WARSAW (Reuters) - U.N. negotiators on Friday agreed rules on financing forest projects in developing nations, paving the way for multi-billion dollar investments from governments, funding agencies and private firms in schemes to halt deforestation.
The agreement on “results-based” funding for Reducing Emissions from Deforestation and Forest Degradation (REDD) was a rare breakthrough at the climate talks in Warsaw, where negotiators are struggling to make progress in discussions on emissions cuts and climate change aid.
The deal was “another big step forward”, said Ed Davey, the British minister for energy and climate change.
Under the new rules, the fledgling Green Climate Fund will play a key role in channeling finance for projects to host governments, who in turn must set up national agencies to oversee the money.
Money will flow into host-country coffers when they can prove they have reduced carbon emissions without harming local communities or biological diversity.
Nations also agreed rules on how to measure and verify the emissions cuts from forest projects.
Deforestation has played an increasingly important role in climate negotiations, because the loss of forests accounts for nearly a fifth of global greenhouse gas emissions that scientists blame for global warming.
The Norwegian government has already paid out $1.4 billion in bilateral deals with nations such as Brazil, Democratic Republic of Congo, Guyana and Indonesia. The World Bank, the Global Environment Facility and a growing number of private-sector firms have also launched projects.
The governments of Britain, Norway and the United States earlier this week allocated $280 million to a World Bank-led fund operating REDD projects.
But a common set of rules for projects will provide regulatory certainty and draw more funds from investors, observers say.
“This sends a positive signal to national governments and to funding agencies,” said Rosalind Reeve, a forestry expert with the Ateneo School of Government.
The framework will be formally adopted along with other decisions at the Poland talks, which delegates expect will run over time and might not be concluded until Sunday morning.
Additional reporting by Susanna Twidale; editing by David Evans