Finance for forest-based climate solutions accounts for just over 1% of global mitigation-related development funding, while tropical forests can provide up to 30% of the climate change mitigation needed to meet the objectives of the Paris Agreement.
Finance flows need to support the goals of the Paris Agreement and countries’ low carbon and climate -resilient development pathways. This includes financing both readiness efforts as well as rewarding performance.
Tropical forest countries need access to higher volumes of international climate finance and carbon finance to meet their NDC targets.
NDCs must be implemented with robust social and environmental safeguards, particularly with regards to respecting the rights of Indigenous Peoples and local communities and promoting social equity in access to finance.
UNDP Climate & Forests provides support to countries to access to REDD+ finance and carbon markets by:
Results-based payments for REDD+:
UNDP Climate and Forests supports countries' access to REDD+ performance-based finance and the re-investment of these resources in further climate change mitigation action in the forest sector. This is done through, the setting up and strengthening of domestic schemes for payment for environmental services and community forestry programs.
These mechanisms support green recovery from COVID-19 through sustainable, socially inclusive, and gender-responsive rural development and equitable benefit-sharing.
The flagship programs include, Brazil’s Floresta+, Ecuador’s Socio Bosque Program, Indonesia’s Social Forestry Program, and Costa Rica’s world-renowned Payment for Environmental Services Programme.
Carbon market readiness:
Carbon markets are trading systems where emission reductions - measured in terms of carbon dioxide equivalents - can be sold and bought.
UNDP recognises the critical role carbon markets can play in the low-carbon transition by creating an economic incentive for reducing emissions and providing essential finance to developing countries to meet and exceed their Nationally Determined Contributions (NDCs).
UNDP supports high ambition and integrity in international carbon markets to ensure they deliver overall mitigation in global emissions and avoid double counting. Moreover, UNDP supports countries to participate in carbon markets as part of a multi-sector strategy to finance integrated national climate action.
Explore more: What are carbon markets and why are they important?
Deforestation-free commodity supply chains:
As part of UNDP's overall approach to sustainable finance, UNDP Climate & Forests pioneers work to foster investment in deforestation-free commodity supply chains. Working with initiatives like Ecuador’s ProAmazonia, in partnership with private-sector counterparts such as Lavazza and SilvaCacaco, UNDP brings a collective vision to improve production systems and promote quality products like cacao, coffee and palm with high socio-environmental integrity in different countries.