International finance for forests does not reflect their climate change mitigation potential. The forest sector has the third highest mitigation potential – after the energy and industry sectors – yet only USD 20.2 billion in public finance for forests has been committed to deforestation countries since 2010. By contrast, global investment into renewable energy has totaled approximately USD 2.6 trillion since 2010, although this includes finance from private sources.
Just over USD 6.6 billion in REDD+ finance has been committed by multilateral climate funds since 2010. Less than half of this amount has been disbursed, with most of this occurring in the last two years. Estimates of the amount of private finance channeled to forests over this timeframe are not available.
Public budgets need to better align with objectives to halt deforestation. Domestic “grey” financing for agriculture and forestry in deforestation countries is estimated to total USD 135 billion; while domestic financing for REDD+ activities totals only USD 10.1 billion. As long as financial incentives for land use do not consider the impact on forest loss and degradation, investments in forest protection will not be successful at the scale needed to curb forest loss.
To date, at least USD 683 million in funding capital has been committed by publicprivate investment funds to support the adoption of sustainable land practices. The amount of private capital mobilized through these investment funds, however, is rarely reported.
Most financial institutions do not consider the impact of their investments on forests. More than 86 percent of the 150 financial institutions providing the largest amount of finance to commodity companies (as assessed by Forest 500) have no deforestation policy in place for the companies they finance.
Quantifying private investments in sustainable commodity production remains a key data gap, and most public-private impact investors do not report on the amount of private finance mobilized.
The Forest Declaration Assessment and the Forest Declaration Platform have been supported over the years by the Climate and Land Use Alliance, the Good Energies Foundation, the Bezos Earth Fund, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) of Germany, and the International Climate Initiative (IKI) of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), which supported this initiative on the basis of a decision adopted by the German Bundestag.
This project is supported by the Climate and Land Use Alliance and the Good Energies Foundation. Research that contributed to this project is part of the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports this initiative on the basis of a decision adopted by the German Bundestag.
Download
Share
Download
