3.1 Stakeholder involvement
The REDD+ Taskforce, responsible for overall management of the REDD+ process and leading implementation of the national REDD+ strategy, was the main consultative body for this study. The Taskforce comprises representatives from seven ministries and the National Council for Sustainable Development. Stakeholder consultations were conducted intensively during the inception phase and the development of the land-use typology. These consultative processes obtained stakeholders’ input on the land-use sector classification and types of projects relevant to land-use expenditure. Their views supported the land-use definition. A workshop was organised to discuss and finalise the land-use typology. Draft results were then presented to key stakeholders and project partners for their input and validation at a final workshop. Partner consultations were limited by the impact of the COVID-19 crisis during the implementation of the study.
3.2 Typology development
Land-use finance in Cambodia refers to investments, mainly by the private sector and public sector (including ODA), in activities that directly and/or indirectly affect forest cover positively and/or negatively. Stakeholders discussed classifying land-use finance flows in green, grey and brown categories, eventually discarding the brown category. Reasons were that drivers of deforestation such as illegal deforestation and land encroachment/speculation are out of scope of the study as they are not projects with reported financing (loan, grants, and budget expenditures). In addition, despite various studies and the adoption of the NRS, there is still no clear national consensus on drivers of deforestation in Cambodia. It is a politically sensitive topic. A cautious approach was therefore taken for the definition of the land-use finance typology.
On that basis, Cambodian stakeholders agreed to classify land-use finance into two categories of financial flows:
- Green land-use finance refers to investments in activities that contribute directly or indirectly to protecting or growing forest cover, enhancing forest carbon stock, or reducing drivers of deforestation — and which are therefore potentially aligned with forest conservation and sustainable forest management, as expressed in the NRS objectives. It is important to note that ‘alignment with’ does not necessarily mean actual financial ‘contribution to’ the implementation of the AIP-NRS, as the scope of this definition goes beyond activities identified in the AIP-NRS. Due to the political sensitivity of drivers of deforestation in Cambodia, the scope of the NRS is limited to the forest sector. This study made a deliberate choice in broadening this scope to other sectors relevant to REDD+ in Cambodia, based on available studies.
- Grey land-use finance refers to any other land-use investments that have direct or indirect impacts on forest cover but whose net impact (positive or negative) on land use change is unknown. These activities are not aligned with the NRS objectives, but some of them could be if certain conditions were in place.
Cambodian stakeholders developed a detailed typology of land-use finance activities for the following sectors and themes that are relevant to land use: forestry, agriculture, infrastructure, livelihood development, and tourism. The typology was based on a literature review of national documents and consultations with stakeholders. It was then adjusted to the reality of land-use projects in Cambodia, during an analysis session with relevant stakeholders. A weighting approach was also designed to account for partial contributions of some activities to land-use objectives. The typology and more details on the methodology, data sources and limitations are available in the main report.
3.3 Data collection and analysis
Thanks to Cambodia’s experience with the implementation of the Climate Public Expenditure and Investment Review, identification of data sources was straightforward.
Recurrent budget data was provided by the Economy and Finance Ministry’s Department of Budget Formulation, and corresponds to planned figures. The analysis was based on the approved budget documents, as actual expenditure data disaggregated on a functional basis was not yet available due to ongoing public financial management reforms. Data obtained for programme-based budget ministries was broken down to levels of the sub-programmes and activities. This data was sufficiently detailed for tagging spending to land-use sectors. For the assessment, the data allowed tracking spending activities based on their functional classification by ministry. Data on Subnational Administration from the national budget was available at an aggregate level only, so it was only analysed qualitatively.
Domestic capital expenditure data (disbursed data from 2018) is captured in the Report on Chapter 21 Expenditure (Direct Investment) from the Ministry of Finance and broken down for investment projects by each ministry. For the quantitative assessment, the detailed analysis was conducted with disaggregation by ministry and sector.
International finance (disbursed data, 2018 were available from two sources: i) project disbursement data from ODA Database of the Council for the Development of Cambodia (CDC)/ Cambodia Rehabilitation and Development Board, and ii) project disbursements from the Ministry of Economy and Finance’s loan and grant data.
Detailed qualitative data, in particular on domestic projects, was hard to obtain.