A Gigaton REDD+ Bid Strategy
Unlocking the potential for REDD+ in supporting the protection of rainforests and other “natural climate solutions” in tropical forest countriesBy Rupert Edwards View Publication
A massive increase in public and private results-based funding commitments is critical to protect tropical rainforests and other “natural climate solutions” in tropical forest countries, and thus to hopes of holding global warming below 2°C. REDD+ programs, that avoid and reverse the loss of tropical forests, can contribute trillions of dollars in value by “flattening the curve” of the global economy’s costs of transition to climate stability.
Donor governments and multilateral institutions, making payments as a form of output-based aid, are in a position today to leverage materially more private co-funding for REDD+ than has been the case historically. Corporate focus on transitioning to a net-zero carbon world is moving very rapidly under pressure from policy, financial regulators, investors, consumers, and market forces. A range of private actors needs access to large-scale, affordable, and near-term mitigation options from offsets that provide a more flexible pathway for technology investment and de-carbonization. This is especially true for “hard-to-abate” sectors. Jurisdictional (e.g., national, state, or province-level) REDD+ has by far the largest potential to supply offsets at scale. New sources of private funding could vastly increase over the next few years, provided jurisdictional REDD+ demand and supply can demonstrate the ability to scale from current levels.
We are at an inflection point where as-yet unfulfilled supply potential could be mobilized by a quantum increase on the demand side. We recommend that a coalition of donor governments secure co-funding from a range of private actors for a “Gigaton REDD+ Bid” with a value of at least US$10 billion, in order to unlock supply of jurisdictional REDD+ credits. Success in delivering 1 billion tons of emissions reductions would in turn catalyze further even larger-scale private and public funding commitments. At a macroeconomic level, the success of NCS and of REDD+ is critical to preventing carbon prices from escalating rapidly, thus reducing political ambition when emission reduction policies need to be tightened. Moreover, at the company level, the ability of the hard-to-abate sectors to meet ambitious net zero carbon targets looks extremely challenging in the absence of a transformational increase on the supply side for offsets.
We set out options for developing the “Gigaton REDD+ Bid.”