Background

Increasing the flows of private finance to sustainable forest activities can provide significant opportunities for the environment, communities and economies.

To date, large-scale approaches to REDD+ and reduce emissions from forests have predominantly been supported through public funds. However, there is a growing interest and significant potential for investment from the private sector. Leveraging this investment can contribute to the long-term success of REDD+ by making it a mainstream institutional investment opportunity.

While private sector interest in sustainability investment is increasing, too few of these resources are flowing to the forest/REDD+ sector. A range of factors have inhibited this investment, including the difficulty of managing real and perceived risks, difficulties with reconciling local investments with jurisdictional priorities, and the lack of identifiable, viable and robust products that can be marketed to willing investors.

Recent signs are encouraging for the flow of climate finance to REDD+ activities. Large scale multilateral climate financiers such as the Green Climate Fund understand the importance of engaging the private sector in their decision making; and the International Civil Aviation Organization is grappling with how to incorporate forests in its market-based carbon offset mechanism. But the investment landscape is complex and confusing for many private actors, and work needs to be done to ease this process.

This session will investigate the current picture of private sector investment in REDD+, the motivations of the various actors, and the possible pathways for creating a step change in private sector investment in forest sustainability.

Objectives

The parallel discussion on the subtheme “Forest Finance, Investment and Trade” at the 3^rd Asia-Pacific Rainforest Summit (APRS) aims to:

1. Promote a frank exchange on the opportunities and challenges in attracting and scaling-up investment in REDD+ and sustainable land use practices in the Asia-Pacific
2. Improve understanding of the current state of play regarding climate finance and private sector investment in REDD+, and the critical role of governments in creating enabling environments
3. Map the motivations of different private sector actors in financing REDD+.
4. Identify pathways for scaling-up private sector engagement in reducing emissions from forests

Expected Outcomes

The expected outcomes of the “Forest Finance, Investment and Trade” discussions are to:

1. Improve understanding of the key elements required to create a step change in private sector investment in REDD+
2. Clarify the opportunities that will arise from the Green Climate Fund’s approach to mobilizing private sector investment in REDD+
3. Identify how we can bring the private actors along the journey of mainstreaming private sector investment in REDD+, including through mechanisms that will drive investment such as the Green Climate Fund and ICAO’s market-based carbon offsetting mechanism
4. Understand how existing investments in REDD+ can be scaled up

Agenda

•  Enabling private sector engagement for business-based peatlands restoration & REDD+
•  Encouraging private sectors in forestry to support REDD+ implementation
•  Sustainable commodities conservation mechanism (SCCM): Innovations in environmental finance
•  Towards sustainable financing in Indonesia: Policy initiative on environmental economic instrument
•  Green Climate Fund's approach to mobilizing private sector investment in REDD+
•  Finance tools for protecting forests
•  Towards Scalable, Innovative, Blended, Ecosystem Financing
•  The role of private sector in forest conservation & finance
•  Sustainable commodities conservation mechanism (SCCM): Innovations in environmental finance