Climate Finance Fundamentals 5: Climate Finance Thematic Briefing - REDD+ Finance

Since 2008, USD 5.6 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 3 billion has been approved for dedicated REDD+ activities since 2008. In 2022, the Forest Investment Program of the Climate Investment Funds became the dedicated REDD+ fund with the largest amount of financing approved with USD 688 million for 59 projects, surpassing approved funding by the Amazon Fund, whose operations, after having been frozen since 2019, are expected to fully resume in 2023 under Brazil’s new government.

The year 2022 has seen relatively low approvals for REDD+ with USD 111 million, whereas this amount was relatively stable during the past five years averaging 216 million. The increase observed in the past years was due to the rise of funding from the Green Climate Fund (GCF). By November 2022, it had approved at least 16 projects involving forests, that are considering both adaptation and mitigation, and eight dedicated REDD+ projects with resultsbased payments for a total of USD 497 million under its multi-year REDD+ pilot programme, currently under review. 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 stagnating REDD+ flows from the multilateral climate change funds, forest protection and conservation efforts have ramped up since 2021, including with the Glasgow Leaders’ Declaration on Forests and Land Use at COP26, and with several other forest protection financing initiatives.