February 3-4, 2015
Ito Hall of University of Tokyo

REDD+ FINANCE MECHANISM AND ITS OPTIMUM USE

WRAP-UP
Mitsuo MATSUMOTO
Director of REDD Research and Development Center
Forestry and Forest Products Research Institute "FFPRI”

DAY 1 Session 1: Financial mechanisms to address
climate change• Global financial regime for climate change includes UNFCCC

and the Kyoto Protocol, and various other funds provided by
the World Bank, UN agencies, bilateral donors and others.
• In Lima, more than 10 billion USD was pledged to the Green

Climate Fund. Japan is a major contributor.
• Important challenges that now to be faced for financing up toand beyond 2020 include 1. how to mobilise private sector
financing, 2. how to utilise market mechanisms, 3. how to
disburse funds, 4. what the priority areas for funding are, and 5.
what is the process to decide these priorities.

Session 2 : Multilateral & bilateral finance for REDD+• REDD+ readiness and implementation is not a linear processes;

rather it is cyclical. A dynamic financing mix to reflect overlaps
between REDD+ phases and development of strategies isneeded.
• A large amount and diversity of funding will be required to change

the trajectory of countries on the forest transition curve. Thiscannot just be achieved through REDD+ financing. REDD+ needs
to leverage other types of public and private finance, which isoftentimes much larger than climate finance• REDD+ is one of the 4 strategic impact areas that the GCF has

adopted for mitigation. The relevance of REDD+ to the strategic
adaptation impact areas and other “co-benefits” is also
recognised.

Session 3 : Role of business & civil society• Bridging the current split between fund-based REDD+ andvoluntary market-based REDD is a key challenge.
Projects and subnational activities need to be nested in anational strategy and framework. Japan’s JCM could
potentially play a role in this bridging.
• Innovative ways to engage the private sector are required.
The current REDD+ business model is not attractive tothem. They could be engaged indirectly for REDD+
objectives through supply chain management, as well as
taxation and economic instruments under a landscapeapproach.

DAY2 Session 1: Current issues & questions• Forest protection should be more profitable than forest

conversion in REDD+ countries.
• While the original idea of REDD+ was to cover the cost offorest conservation, the reality was small amount offunding provided and decrease in contributions because of
weak forest carbon market (only 4 of 23 initiatives are
selling CC, 6 have ceased).
• Recent developments are: IFF (strategic intervention ),Green Climate Fund and so on but long-term financebeyond 2020 is needed.
• Rights are key to reduce deforestation.

Session 2 : Management & operation of related funds•Good governance practice according to strategic interventions engenders
trust by broad stakeholders and reduces risks of REDD+ projects in Ghana
but still robust legal measures for future cash inflows from REDD+ activities
are needed.
•In Indonesia, REDD+ Agency takes key roles in REDD+ activities supported
by multiple sources, and new arrangement including operation of FREDDI andfostering funding from Green Climate Fund should be urgently developed.
•In Mozambique, although the challenge on REDD+ was deforestation bypoverty, projects supported by private funds try to reduce deforestation by
incentivizing local farmers to change land use & sustainable forest use.
•By means of DNS (a financial transaction where debt is forgiven in exchange
for local investments in environmental conservation measures by the debtor),
NGOs help establish conservation investment priorities, hand it strengthens
the relationship between the government and local environmental NGOs.

Session 3: National financial systems –PES•REDD+ may be difficult for small countries, but PES with good
governance, policy, robust monitoring mechanism works toreduce deforestation in Costa Rica.
•For incentive of carbon credit, a community based organization(stakeholders participate) has been set up for taking
responsibility and benefit sharing in Indonesia.
•Payment for Forest Environmental Services (PFES) in Viet Nam
promotes positive economic, environmental and social impacts
on the society and a lesson learnt was political will, legal
frameworks and strong commitment from governments at alllevels.

Session 4 : General discussion
1.

How can national and sub-national policies link tointernational REDD+ finance?

2.

What are policies and mechanisms for effective
utilization of REDD+ finance?

3.

Is there any evidence that benefit sharing is alreadytaking place?

4.

What kind of mechanisms should be in place for
effective benefit sharing?

5.

How can community participation and genderissues be considered?