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Bridging Financing Gaps

By Sarah Lowery, David Tepper, Rupert Edwards
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The amount of capital deployed through REDD+ is just a small percentage of what is needed. Reducing Emissions from Deforestation and forest Degradation by 50 percent will require between $17 and $33 billion per year, but only $4.5 billion was deployed for REDD+ was through 2012. And forest carbon markets’ value was estimated at USD 216 million in 2012.

In contrast, financial flows to the agriculture sector are quite large: average annual investment by domestic private sector actors (i.e., farmers) into just a portion of low- and middle-income countries is $168 billion, and government expenditures on agriculture in a subsection of these countries is $160 billion. These figures are much closer to the estimated $209 billion annual investment in agriculture in developing countries that is required to meet projected demand in 2050 and represents substantial pools of capital that can potentially be unlocked to support sustainable supply chains.