Features & Commentary
UNEP-FI Launches New Study Stressing Financial Sector Involvement in REDD+
Financial leaders call for an investor-friendly forest-carbon market at a recent event to launch UNEP's Finance Initiative (UNEP FI) study entitled, "REDDy – Set – Grow: Opportunities and roles of financial institutions in forest-carbon markets".
By: Sebastien Malo and Jessica Boucher
|Over 200 participants, including a range of stakeholders from the financial sector, government and civil society organizations attended the launch of UNEP FI's report at the Bank of America Merrill Lynch’s European headquarters in London.
Credits: Andrzej de Virion
Leading financial institutions and government representatives discussed the importance of their various roles in mitigating climate change as they called for more effective forest-carbon regulations on the occasion of UNEP FI's recent report launch at the Bank of America Merrill Lynch’s European headquarters in London on 6 May 2011.
Over 200 participants, including a range of stakeholders from the financial sector, government and civil society organizations, welcomed the findings of the new study, REDDy – Set – Grow: Opportunities and roles of financial institutions in forest-carbon markets, which stresses that the financial sector must step up its engagement in REDD+.
Previous research has established that a 50 per cent reduction in deforestation is needed by 2030 if the forestry sector is to support global efforts aimed at holding the global temperature rise to below 2 degrees Celsius, the global climate target the world’s governments have set themselves in the international climate change agreements of the United Nations Framework Convention on Climate Change (UNFCCC). Achieving this reduction will require investment previously estimated at US$17-$33 billion per year, according to UNEP.
“The market for forest carbon has significant potential but will require concerted efforts in the design phase by policy-makers to ensure that it attracts flows of private capital. Because of the ability for sustainable forestry projects to deliver not just carbon but also biodiversity and community benefits, financial institutions stand ready to work with governments to help ensure the full potential is realized,” said Abyd Karmali, Managing Director and Global Head of Carbon Markets at the Bank of America Merrill Lynch.
The commitment of the private sector and financial institutions toward the implementation of REDD+ is crucial, the UNEP FI study says, since the overall investment needed for implementation of REDD+ activities exceeds public capabilities and will thus largely hinge on action from the private sector.
The report stresses how private sector participation in REDD+ and deforestation activities can lead to a win-win scenario for the finance sector and governments, since such projects can translate into both lucrative investment opportunities and cost-effective strategies to abate carbon emissions and protect biodiversity and livelihoods.
Finance sector attendees at the event saluted the report as the first step in a critical learning process that will not only sharpen their competitive edge, but also boost their role in shaping tomorrow’s green economy.
|UNEP FI's new report, "REDDy –Set – Grow", stressing the importance of financial sector involvement in REDD+.
Credit: Andrzej de Virion
“It is unwise in this day and age for companies that wish to remain competitive to turn a blind eye to emerging green markets such as the forest-carbon market. This is a rationale that makes sense from a sustainability perspective, but also from a profitability one,” said Richard Burrett, partner at Earth Capital Partners LLP and Co-chair of UNEP FI.
A follow-up report - REDDy – Set – Grow: Part II - specifically geared for policy-makers and containing recommendations on the design of forest-carbon policies, will be released in June.
This two-part series marks the beginning of UNEP FI's work on engaging with the private sector on REDD+. In collaboration with the UN-REDD Programme, UNEP FI hopes to deliver guidance, including the promotion of environmentally and socially responsible investments and case-based templates and arguments to support the engagement of the private sector effectively and efficiently in REDD+. In addition, the UN-REDD Programme will continue to engage with the private sector to provide information on environmental and social safeguards and emphasize the importance of the rights and engagement of local and Indigenous Peoples.
A short video summarizing key elements of the press conference and panel sessions will be posted on the UNEP FI website soon. UNEP FI will also be hosting a unique cross-cutting session on REDD+ at their biennial Global Roundtable in Washington DC 19-20 October 2011, keynote speaker Yvo de Boer, former Executive Secretary of the UNFCCC (TBC). Registration is now open.
|Sebastien Malo is Communications Officer, and Jessica Boucher is a Programme Coordinator for UNEP FI in Geneva.