Climate Finance Fundamentals 5: Climate Finance Thematic Briefing - REDD+ Finance
Since 2008, USD 6.4 billion has been pledged to multilateral climate funds that support efforts to reduce emissions from deforestation and degradation plus conservation (REDD+). There is and remains a longstanding interest in the potential to harness market-based mechanisms to support REDD+ programmes. Cumulatively, USD 4 billion has been approved for dedicated REDD+ activities since 2008. In 2023, the Forest Carbon Partnership Facility is the dedicated REDD+ fund with the largest amount of financing approved with USD 1 billion for 61 projects, surpassing approved funding by the Forest Investment Program of the Climate Investment Funds and the Amazon Fund, whose operations, after having been frozen since 2019, resumed in 2023 under Brazil’s new government. These funds have differing operating modalities however, from supporting readiness to deliver emission reductions to paying directly for emission reductions, that complicate fund comparisons.
The year 2023 has seen relatively low approvals for REDD+ with USD 88 million as compared to an average approval of USD 362 million during the past five years. This is reflective of a period of formalisation of emission reduction purchase agreements across the 15 emission reductions programmes from the Forest Carbon Partnership Facility (FCPF) carbon fund as well as the end of the Green Climate Fund (GCF) REDD+ results based payment pilot. By November 2023, the GCF had approved at least 19 cross-cutting projects involving forests, that are considering both adaptation and mitigation elements, and eight dedicated REDD+ projects with results-based payments for a total of USD 497 million under its concluded multi-year REDD+ pilot programme. A second REDD+ programming phase is planned to start in 2024. These projects reflect efforts to support developing countries’ move beyond readiness and capacity building to demonstration programmes and emission reductions with payments based on verified results. Despite a slow down in REDD+ approvals from the multilateral climate change funds in 2023, forest protection and conservation efforts continue to ramp up. This includes the 2021 Glasgow Leaders’ Declaration on Forests and Land Use at COP26, as well as Brazil’s global tropical forest conservation fund proposal announced at COP28.