UNEP-FI and Partners Support Strategic Approach to REDD+ Financing

UNEP FI8 February 2014: The UN Environment Programme Finance Initiative (UNEP-FI), in collaboration with the Global Canopy Programme (GCP), the Amazon Environment Research Institute (IPAM), and Flora and Fauna International, issued a call for a 2015-2020 strategic approach to REDD+ financing through the Interim Forest Finance Project.

In a report, titled ‘Stimulating Interim Demand for REDD+ Emission Reductions,' UNEP-FI and partners propose strategic actions to scale-up public and private sector demand for REDD+ investments over a five-year period. The report seeks to address the current gap between supply and demand, which is resulting in early movers providing significantly less financing than current project proposals could consume.

The report notes that the fast start finance (FSF) period (2010-2012), agreed by parties to the UN Framework Convention on Climate Change (UNFCCC) in 2009, resulted in pledges of US$4.5 billion. However, it stresses that these pledges need to be scaled-up to meet the expected costs of between US$4 and 48 billion in the interim period (the period between FSF and long-term finance, which will start in 2020). In order to achieve such financing, the report calls for the establishment of a performance-based financial incentive with clear price signals must in order to reduce REDD+ financing risks. Furthermore, it stresses that a strategic intervention to stimulate demand is necessary and should build on existing institutions, mechanisms and funds.

The strategic intervention, according to the report, could consider how capital can be generated, deployed and managed in order to reduce risk and promote diverse investments in REDD+. [Publication: Stimulating Interim Demand for REDD+ Emission Reductions: The Need for a Strategic Intervention from 2015 to 2020] [UNEP FI Website]