Demystifying forest finance

About the workshop

Forests play a critical role in stabilizing the global climate, as they absorb nearly 30% of carbon dioxide emissions. During the recent UN Climate Change Conference (COP26) in Glasgow, leaders from 105 countries, together accounting for 85% of the world’s forested area, signed a landmark declaration to end deforestation by 2030. This declaration is backed by $12 billion in financial commitments from 12 governments and $7 billion from private companies, including $1.7 billion dedicated to indigenous communities and locals involved in conservation. In addition, more than 30 private sector companies have also pledged to stop investing in activities linked to deforestation. Forest finance for climate action will take the form of result-based payments, where payments will be made per ton of carbon sequestered or removed. With the UN Decade on Ecosystem Restoration 2021-2030, there is a renewed momentum to support developing countries for landscape restoration, with carbon finance as an instrument to finance the forest restoration efforts.

This workshop aims to demonstrate how carbon finance is mobilized to address deforestation and forest degradation in the forestry sector. We will be showcasing the first two recorded presentations from the United Nations Climate Change Conference in Glasgow (COP26), which will set the stage for financing forests, while the subsequent presentations will share examples of ongoing carbon-financed projects. This is expected to demystify the knowledge on carbon finance and its links with landscape management, enhance understanding of mobilizing finance for sustainable landscape management, highlight examples of different carbon-financed landscape-managed projects, provide clarity on the compliance process, and unlock opportunities from post-COP26 forest finance for the Hindu Kush Himalaya (HKH) member countries to access this finance for increasing investments in forests and landscape.

Expected outcome

The discussions are expected to improve overall understanding of climate finance for the forestry sector, the compliance process, and current financing mechanisms to unlock the potential of carbon finance for the HKH. Now that COP26 has pledged financing to end deforestation by 2030, this workshop will provide a platform to re-purpose climate finance for restoring forests and biodiversity and helping forest-dependent communities become more climate-resilient.

Background

The HKH region harbours a wide range of biodiversity and ecosystems, which provide essential services to over 240 million people living in the hills and mountains and over 1.65 billion people in the river basins downstream. However, socioeconomic and environmental changes at global and regional scales threaten to jeopardize the lives and livelihoods of people across the region. The transboundary landscapes approach can help tackle these shared challenges. ICIMOD has been working on transboundary landscapes for over 30 years with an aim of promoting sustainable landscape management and sustaining ecosystem services generated from mountain landscapes. However, managing landscapes is resource-intensive, especially when not all ecosystem services can be valued and marketed.

For the last 15 years, we have been working on supporting our regional member countries on being REDD+ ready. Through the REDD+ Himalaya Programme we extended support for developing national REDD+ strategy in India and Nepal; forest reference levels in Nepal; sub-national/state level REDD+ action plans in India, Nepal, and Myanmar; and national forest inventory with carbon accounting for Bhutan. These countries are now making a transition to the implementation phase of REDD+.

Agenda