Terrestrial Ecosystems Finance Update: GEF Council Approves Work Program and Projects, Forest Finance in Focus
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Over recent months, the Global Environment Facility (GEF) Council and the governing bodies of the Climate Investment Funds (CIFs) met, adopting forest-related initiatives, including some of relevance to reducing emissions from deforestation and forest degradation in developing countries (REDD+).

This Update covers these and other meetings related to the financing of activities on terrestrial ecosystems, as well as recent projects and publications in this area.

terrestial_ecosystem_finance19 July 2016: Over recent months, the Global Environment Facility (GEF) Council and the governing bodies of the Climate Investment Funds (CIFs) met, adopting forest-related initiatives, including some of relevance to reducing emissions from deforestation and forest degradation in developing countries (REDD+). This Update covers these and other meetings related to the financing of activities on terrestrial ecosystems, as well as recent projects and publications in this area.

This Update provides an overview of global, regional and country-level financial developments of relevance to Sustainable Development Goal (SDG) 15, ‘Life on Land.’ It reports on finance related to SDG 15 targets on forests, land, mountains, biodiversity and wildlife, during the period April to July 2016.

GEF Council Approves Progammes on Wildlife, Restoration

Meeting from 7-9 June 2016, at World Bank headquarters in Washington, DC, US, the GEF Council approved a work program comprising 38 project concepts and four programmatic approaches, with total resources amounting to US$398.68 million. Two programmatic approaches are of relevance to the implementation of SDG 15: ‘Global Partnership on Wildlife Conservation and Crime Prevention for Sustainable Development,’ and ‘The Restoration Initiative – Fostering Innovation and Integration in Support of the Bonn Challenge.’ Approved multi-focal area projects include those on: incorporating multiple environmental considerations and their economic implications into the management of landscapes, forests and production sectors in Cuba; ‘Mainstreaming Conservation of Biodiversity and Ecosystem Services in Productive Landscapes in Threatened Forested Mountainous Areas’ in the Dominican Republic; and ‘Green-Ag: Transforming Indian Agriculture for Global Environmental Benefits and the Conservation of Critical Biodiversity and Forest Landscapes.’ [IISD RS Story on the GEF Council Meeting] [GEF Press Release]

In addition, the GEF Council approved a number of projects on biodiversity, wildlife and land. These are addressed, along with other meetings and outcomes, under relevant clusters below.

Promoting Investment in Forests

A number of meetings organized during the period covered by this Update addressed forest finance. An expert workshop held in April in Solsona, Spain, gathered forestry investors, bankers, project developers, technical service providers and development partners. Organized by the Food and Agriculture Organization of the UN (FAO) and the Forest Sciences Center of Catalonia, the workshop focused on how to promote investment in sustainable forestry by reducing the risks for private sector investors. Participants identified five areas that should lead to substantial progress in promoting private sector forestry investment: addressing fragmentation and building integrated value chains; bridging knowledge and communication gaps; developing a good pipeline of bankable projects; strengthening the enabling environment; and establishing a community of practice. [FAO InFO News, May 2016] [Workshop Documents and Presentations]

A meeting of the governing bodies of the Climate Investment Funds (CIF) held from 12-17 June 2016, in Oaxaca, Mexico, included a meeting of the Sub-Committee of the Forest Investment Program (FIP) on 16 June, which considered the investment plan of Mozambique on forest management. The FIP is a US$775 million funding window that provides direct investments to support developing countries’ REDD+ objectives and developments efforts. A FIP Country Pilot Meeting held from 12-14 June 2016 aimed to foster peer-to-peer learning related to FIP investment plans and other forestry activities. The event gathered feedback on strategic direction for FIP and participants heard a presentation from Mexico on its community experiences in SFM, funded by FIP and other sources. [IISD RS Story on CIF Meetings] [CIF Press Release]

REDD+ was also the focus of the Oslo REDD Exchange 2016, which took place from 14-15 June 2016. The event enabled the sharing of perspectives among professionals and leaders working on REDD+. Participants addressed, among other issues, REDD+ implementation, domestic and international options for results-based finance, and corporate supply chain commitments. [IISD RS Story on the Oslo REDD Exchange] [Oslo REDD Exchange Webpage]

Meeting from 20-22 June 2016, the World Bank’s Forest Carbon Partnership Facility (FCPF) heard from Costa Rica and the Democratic Republic of the Congo on their large-scale programmes, aiming to reduce forest loss and to improve the livelihoods of indigenous peoples and local communities. Costa Rica and the Democratic Republic of the Congo are the first two countries on track to receive results-based payments from FCPF for conserving tropical forests at scale. [World Bank Press Release] [FCPF Website]

Forest finance has not only been the focus of recent meetings, but also of recently-approved projects. Among the developments concerning multiple regions and countries, a US$30 million funding agreement was formalized between the EU and FAO, aiming to support tropical timber-producing countries in curbing illegal logging, improving forest governance and promoting the trade of legally-sourced timber. The project will involve greater collaboration with private sector entities, big and small, in both producer and consumer countries, to address some of the bottlenecks to producing legal timber. It will look specifically at empowering small and medium forest enterprises in Africa, Latin America and the Caribbean, and Asia, including smallholder wood producers that often have difficulties verifying compliance with legality standards, to gain access to green markets and improve their livelihoods. [FAO Press Release]

One of the projects approved by the GEF Council, ‘The Restoration Initiative,’ received programmatic support of US$54 million. Led by the International Union for Conservation of Nature (IUCN) and implemented in partnership with FAO and the UN Environment Programme (UNEP), the Restoration Initiative will generate action on forest landscape restoration helping to reverse the land and forest degradation that undermine efforts to eliminate poverty, hunger and biodiversity loss and the ability of communities to adapt to the impacts of climate change. It will be implemented in Cameroon, the Central African Republic, China, the Democratic Republic of the Congo, Guinea-Bissau, Kenya, Myanmar, Pakistan, São Tomé and Príncipe, and Tanzania. Country projects will be linked by a Global Learning Finance and Partnerships project, which will provide knowledge, tools and policy support to strengthen coherent delivery of the initiative. Importantly, IUCN and its partners will ensure the sustainability of project outcomes by strengthening local and national institutions through access to a broad array of resources and promoting South-South learning and cooperation. A key component of the initiative will be the development of models for investment. [IUCN Press Release]

Africa in the Spotlight

Some recent initiatives centered specifically on the African region. The Central African Forest Initiative (CAFI) and the Minister of Finance of the Democratic Republic of the Congo signed a letter of intent for US$200 million to address factors contributing to forest loss in the country, including agricultural expansion, the use of fuelwood, illegal logging, land-use planning, unsecured tenure, demographic pressure, and oil and mining activities, integrating also governance issues. The agreement’s key elements reflect the cross-sectoral nature of the issues at stake to end forest loss in the country, policy-level commitments combined with more technical objectives, and an emphasis on transparent processes and engagement of stakeholders. Signed on 22 April, the letter of intent is the first one signed between CAFI and a country of the Central African region, and the largest ever concluded on REDD+ in Africa. [UN REDD Press Release]

The Liberia Forest Sector Project, the first project signed under the World Bank’s Forest Action Plan, was launched in April 2016, with a US$36.7 million grant from the Government of Norway. The project aims to maximize the forest sector’s contribution to the country’s economy, poverty alleviation, job creation and growth. It aims to support the country’s transition from commercial forest management to one that integrates conservation and community-driven management through the strengthening of relevant institutions, policies and capacities, and by attracting investments in sustainable forest management (SFM). [World Bank Press Release]

With regard to Asia, one of the FIP-funded projects aims to support Indonesia’s Forest Management Unit initiative by strengthening the capacity of local governments, community groups and license holders to manage forests, and foster partnerships among them. The project also seeks to address weakness in legislation and policies that affect the forest units; and support the establishment of information systems that allow stakeholders to share knowledge and learn from each other’s successes. In addition to building capacity, the project will select up to ten pilot sites to implement SFM and test sustainable investment opportunities [World Bank Press Release]

Forest Conservation in Costa Rica and the Democratic Republic of the Congo

In April, a comprehensive analysis of forest conservation finance flowing to the Democratic Republic of the Congo has been released by Forest Trends, a non-profit organization that tracks global forest developments. The report shows the evolution and steady growth of REDD+ finance since 2009. It reveals a trajectory that began with basic preparatory and capacity-building activities in the early years, and that recently moved to support more advanced implementation activities, culminating in the announcement of the Central African Forest Initiative last year. [Congo Basin Forest Partnership Press Release]

With support from the World Bank’s Wealth Accounting and the Valuation of Ecosystem Services (WAVES) Partnership, the Central Bank of Costa Rica and the Ministry of the Environment and Energy released Costa Rica’s first forest accounts. The forest accounts provide data on how much and what types of forest are found in Costa Rica, how much forests and forest products are worth, and how numbers change over time. The results have implications for the country’s forest resource management. A major finding is that forests contribute more to Costa Rica’s gross domestic product (GDP) than previously thought: around 2%, including returns from timber, other forest products, and economic activities that make use of forest products. This is in contrast to industry figures from national accounts that only consider timber extraction. The accounts show that Costa Rica’s forests are more valuable than expected, underscoring the importance of adjusting forest policies to effectively protect and manage such resources. [World Bank Press Release]

Integrated Approaches to Land

In the land sector, recent months brought news on meetings and projects that aim to promote an integrated approach to land, taking into account concerns over climate change mitigation and adaptation, as well as REDD+.

Held on 6 June 2016, in London, UK, the ‘Global Landscapes Forum: The Investment Case’ brought together experts from the financial services industry with participants from government, academia and the corporate sector, to explore the role of private finance in enhancing livelihoods and landscapes across the globe. The meeting addressed a series of finance-related issues, including obstacles preventing sustainable finance, climate finance, and decoupling deforestation from supply chains. Discussions covered topics such as diversifying financial instruments to realize REDD+, risk reduction measures for private sector investment in landscape restoration, the assessment of legal and policy frameworks for landscape investment in Africa, and how to link angel investors to land-use startups. For the first time, a ‘Dragon’s Den’ was held to allow presenters to pitch concrete investment opportunities to a panel of investors, finance experts and land-use practitioners. All pitches introduced real projects at an advanced stage. The Land Degradation Neutrality Fund, created by Mirova and the Global Mechanism of the UN Convention to Combat Desertification (UNCCD) to support large-scale rehabilitation of degraded land for sustainable use with long-term private sector financing was pitched. The meeting was organized by the Center for International Forestry Research (CIFOR) of the CGIAR Consortium, along with members of the Global Landscapes Forum (GLF) Partnership. [IISD RS Story on the Event] [IISD RS Story on the Land Degradation Neutrality Fund] [Event Webpage]

An integrated approach to land use is also the focus of joint work agreed between the Central American Bank for Economic Integration (CABEI) and FAO. This collaboration will promote investments that reduce rural poverty and promote socioeconomic development and Central American integration, as well as support climate change adaptation and mitigation policies and measures in the Dry Corridor countries, including El Salvador, Guatemala and Honduras. Initial areas of focus include land restoration and integrated approaches to land use; mountain and SFM; public-private partnerships; and market access. [IFAD Press Release]

Finally, the GEF Council approved a regional project on land degradation, ‘Healthy Ecosystems for Rangeland Development: Sustainable Rangeland Management for Biodiversity Conservation and Climate Change Mitigation.’ This project will be implemented in Egypt and Jordan. IUCN will act as the Executing Agency under UNEP. [IISD RS Story on the GEF Council Meeting] [GEF Press Release] [IUCN Press Release]

Biodiversity and Wildlife

The GEF Council approved four projects on biodiversity, including ‘The Path to 2020 – Antigua and Barbuda,’ and ‘Securing the Future of Global Agriculture Facing the Threat of Climate Change, Conserving the Genetic Diversity of the Traditional Agroecosystems’ in Mexico. The Council also approved an additional US$40 million for the Global Wildlife Program, expanding support to this partnership focused on fighting illegal wildlife trafficking and poaching in 19 countries in Africa and Asia. [IISD RS Story on the GEF Council Meeting] [GEF Press Release]

Another GEF-supported initiative was launched to help prevent the extinction of rare birds and other endangered species. The initiative will mobilize US$6.7 million to deliver a project titled ‘Conserving Earth’s most irreplaceable sites for endangered biodiversity.’ The project will support the creation and management of protected areas and aims to improve the conservation status of endangered species at five demonstration sites in Brazil, Chile and Madagascar, and at ten additional sites globally. The initiative is part of the Alliance for Zero Extinction and is led by Birdlife International, American Bird Conservancy, IUCN, UNEP, GEF, and the Governments of Brazil, Chile and Madagascar. [GEF Press Release]

With regard to policy guidance, the second Global Workshop of the UN Development Programme (UNDP) Biodiversity Finance Initiative (BIOFIN) was held from 12-14 April 2016, in Los Cabos, Mexico. BIOFIN is a global partnership aimed at enabling countries to measure their current biodiversity expenditures, assess their financial needs in the medium term and identify the most suitable finance solutions to bridge their national biodiversity finance gaps. The workshop facilitated experience sharing on biodiversity finance; discussed the results from BIOFIN implementation to inform global fora and future programming; and explored opportunities for biodiversity finance solutions and investments in BIOFIN countries. [BIOFIN Press Release] [BIOFIN Website]

Addressing the Threat of Hunger in Mountains

Announced on 22 April 2016, FAO and the Mountain Partnership Secretariat will start a Mountain Facility, a funding mechanism to address the rising threat of hunger in the mountain areas of developing countries. The funding mechanism will aim to empower vulnerable mountain communities, increase their food security and eradicate poverty, including through the conservation and sustainable use of mountain ecosystems. [IISD RS Story on the Mountain Facility] [Mountain Partnership Press Release]


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