Focal Area and Cross Cutting Strategies – multilateral REDD-plus financing

program

GEF Expanded Constituency Workshop25 – 27 October 2011

Nairobi, Kenya

The GEF-5 SFM/REDD-plus Program

Creating multiple environmental and social benefits through financing forests

Why are forests important for GEF?

Forests deliver multiple environmental and social benefits:

• CLIMATE CHANGE : Slowing tropical deforestation is bound to play a much larger role in mitigating climate change.

• BIODIVERSITY: Forests harbor over 60% of all terrestrial plant and animal species.

• LAND DEGRADATION: Forests providelivelihoods and vital environmental services to hundreds of millions of people.

Prior GEF investments in forests

• The GEF has been funding forest projects since its inception in 1991.

• Forests/Forest management is not a focal area. Until 2006, GEF support for forests was therefore mainly provided through the biodiversity and land degradation focal areas.

• In June 2007, the GEF-4 SFM Program was created, better known as the Tropical Forest Account (TFA). The TFA reserved funds from the Biodiversity, Climate Change, and Land Degradation focal areas for SFM operations in the three major tropical forest blocks (Amazonia, Congo Basin, New Guinea/Borneo).

• In total, > $400 million were invested in forests in GEF-4.

Under GEF-4, investments in forests were mainly single-focal area biodiversity conservation projects, thus not emphasizing the potential multiple benefits.

Type of forest projects under GEF-4

GEF-5 SFM/REDD-plus Program

Goal: achieve multiple environmental benefits from improved management of all types of forests.

Funding derives from three GEF Focal Areas (Biodiversity, Climate Change and Land Degradation)

Separate funding envelope created outside the STAR to provide incentive funding for interested countries

Objective 1: Reduce pressure on forest resources and generate sustainable flows of forest ecosystem services

Potential projects: • Forest policy, legal and regulatory framework (re)formulation;• Forest law enforcement and government (FLEG);• Sustainable harvesting technologies for timber and non-timber

products, forest function and management planning;• Forest certification and verification of timber supply chains;• Integrated forest fire management;• Conflict resolution approaches (e.g. disputed forest tenure and use);• Capacity building/Piloting of Payment for Ecosystem Services,

economic valuation tools.• Industrial, agricultural and domestic technologies reducing the

pressure on forest (energy efficiency, fuel substitution);• Increasing ecological connectivity at landscape level;• Community and small-holder forestry

Objective 2: Strengthen the enabling environment to reduce GHG emissions from deforestation and forest degradation (REDD+)

Potential projects: • Competition for land use and land-use changes (e.g. land use

potential and related planning activities; trade-off analysis);• Building of technical and institutional capacities to monitor and

reduce GHG emissions from deforestation and forest degradation;

• Testing and adopting approaches that allow for the generation of revenues from the carbon market.

Financing SFM/REDD-plus in GEF-5

SFM/REDD+ projects SFM/REDD+ projects

SFM/REDD+ projects

SFM/REDD+ projects

Climate Change

Biodiversity

Land Degradation

G

EF-5

Foc

al A

rea

Allo

catio

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SFM

/RED

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SFM

REDD+

I NC

EN

IT

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$250 million$750 million

$2.8 billion

$1 billion in total for SFM/REDD+

$1.0 billion

The GEF-5 SFM/REDD-plus incentive mechanism

• Investments from at least 2 GEF Focal Areas (BD, or LD, or CC) → maximizing multiple benefits

• 3:1 incentive ratio (e.g. $6 million from Biodiversity and Climate Change → $2 million from SFM/REDD+ account)

• Minimum of $2 million STAR contribution to access incentive funding per project

• Ceiling of $30 million STAR contribution to access incentive funding per project

• All GEF eligible countries can apply for incentive funding

Thank you