Stimulating Interim Demand for REDD+ Emission Reductions: The Need for a Strategic Intervention from 2015 to 2020

This analytical report proposes strategic actions to scale-up public and private sector demand for REDD+ investments over a five-year period. The report seeks to address the current gap between supply and demand, which is resulting in early movers providing significantly less financing than current project proposals could consume. The report notes that the fast start finance (FSF) period (2010-2012), agreed by parties to the UN Framework Convention on Climate Change (UNFCCC) in 2009, resulted in pledges of US$4.5 billion. However, it stresses that these pledges need to be scaled-up to meet the expected costs of between US$4 and 48 billion in the interim period (the period between FSF and long-term finance, which will start in 2020). In order to achieve such financing, the report calls for the establishment of a performance-based financial incentive with clear price signals must in order to reduce REDD+ financing risks. Furthermore, it stresses that a strategic intervention to stimulate demand is necessary and should build on existing institutions, mechanisms and funds.