REDD+ Financing: Closing the Gap
During Forest Day 6 the UN-REDD Programme, IUCN and UNEP hosted a discussion on REDD+ financing to address the challenges posed by the current REDD+ finance gap.
The REDD+ financing discussion forum at FD6, hosted by the UN-REDD Programme, IUCN and UNEP, brought together a panel of international experts to address the challenges posed by the current REDD+ finance gap. Although the REDD+ community often focuses on the financial gap between predictions of what is required for REDD+ and what is currently pledged for REDD+, one of the clear messages to emerge was that narrowing the ‘perspective gap’ was a critical precondition to narrowing the financial gap.
Ms. Naoko Ishii, CEO of the Global Environment Facility (GEF) described the role the GEF can play as champions of the global commons. Ms. Ishii outlined several key areas where more work is needed. These included integrating natural capital values into decision making, better co-ordination between existing sources of finance, the continued strengthening of domestic capacity and the importance of public-private partnerships. She illustrated the effectiveness of such partnerships with the example that US$425 million of GEF funding for Sustainable Forest Management/REDD+ in the last two years has catalyzed around US$3.4 billion in co-financing.
Ambassador Hans Brattskar, Director General and Special Envoy for Climate Change from the Norwegian Ministry of the Environment, underscored the fact that REDD+ is a long-term development choice which is dependent on predictable and adequate financing. He also stressed that although REDD+ should be a key part of the 2020 framework, decided upon in 2015, we can not afford to be complacent before then. We must also consider the risk of inaction, rather than just the risk of action. He also expanded on the need for strong political will and the importance of measurement, reporting and verification (MRV) to the international community if countries are to bring about land-use change on a transformative scale. Mr. Brattskar stressed the need for pragmatism, rather than overcomplicating an already complex area.
Mr. Don Kanak, Senior Fellow at Harvard Law School’s Program on International Financial Systems and Chairman of Prudential Corporation Asia, spoke about the preconditions for unlocking the large volumes of institutional investment for REDD+ that are already flowing at scale into other low carbon investments such as renewable energy and energy efficiency. He stressed that narrowing the ‘perspective gap’ was a critical step to narrowing the financial gap. Mr. Kanak explained that the ‘perspective gap’ currently exists due to the wide range of expertise –from policy to conservation and finance- required to make REDD+ a reality. However, without understanding the language, motivations and concerns of all the various actors, it is very hard to make progress. He also touched on some of the key preconditions that will allow large, responsible institutional investors to invest at scale. These included a clear understanding and predictability of the relevant rules and policies, the ability to project revenue and the expectation that risks can be quantified.
Mr. Thierry Nowaczyk, Product Environment Manager at Airbus, discussed some of the experiences Airbus has had with their ‘Plant a Pledge’ scheme. The project is a partnership with IUCN that was conceived as a corporate social responsibility (CSR) initiative. However, over time it has developed into something much more interesting strategically, delivering a range of attractive co-benefits beyond the expected environmental returns into unexpected areas such as advances in their knowledge of bio-fuels. It was a compelling example of the synergies that can be identified and enhanced by innovative thinking and partnerships.
Mr. Pak Heru Prasetyu from the Indonesian National REDD+ Task Force drew on his experience from the reconstruction of Aceh in the wake of the 2004 tsunami. US$7.2 billion was successfully invested in Aceh over four years and there are many lessons that have been learned which are very applicable to REDD+. These include the importance of a shared vision and shared values, trust, moving ahead at the right speed, accountability, transparency and flexibility. He also stressed the need for strong and credible environmental and social safeguards as being key to encouraging risk-averse investors.
The rapporteur’s full summary of the discussion forum can be downloaded from the Forest Day website here. A video of the discussion forum can be viewed here.