Tropical high integrity forests, mainly found in the Amazon Biome, Congo Basin, and Southeast Asia, are areas of relatively undisturbed and undegraded forest. They are among the most biodiverse places on earth and the carbon sequestration and storage they provide is crucial to achieving global net zero goals.
Given their historically low deforestation rates, such areas have not benefited from traditional sources of climate finance for forests (e.g., via REDD+) due to the complexity of establishing credible baselines for additionality. As threats to these forests increase, new mechanisms are needed to enhance finance flows to maintain them.
The U.K.’s Department for Energy Security and Net Zero (DESNZ) is funding Climate Policy Initiative’s Global Innovation Lab for Climate Finance (the Lab) to support one financial instrument for high integrity forests in 2024. Submissions for ideas are open until 5 PM PST on December 27, 2023. The selected proposal will be supported with analysis, stress-testing and guidance from experts and investors, before progressing to endorsement and launch in September 2024.
This new Lab stream recognizes the challenges in mobilizing investment for high integrity forests, including high perceived and real risks by investors, the small ticket sizes of existing projects, and limited financial markets in the areas where such forests are located. It also recognizes the potential for new ideas to unlock flows of climate finance and harness the skills of the private sector.
Several mechanisms supporting high integrity forests are already operational, including the UK government-funded Biocredit Investment Operations program being piloted in Zambia and Uganda. This finances community-led conservation efforts, reduces poverty, and protects biodiversity.
Another example is the Sustainable Commodities Conservation Mechanism in Southeast Asia, pitching conservation projects to companies and channelling their payments to those delivering forest protection. Other pilots across the global south are generating revenue streams from the sale of non-timber forest products or, in some cases, of timber from well-managed and sustainable natural forest management.
Working with Indigenous Peoples and Local Communities
Indigenous Peoples and Local Communities (IPLCs) are doing vital work to support forests, developing effective and cost-effective solutions to address multiple climate, biodiversity, and livelihood challenges. They need much greater support.
The 2019 global assessment by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services highlighted the importance of “national recognition of land tenure, access and resource rights in accordance with national legislation, the application of free, prior and informed consent, and improved collaboration, fair and equitable sharing of benefits arising from the use, and co-management arrangements with local communities.”
IPLCs receive less than 1% of climate finance, despite owning, managing, using, and occupying over a third of land that is formally protected and/or has low levels of human intervention. Furthermore, only 17% of climate and conservation funding intended to support IPLCs actually reaches them. Increasing fit-for-purpose funding mechanisms that incorporate IPLC voices is a key priority to address these challenges.
It is widely accepted among the international development finance community that without direct finance and support, IPLCs will be unable to defend the ecosystems, ways of life and knowledge systems that are critical to addressing the climate crisis. Particular interest will be given to ideas submitted to the new Lab window that effectively consider their design, impact, and approach in relation to IPLCs within and around high integrity forests.
Bringing Lab expertise to High Integrity Forests
The Lab has a strong track record of working with financing mechanisms in the Agriculture, Forestry and Other Land Use sector. Building on insights gained through a recent study by the Lab/CPI funded by DESNZ, which interviewed experts from 26 institutions, the new High Integrity Forests Window will provide dedicated technical assistance to one financial instrument. This will include capacity building support via an expert group of Lab members and the opportunity for the selected idea to pitch to investors at the Lab’s annual Endorsement event.
Similarly, if you could provide expert advice through our working groups to the selected instruments that we accelerate, please get in touch.
Details on the Lab process, including how to apply for the new Lab High Integrity Forests window can be found here.
You can also view a webinar on the 2024 call for ideas, which discussed the application process, selection criteria, priority areas, benefits of Lab support and the Lab process.