficient water use and lack of responsible public use. Olum further noted that the WRMA has developed strategies to decentralize water management including through water resource user associations. He concluded that implementation is a major consideration of the current NWMP. In ensuing discussions, participants discussed the need for: participatory mapping of the water catchment with the local community; more funding for water resource user associations;

6 more relevant training modules at water training institutes; and clarity on the role of county governments in water management.

Karanja Njoroge, Centre for Environmental Action, presented the Friends of Karura Forest as an example of a successful community participatory initiative to restore and maintain forest ecosystems. He highlighted efficient collection of visitor entrance fees and benefit sharing with communities neighboring the forest through allowing access for recreation, water and other non-timber forest goods and services. Njoroge reported on progress towards a legal agreement with KFS for improved management of the forest. Participants noted the need to ensure equitable benefit sharing by all communities dependent on the Karura Forest in order to make them custodians for its protection.

Hassan Noor, Mau Secretariat, presented on progress made in securing and restoring the Mau Forest Complex since 2009, after several decades of degradation due to massive excisions and encroachment. He highlighted the efforts by the Prime Minister’s office and the Ministry of Environment and Mineral Resources to recover unoccupied and occupied parcels of the forest including those with legitimate title deeds. Noor showed various collaborative efforts to resettle indigenous populations of the Ogiek community through provision of alternative livelihood options such as use of bamboo for baskets, fencing, fuel and furniture. Participants discussed the need to: keep the Ogiek actively involved in forest management; replant indigenous trees in the forest; ensure tree planting programmes in settlement areas outside the forest; renew and sustain political good will; and harmonize involvement of institutions with mandates in the management of the Mau Forest.

REMOVING OF BARRIERS TO INVESTMENTS IN KENYA’S FORESTED ECOSYSTEMS

This session was held on Tuesday morning and afternoon, and was chaired by Emilio Mugo, KFS.

Godwin Kowero, Africa Forest Forum, discussing various options for financing forestry in Africa, emphasized that it is the primary responsibility of countries to commit domestic public finances for forest administration, research, education, extension services

7 and forest law enforcement and governance, before seeking innovative financing mechanisms such as PES and REDD+. He emphasized the role of the private sector, noting the need for access to micro-financing, loans and regional markets of processed forest goods. Kowero said country-level funding includes Official Development Assistance, bilateral grants, and concessional loans and multilateral financing from the World Bank, the Global Environment Facility (GEF), the International Tropical Timber Organization (ITTO) and the African Development Bank.

On climate finance, including from under the UN Framework Convention on Climate Change (UNFCCC), Kowero reported incidences where just a few countries received over 90% of the available funding and further noted that funding was also biased towards climate change mitigation, with less funding available for carbon sequestration and forest financing. Participants questioned the conditions required for grants and loans, noted the need for adding value to forest goods to increase the benefits from them, and called for the development of realistic incentives to enable PPP.

Mwangi Githiru, Wildlife Works, presented the successes of the Kisigau Corridor REDD+ Project in transferring carbon credits to communities. He underscored that the process requires measuring the amount of carbon in trees and soil, projecting how much carbon can be protected, third party validation and project registration, and annual monitoring and reporting. Githiru noted that the lack of a national REDD+ strategy accounting framework and insecure land tenure are key barriers to up-scaling REDD+ in the country. In the following discussion, participants commented on: the slow rate of REDD+ uptake; how to address barriers to REDD+; and finding alternative fuel sources to reduce pressure on forests.

Iain Henderson, UNEP, discussing opportunities for PPPs in forestry, highlighted that the “little forest finance book” launched during the eleventh Conference of the Parties to the Convention on Biological Diversity in Hyderabad, India, contains information on finance options and risk reduction for forest financing and investments, including in non-timber forest products, forest carbon and ecosystem services. He underscored that private sector investors require removal of investment barriers, increased returns and reduced risks.

8 Participants stressed the need for a one-stop-shop for information on REDD+ opportunities for investors and estimates on possible returns from such investments.

Mohamed Awer, WWF, presented a case study of Lake PES for watershed management. He explained that the process began with a feasibility assessment of hydrology, followed by a pilot-scale implementation of PES by farm owners through a market-based voluntary scheme consisting of ecosystem sellers or stewards on one side and ecosystem buyers or beneficiaries on the other. Awer reported that payments were made through cash transfer vouchers redeemable for farm inputs. He showed how after one year, farmers benefited from soil management, increased ground cover, sustainable livestock practices, and use of higher yield crop varieties. In ensuing discussions, participants discussed incentives to mobilize voluntary and sustained involvement in PES and up-scaling of PES.

Christian Lambrecht, Rhino Ark Charitable Trust, discussed his organization’s contribution to conservation and management of water towers through PPPs. He reported on completion of a 400 kilometer electric fence around Aberdares Forest, ongoing fencing of Mount Kenya, and plans for Mau Ebuuru through partnership with Kenya Wildlife Services and the KFS. He showed that the funding was predominantly from participants of the annual Rhino Charge, a cross-country event to raise funds for conservation of mountain forests. Lambrecht highlighted some benefits of PPP including shared responsibility, improved transparency and accountability in governance, and direct community participation.

Esther Muiruri, Equity Bank, presented on the role of the banking sector in forestry investment. She reported that market-based approaches presented in recent investment models for the environment have opened opportunities for banks. She highlighted her company’s support projects, including sustainable livelihoods projects for the Ogiek community and others in the Mau, and the development of energy saving cooking “jikos” (charcoal cooking stoves). Participants discussed: the possibility of banks’ involvement in carbon investments; provision of competitive grants; and collaboration with international banks with experience in investing in the environment.

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REVIEW AND DISCUSSIONS ON THE DRAFT OUTCOME STATEMENT On Wednesday morning, 7 November, participants discussed the outcome statement and made recommendations for improving the text. David Mbugua, KFS, chaired this session.

On the preamble, participants called for additional statements summarizing some key constraints to sustainable forest management.

On key factors for success, they suggested additional text emphasizing: the dependence of “human livelihoods” on sustainable ecosystem management; the need for sustained high-level political commitment and support, in order to achieve transformational change in ecosystem management; and the need for alternative livelihood sources and benefit sharing with communities in order to address the drivers of deforestation. They also suggested replacing “forest governance” with “ecosystem governance” in the entire statement.

They noted that the five-year roadmap should, inter alia: emphasize implementation of policies; coordinate and harmonize the activities of institutions; consider small-scale farmers in the REDD+ Strategy; and include long-term goals on institutionalization of PES without further burdening the private sector or causing increased utility bills.

CLOSING CEREMONY

The Master of Ceremony for the high-level closing session on Wednesday, 7 November, was Lawrence Mwadime, Acting Permanent Secretary, Ministry of Forestry and Wildlife. David Mbugua, KFS, presented highlights of the outcome statement with amendments agreed upon by participants.

Achim Steiner said the outcome statement provides a basis for the country’s implementation of policies for sustainable management of forests and water towers, adding that restoration of forests should not be seen as taking land from some, but as restoration of ecosystem services for all. He lauded the government for its bold action to save the Mau Forest, noting that it was projected that continued excision and degradation

10 would have led to the extinction of the ecosystem within 15 years. Steiner expressed the hope that Kenyans would pay attention to debates regarding the environment to inform their choice of the next government.

David Stower, speaking on behalf of the Minister of Water and Irrigation, highlighted some ongoing initiatives of his ministry, including the ongoing review of the water policy and development of a master plan for the five water towers. He reported that according to a recent study by the Japan International Cooperation Agency, which was commissioned to evaluate abundance of water resources, Kenya is no longer categorized as a water- scarce country due to discovery of earlier unknown ground water resources. Achim Steiner presented to the Permanent Secretary, a copy of the WRMA-UNEP report “Securing Water and Land in the Tana Basin: A Resource Book for Water Managers and Practitioners.”

Josephat Koli Nanok, Assistant Minister, Ministry of Forestry and Wildlife, called for consideration of the effects of mineral exploration and extraction on forest and water resources. He said that the high-level dialogue was an opportunity to accelerate progress in achieving Kenya’s Vision 2030 and the implementation of reforms and effective planning of the water towers.

Dalmas Otieno, Ministry of State for Public Service, speaking on behalf of the Prime Minister, welcomed the outcome statement and lauded the wide participation of the public and private sectors in the dialogue. He said PPPs are important for ensuring that forestry plays its part in supporting the transition to a green economy. He stressed that a “green” Kenya requires more than 10% tree cover and emphasized the need to ensure that communities set aside areas for tree planting. He underscored the role of the media in ensuring public awareness and accurate reporting on implementation of policies, and further called for definite timelines for activities proposed in the outcome statement.

Karanja Njoroge, Centre for Environmental Action, gave a vote of thanks to the government officials, directors of public and private institutions, and all participants for their dedication to the dialogue, and closed the meeting at 12:45pm.

DIALOGUE OUTCOME STATEMENT

11 In the outcome statement, dialogue participants noted that deforestation in Kenya’s water towers deprives the Kenyan economy of 6 billion Shillings annually and threatens the supply of more than 70% of the country’s water supply. They remarked on the growing public demand to save water towers and forests, calling for an ecosystem approach in managing land, water and living resources. Participants highlighted key factors of successful sustainable ecosystem management including: sustained high-level cross-party support; establishment of enabling conditions for private sector investments; and clear institutional arrangements to ensure efficient coordination between relevant government sectors, and with stakeholders.

Participants recognized the role of the private sector and local communities in ecosystem restoration and management, and called for stronger engagement with communities and the private sector and removal of barriers to long-term PPPs.

In a call for action, participants presented a roadmap for the next five years recommending:

1. that the government should strengthen implementation and enforcement of policies and measures that can be the basis of sustainable management of water towers and forests, including transparent monitoring and performance appraisals;

2. that key emerging policies and strategies such as the Water Master Plan and the REDD+ Strategy should have a clear focus on contributing to sustainable forest and ecosystem management, and contribute to sustainable livelihoods;

3. improved coordination and synergies of government departments in order to avoid overlapping mandates, and ensure streamlining and rationalizing of roles and responsibilities as well as the establishment of performance based monitoring;

4. the establishment of PES schemes to conserve and restore forests and inland waters;

5. the development of a multi-source investment portfolio to encourage PPPs which can support sustainable management and utilization of forests;

6. building on research to update data and manage knowledge on the critical role and economic importance of forest ecosystems for Kenya’s wellbeing; and

12 7. Promotion and increased investment in capacity building through participation, education, training of stakeholders and creation of public awareness on the critical role of forest ecosystems to economic and sectoral development needs.

Dialogue participants invited the Permanent Secretary for Forestry and Wildlife to bring the outcome statement to the attention of the Sector Chairs involved with future planning of Kenya’s Water Towers, Forests and Green Economy and to facilitate the continuation of the dialogue.

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