Climate Finance Fundamentals 5: Climate Finance Thematic Briefing - REDD+ Finance
Since 2008, USD 6.5 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 2024, the Forest Carbon Partnership Facility (FCPF) 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 (FIP) of the Climate Investment Funds (CIFs) 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 2024 has seen high approvals for REDD+ with USD 341 million as compared to an average approval of USD 203 million during the past five years. This is reflective of the activities from the Amazon Fund which approved a record amount of USD 205 million in 2024. By December 2024, the Green Climate Fund (GCF) had approved at least 21 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. The GCF decided in 2024 to mainstream REDD+ results-based payment approaches under its normal funding cycle going forward, with a funding cap still to be set for its GCF-2 programming period until the end of 2027. 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. Confirmed by the high level in REDD+ approvals from the multilateral climate change funds in 2024, 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 COP28 announcement to create a multilateral investment fund for global tropical forest conservation called the Tropical Forest Finance Facility.