Finance

The logic of results-based payments determines that developing countries should be rewarded for the mitigation results achieved in the implementation of REDD+ actions and policies, after these results have been fully measured, reported and verified (MRV) under the United Nations Framework Convention on Climate Change (UNFCCC).

The decisions by the Conference of the Parties to the UNFCCC (COP) emphasize the need to make resources available for REDD+ results based-payments. These funds should be new, additional and predictable, and may come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources. Grants from developed countries and multilateral funds to developing countries as REDD+ results-based payments are accounted for as part of their climate finance commitments under UNFCCC.

The decisions also assign a key role to the Green Climate Fund (GCF) in REDD+ finance. The GCF shall channel resources in a fair and balanced manner for results-based payments. The GCF is currently developing the methodology and the necessary internal processes to operationalize REDD+ payments to developing countries.

Brazil has already received[1], via the Amazon Fund, US$ 1,212,378,452.36 in results-based payments from the Norwegian Government and US$ 68,143,672.60 from the German Government. In addition to that, the Amazon Fund received US$ 7,713,253.30 in results-based payments from Petrobras.

In 2015, the governments of Norway, Germany and the United Kingdom made a joint commitment to invest US$ 5 billion globally in REDD+ by 2020. There is expectation that other developed countries may also contribute in the coming years, which will be essential for developing countries to produce mitigation results in the forest sector compatible with the pre-2020 ambitions and the targets set by the Paris Agreement (post-2020).

Brazil already has bilateral agreements with the governments of Norway and Germany for REDD+ results-based payments to the Amazon Fund. The Norwegians have pledged to transfer US$ 600 million, while the Germans have pledged to transfer EUR€ 100 million, in addition to a technical cooperation agreement signed with the latter. Both agreements are valid up to 2020.

[1] Payments received up to September, 2019.