Investing in Results: Enhancing Coordination for More Effective Interim REDD+ Financing

Executive Summary

In 2007, the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) placed efforts to reduce emissions from deforestation and forest degradation in developing countries (REDD+) at the center of the international negotiations for a new global climate agreement. Three years later, the outcome of these negotiations remains uncertain, but political and stakeholder interest in REDD+ continues to be high. Developed countries have pledged approximately US$4.5 billion for REDD+ from 2010 to 2012 to support developing country capacity building, planning, and implementation. It is expected that these “interim” actions will encourage the learning, consensus building and trust necessary for an eventual international agreement.

Early experiments with interim REDD+ financing are already generating valuable lessons and experiences. However, a failure to coordinate a growing number of REDD+ donors and actors could jeopardize progress made thus far. Decisions on the allocation and use of interim financing have been ad hoc, fragmented and donor-driven. A plethora of bilateral and multilateral donors have emerged, each pursuing its own vision of REDD+ and operating in accordance with its own procedures, standards, and safeguards.

To date, REDD+ finance has focused on a relatively small subset of countries, raising the risk that large amounts of money driven by multiple donors could overwhelm the capacity of national institutions to manage resources effectively and efficiently, lead to duplicative or conflicting investments, and diminish the potential for these countries to mainstream REDD+ activities into national planning processes. If early investments in REDD+ do not deliver expected results or lead to an erosion of stakeholder confidence and trust, it will be more difficult to scale-up future financing and to maintain political momentum for an international agreement.

This working paper proposes several options for improved coordination at the national, bilateral and multilateral level. It also suggests potential roles that Parties to the UNFCCC, the Interim REDD+ Partnership, and the major multilateral REDD+ initiatives (the Forest Carbon Partnership Facility, the Forest Investment Program, and the UN-REDD Programme) can play in taking these options forward.

Overall, our analysis identifies a need to balance improvements coordination and coherence at the global level with the equal importance of promoting flexibility, experimentation and learning, and country-led approaches. More specifically, we recommend:

• Improving the quality and coordination of bilateral and multilateral support for REDD+ actions so as to be more responsive to countries’ demands.

• Focusing REDD+ financing on significant and sustained investments in national and subnational capacity to generate nationally driven demand for REDD+ finance, and to more effectively coordinate activities and support.

• Developing better performance metrics and monitoring systems that go beyond measuring emission reductions, to enable results-based support for capacity building and policy implementation.