Climate Action in the FOLU sector: challenges for an architecture of support fit for rapid action and higher ambition.

Objective: The purpose of the event is to provide a space to reflect on the technical, political and financing challenges of the current array of support mechanisms for climate action in the FOLU sector and how to move towards a more effective and “fit-for-purpose” architecture of support for higher ambition and scaled up action..

Primary thematic category: Means of implementation and support

Secondary thematic categories: Forests, Nature, and Systems transformation: Land.

Background

The Forest and Land Use sector plays a key role in achieving climate policy targets and it  is critical to understand ways to enhance current ongoing efforts to drive the FOLU sector’s potential as numerous mitigation pathways rely on this sector to achieve the Paris Agreement goal. The importance of protecting, conserving and restoring nature and ecosystems to achieve the Paris Agreement temperature goal, including through forests is widely recognized. Overall, the FOLU sector is a net sink. Recent studies indicate that to achieve overall carbon neutrality by 2050, substantial CO2 removals (CDR) will be needed in the sector to compensate for unavoidable emissions in other sectors (Roe et al., 2019; Griscom et al., 2017). 

However, there is evidence that land sinks will become less effective over time (Dow et al. 2022, Jiang et al. 2020, IPCC 2021) due to climate change, and land use competition (i.e. food security, deployment of renewables). It is therefore important to caution against excessive reliance on land sinks to slow down or avoid decarbonisation in other sectors.

Even though most countries have included the FOLU sector in their NDC, and most of them included REDD+ or nature-based solutions, very few provide detailed forest climate actions and link them to a financial instrument or a specific source of finance.  In 2019, Fyson et al., found that from 167 NDCs, 121 included the land sector, and only 11 of these included a quantifiable LULUCF target. That same year, Seddon et al 2019, found that around 66 per cent of NDCs include a form of nature-based solutions but lacked targets.

The Paris Agreement provides a new framework for all countries where each country defines its increasing national goals over time, and forest can be a critical element for many countries. The original notion of REDD+ as a relatively simple positive incentive mechanism to access predictable and adequate finance to enhance the role of forest in addressing mitigation has not materialized, with still  insufficient integration of efforts and limited financing. Instead, the support for REDD has translated in a multiplicity of financial instruments with a variety of requirements of increased stringency and complexity (FCPF, GCF, LEAF, REM, VCMIs) that are seen as preconditions to mobilize additional financing from other sectors. Unfortunately, this risks diluting the power of REDD+ as an incentive and makes it more difficult to communicate to policy-makers and stakeholders. Adding other dimensions such as biodiversity, water, etc risks increasing upstream finance requirements even more.

Instead, multilateral support needs to be better adapted to portfolios driven by national and local needs and circumstances as a way to make finance more accessible to support the national goals under the PA. In that process, we need to leverage broader non-climate finance in the FOLU sector and make climate finance more fungible. 

Result based payments and markets do not cover, and will not cover, the investment needed to achieve the implementation of forest goals. Carbon is only a small part of the equation but will not provide the investments needed in the FOLU sector. We still need a continuum on finance, readiness, investment and results based payments.   Results based payments, while being an important piece of the equation, need effective integration with other upfront financing mechanisms. Financial flows are needed  to help countries disrupt policies to achieve a cross sectoral approach. 

Justifying investments on forests around results has inadvertently led to excessive emphasis on accuracy and low uncertainty of monitoring and measurement, risking not only deflecting focus away from  actions to conserve forests and its environmental services. The balancing of Countries have focused on addressing the measurement of emission reductions, distracting from addressing the complexities of drivers of forest loss, e.g. addressing ag-forest nexus issues, energy-forest nexus, etc.

NDC Aspects project and FAO initiated a discussion with several international partners and REDD+ countries to consider the lessons learnt on access and further needs. There is an opportunity and a need to reflect differently on the value of forests. Balancing our view of emissions reductions in forests as a commodity with the broader role of nature as supportive elements of human livelihoods, serving more as insurance rather than a commodity. This will be increasingly important as we inevitably shift to address the increased vulnerability of forests and forest-dependent societies and economies from climate impacts which are threatening its expected mitigation potential.  

Moderator

María José Sanz / Scientific Director of the Basque Centre for Climate Change (BC3)

Speakers

• Mirey Atallah / Head of Nature for Climate Branch. UNEP
• Dirk Nemitz / Team lead AFOLU. UNFCCC
• Dr. Bapon Fakhruddin / Green Climate Fund
• Amy Duchelle / Team Leader of the Forests and Climate Change Team at at FAO
• Johannes Svensson / IDDRI
• Luis Guerra / Adaptation Specialist. Ministry of Environment and Sustainable Development/ Colombia
• Franky Zamzani / Deputy Director for Mitigation Action, DGCC, Ministry of Environment and Forestry / Indonesia