The Amazon rainforest. Photo by Rhett A. Butler
Conservationists are renewing a push for a special class of ‘rainforest bonds’ to fund efforts to conserve tropical forests.
WWF, the Global Canopy Programme (GCP) and the Climate Bonds Initiative (CBI) will on Monday issue a report arguing that forest bonds could mobilize private-sector money to augment public sector finance needed to the early stages of the REDD+ program, which aims to reduce greenhouse gas emissions from deforestation and forest degradation.
Forest bonds issued by forest countries would be sold to investors to provide up-front capital for REDD+ activities. According to the report, revenue to repay the bonds could come from environmental taxes, reduced impact logging, and payments for ecosystem services — including carbon sequestration and watershed services.
“Forest bonds may be a promising way to close that short-term gap in financing so our forests don’t slip away while we sort out how we’re going to fund their long-term conservation,” said Don Kanak, the Chairman of Prudential Corporation Asia, who also serves as an advisor to WWF’s Forest and Climate Initiative, in a statement.
“Forest bonds are a tool for countries, multi-lateral development banks, and private financial institutions to tap into the international bond market that is worth nearly 100 trillion USD,” added Sean Kidney, Chair of the Climate Bonds Initiative.
The report is the product of a February workshop which discussed the promise and challenges of forest bonds. Supporters of the scheme hope to have it on the agenda for climate talks in Panama in October and South Africa in December.
Rainforest bonds were popularized by Prince Charles’ Rainforest Project in 2009.
Economists estimate that halving tropical deforestation by 2020 could cost $15-30 billion per year.