Major bilateral and multilateral initiatives
Much of the support for REDD+ preparations, investments and result-based payments comes from the development and cooperation budgets of donor countries. This support helps countries build capacities and develop policy and legal frameworks to reduce deforestation and improve forest and land-use governance. It also allows REDD+ countries to develop pilot projects at national and sub-national scales that aim to demonstrate how to:
- Build institutional capacities
- Manage a results-based payment system
- Distribute benefits to rural forest communities, farmers and smallholders
- Involve the private sector
- Monitor and assess performance
In the case of result-based payments, donor support helps pilot incentive payments for REDD+ activities in REDD+ countries.
This support ranges from work by individual companies and NGOs to bilateral and multilateral cooperation agreements at a national scale. The financing of these initiatives ranges from a few thousand euros to almost a billion euros.
Major bilateral donors to REDD+
Quantifying REDD+ and forest-related finance is challenging from a methodological point of view due to the lack of formal criteria for what constitutes REDD+ finance. A study published by the Center for Global Development in 2014 estimated the total global financing for REDD+ at about USD 9.8 billion, 90% of which was from the public sector.
After Norway, the European Union and its member states are the main sponsors of REDD+, providing about 30% of the global total. They support REDD+ as a measure to preserve and strengthen the role of tropical forests in climate change mitigation, adaptation and development. From 2006 to 2014, the EU and its member states provided EUR 3 billion in support of REDD+ activities. This support covered a wide range of thematic areas, countries and funding channels.
In addition to support from its member states, the EU finances REDD+ activities through:
- The European Commission's Global Public Goods and Challenges programme.
- Support to multilateral initiatives, such as the UN-REDD Programme and the World Bank's Forest Carbon Partnership Facility.
- The Global Climate Change Alliance+ initiative, which helps developing countries to mitigate and adapt to climate change, in support of the achievement of the Sustainable Development Goals. The alliance focuses on the least developed countries.
- The EU REDD Facility, which provides support to improving land-use governance as part of developing countries’ efforts to slow, halt and reverse deforestation. The Facility also supports the overall EU effort to reduce its contribution to deforestation in developing countries.
Beside the European Union, the major contributors to the REDD+ implementation in developing countries are Germany, Japan, Norway, the United Kingdom and the United States. Each focuses its support for REDD+ according to its own priorities:
- Germany focuses its support on the biodiversity benefits of REDD+, and on delivering technical assistance to REDD+ countries. Germany's REDD+ Early Movers programme promotes forest conservation and strengthens result-based payments for reduced emissions in countries that have already taken independent action to mitigate climate change.
- Japan’s support has focused on building capacity for monitoring, reporting and verification, and on technology transfer.
- Norway has made large-scale commitments to REDD+ financing as part of its International Climate and Forest Initiative, aiming at contributing to early actions for measurable emission reductions from deforestation and forest degradation.
- UK finance for REDD+ focuses on forest governance, including FLEGT (forest law enforcement, governance and trade), commodities, markets and the role of the private sector.
- US funding for REDD+ features market-based approaches, a strong role for global conservation organisations and commodity supply chain initiatives, such as the Tropical Forest Alliance 2020 (with the Netherlands, Norway and the United Kingdom).
Multilateral initiatives on REDD+
The two main multilateral initiatives on REDD+ are the World Bank's Forest Carbon Partnership Facility and the United Nations REDD programme: UN-REDD. These initiatives have each grown to include 50-60 countries, a growing number of which are engaged in both initiatives.
Almost 10 years into implementation, these programmes provide broad ‘readiness' support, which helps countries build the capacities, institutions and knowledge for establishing national REDD+ strategies. The Forest Carbon Partnership Facility has also established a separate funding mechanism called the FCPF Carbon Fund. During the period 2015-2020, the Carbon Fund will support a small number of countries to pilot results-based REDD+ payments on a large-scale.
Other multilateral channels for REDD+ finance include:
- The Forest Investment Program, which helps countries bridge the gap between REDD+ readiness and results-based payments.
- The World Bank's BioCarbon Fund Initiative for Sustainable Forest Landscapes, which focuses on smarter land-use planning, policies and practices to reduce emissions from the land sector.
- The Green Climate Fund, set up under the UN Framework Convention on Climate Change to promote a paradigm shift to low-emission and climate-resilient development. The fund provides support to maintain and amplify efforts to implement the early phases of REDD+. It has also been consulting widely on how to incorporate REDD+ results-based payments as a cornerstone of its climate finance and provide finance for countries in all phases of REDD+.
- The Central African Forest Initiative supports strategic, holistic and country-level REDD+ and Low Emission Development investments while focusing on Central African high-forest cover countries. Its objective is to recognise and preserve the value of the forests in the region to mitigate climate change, reduce poverty and contribute to sustainable development.