Private sector needs quick decision on REDD finance
Time is running out for key decisions on the financing of projects that reduce emissions from deforestation and forest degradation (REDD), said Abyd Karmali, global head of carbon emissions at Bank of America Merrill Lynch.
This week’s UN climate change meeting in Durban must decide if private capital and market mechanisms have a role in financing REDD projects, he told the Global Business of Biodiversity conference in London on Monday. “Private capital will be deterred if we don’t see significant progress soon,” he warned.
The Green Climate Fund, which is intended to channel funding from the industrialised world to developing countries for climate change mitigation and adaptation, could act as a fast-start mechanism for REDD and help bring together public and private finance, he suggested.
Other approaches to encourage private capital to REDD projects are currently being considered by the UK government, noted Chris Knight, assistant director, sustainability and climate change, at consultancy firm PwC. They include bilateral programmes to complement existing multilateral initiatives, and the possibility of a ‘flexible finance facility’ that could provide support – either as direct finance or guarantees – to projects put forward by NGOs or the private sector.
Countering suggestions from other speakers that REDD was “dead”, Knight stressed the progress that had been made since 2007. Around 37 REDD projects have been started, and 20 countries have ‘REDD readiness’ plans, he noted. Some $4.5 billion in public sector finance has been allocated to the sector and around $500 million is available from the private sector, he added. “An imperfect REDD is better that no REDD at all,” he concluded.