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Development Account Projects

Climate Change Financing for Forests: Reducing Emissions from Deforestation and Forest Degradation (REDD+) and its Impacts on Financing for other Functions of Forests Worldwide


Following two decades of gradual decrease, financing for sustainable forest management has come to the centre stage of the global development debate. With the emergence of several new financing mechanisms, such as reducing emissions from deforestation and forest degradation (REDD+), the Green Fund and an sustainable forest management-REDD+ window of funding by the global environmental facility, forest financing is receiving strong support among donor and recipient countries. In 2009 the Copenhagen Summit of the United Nations Framework Convention on Climate Change pledged $4 billion for fast-start funding of REDD+, with a further $1.5 billion by June 2010.
These new mechanisms have revitalized international financing for forests by recognizing that clearing forests contributes from 12 to 20 per cent of global greenhouse gas emissions and thus that sustainable forest management is closely linked to climate change.

So far the main focus in this area has been on technical issues concerning the implementation of the new mechanisms. Few, if any, have studied the implications for forest financing more broadly. This issue is all the more relevant as these new sources of funding focus on forests as carbon stocks, potentially leaving out the numerous other values of forests, including the ecological, economic and social. It is essential to understand how these new sources of funding could affect the broader range of forest financing, in particular how they are spread across both countries and sectors, what are the potential gaps, obstacles and opportunities, and how additional funding will further impact financing for forests.

The project aims to look beyond new funding mechanisms and places the potential influx of finance within the broader framework of sustainable forest management. This is fundamental to building the foundation towards ensuring that REDD+ and other sources of financing contribute more effectively to the implementation of sustainable forest management in developing countries.
The project also responds to the new mandate of the secretariat of the United Nations Forum on Forests as stated in the resolution of the ninth session of the Forum, in which the Forum requested its secretariat “to examine the implications of new and emerging forest-related financing initiatives relating to the three Rio Conventions, on broader forest financing”.

Forests are an issue that cuts across all three Conventions. This issue calls for exploring different financing mechanisms at the international level. However, regulations for applying these funds and the full extent of their impact remain unclear and compound the complexity of the forest financing landscape. The project will thus assist countries to better harness the potential of the three Rio Conventions in terms of forest financing and ensure that funds are used for more effective implementation of sustainable forest management.


To assist decision makers in developing countries to effectively harness funding from new and emerging sources of forest financing, including REDD+, by addressing gaps in forest financing

Expected accomplishments:

  • Increased awareness among national decision makers in developing countries (particularly in forestry and such related sectors as finance, agriculture, transport and energy) of the impact of new and emerging funding sources on forest financing
  • Enhanced capacity of decision makers in developing countries to secure REDD+ and other funding related to the three Rio Conventions that responds to sustainable forest financing needs

Implementation status:

In progress.