Unlocking Forest Finance (UFF)

Project partners

• Global Canopy Programme (UK) (coordinator)
  
• World Wide Fund for Nature (WWF – UK)
  
• Climate Bonds Initiative (CBI – UK)
• Vivid Economics (UK)
• Companhia de Desenvolvimento de Serviços Ambientais (CDSA – Brazil)
• Amazon Environmental Research Institute (IPAM – Brazil)
• Centro de Desarrollo e Investigación de la Selva Alta (CEDISA – Peru)
• National Agricultural University of La Molina (UNALM – Peru)
• International Institute for Sustainability (IIS – Brazil)
• The International Institute for Applied Systems Analysis (IIASA – Austria)
  
• The National Institute for Space Research – Centre for Earth Systems Science (INPE-CCST – Brazil)

Short summary

Native tropical forest is rapidly being converted to agricultural land, driven by global demand for commodities such as beef, palm oil and timber and by the short term financial case for this transformation. Halting this process requires considerable investment in sustainable supply chains, in the conservation of natural capital and in the sustainable development of forest-dependent communities. Historically, however, investment in each of these areas has tended to occur in isolation. In addition, compensatory payments intended to cover the additional cost of more forest friendly production practices and measures, anticipated via an international carbon-based scheme, remain elusive. The Unlocking Forest Finance (UFF) project aims to catalyse the creation of financial mechanisms, operating at the scale of subnational regions (e.g. states), to stop the conversion of tropical forest to produce commodities, and to transition towards sustainable modes of development. These mechanisms would incorporate supply chain, conservation and livelihood considerations in an integrated way, and would have the capacity to generate the required scale of investment by using public funds to leverage private capital. They would channel investment towards a range of qualifying activities e.g. projects that alleviate the pressure to deforest, restore degraded land, promote more sustainable management systems, conserve forests and improve rural livelihoods. The UFF project is working in three case study areas in which regional governments are actively pursuing innovative mechanisms that aim to slow deforestation and protect surrounding ecosystems. These regions are: Acre, Brazil; Mato Grasso, Brazil; and San Martín, Peru.

Role of UFZ

Conceptual support with ecosystem service assessments and valuation
Social and environmental safeguarding
Help ensure that the UFF project and the financial mechanism make sense from a social and ecological perspective.
Assess relevant concerns and risks and provide guidance for addressing and mitigating them in the project activities, including by agricultural production standards, impact estimations, no-go criteria, etc.

Publications

Rode, J., Pinzon, A., Stabile, M., Pirker, J., Bauch, S., Iribarrem, A., Sammon, P., Llerena, C., Muniz Alves, L., Orihuela, C., Wittmer, H. (2019), Why ‘blended finance’ could help transitions to sustainable landscapes: Lessons from the Unlocking Forest Finance project, Ecosystem Services 37, 100917.

Rode, J., Wittmer, H., Bausch, L., Aicher, C. (2017), A safeguarding framework for the Unlocking Forest Finance (UFF) project and its financial mechanisms, UFF Project Report, Helmholtz-Center for Environmental Research (UFZ) and Global Canopy Programme.

Rode, J., Eggert, H. (2016), Principles and Criteria for Sustainable Cattle Production in Brazil, UFF Project Report, Helmholtz-Center for Environmental Research (UFZ) and Global Canopy Programme.

Bausch, L., Rode, J. (2015), Guidelines for estimating social impacts of the UFF transition activities, UFF Project Report, Helmholtz-Center for Environmental Research (UFZ) and Global Canopy Programme.

Rode, J., Favero, C. (2015), Green bond certification and the implications for agricultural production standards, UFF Project Report, Helmholtz-Center for Environmental Research (UFZ) and Global Canopy Programme.