Green Climate Fund and REDD+: Funding the Paradigm Shift or Another Lost Decade for Forests and the Climate?

This briefing describes the GCF’s different funding windows
and programs that might provide funding for REDD+,
discusses the risks associated with the GCF’s approach to
so-called results-based payments for REDD+, and presents
an overview of the GCF portfolio and pipeline of REDD+
projects.

The briefing shows that while recognition is growing
that REDD+ may actually be the wrong instrument for
tackling drivers of large-scale deforestation, the Fund is
announcing to scale up support for the most controversial
aspect of REDD+, results-based payments. An analysis of
the proposed REDD+ payment structure and first funding
requests for results-based REDD+ payment suggest the
GCF may be entering this controversial terrain seemingly
unaware of major pitfalls of results-based REDD+ payment
approaches. Information on REDD+ presented in this
briefing therefore focuses on the controversies surrounding
results-based REDD+ payments.

As currently designed, results-based REDD+ payments
are awarded in comparison to reference levels which are
determined either as average deforestation over a period
of years in the past, or as projection of anticipated future
deforestation. Therein lies a big risk as it makes results-based
REDD+ payment schemes prone to paying for paper
reductions manufactured through careful choice of the
reference level: For exactly the same volume of emissions
reduced through cutting deforestation and at the exact
same cost, wildly different payments can be requested,
based on the “result” manufactured through the choice of
the reference level. If the chosen reference level provides
no incentive to actually reduce and eventually halt deforestation,
the results-based REDD+ payment scheme risks
wasting scarce climate finance and will fail to contribute
to limiting global temperature rise to 1.5°C or well below
2°C.

The GCF is about to fall prey to this risk. The first
proposal approved by the GCF Board in February 2019
involves payment for reduced emissions from deforestation
in the Brazilian Amazon during 2014 and 2015. The reference
level is so inflated that actual deforestation in the
Brazilian Amazon today could more than double yet the
project proponents would still be able to claim results-based
payment for emission reductions from deforestation!
Curiously, the proposal does not quantify the volume
of emissions reduced as a result of the activities that will be
funded with the results-based payment.

Concept notes for REDD+ projects submitted under a
second GCF program and the Replenishment Strategy 5
suggest the problem with the GCF’s approach to funding
for forest and land use activities goes beyond poor design
of a pilot program. Several concept notes involve projects
which would generate and sell tradable REDD+ credits
while the ‘Forest and Land Use’ pathways outlined in the
Replenishment Strategy rely almost exclusively on REDD+,
at the expense of more robust, resilient, and synergistic
approaches to forest and land use.