Accelerating climate impact for forested landscapes: 3 lessons from independent evaluations

As the urgency to combat climate change intensifies, the World Bank Group is stepping up its support for countries by leveraging innovative financing mechanisms for climate action. Two key initiatives in this effort are the Forest Carbon Partnership Facility (FCPF) and the BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL), which are vital components of the Bank's strategy to help countries reduce emissions and build sustainable landscapes, while delivering finance through payments for verified carbon credits. In 2023, recognizing the importance of continuous improvement and scaling of effective strategies, these two funds underwent independent evaluations to assess progress and extract valuable lessons for future climate finance initiatives.

In 2023, recognizing the importance of continuous improvement and scaling of effective strategies, the Forest Carbon Partnership Facility (FCPF) and the BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL) underwent independent evaluations to assess progress and extract valuable lessons for future climate finance initiatives.

Established in 2008 and 2013, respectively, the FCPF and ISFL are two of the world’s largest and longest-standing financing mechanisms for reducing emissions from deforestation and forest degradation (REDD+) and implementing broader agriculture, forestry, and other land use (AFOLU) initiatives in developing countries. These funds have assisted 49 countries to advance critical REDD+ building blocks and lay the foundations for piloting large-scale emission reduction programs across 20 countries, supported by over $1.6 billion in funding. FCPF countries have already reported over 90 million tons of carbon dioxide equivalent (tCO2e) emission reductions to date, while both programs have innovated new methods for measuring, verifying, and transacting credits to achieve sustainable forest landscapes.

These funds have assisted 49 countries to advance critical REDD+ building blocks and lay the foundations for piloting large-scale emission reduction programs across 20 countries, supported by over $1.6 billion in funding. 

The results of the independent evaluations were released in June 2024, and we are encouraged by what we learned. Across these two evaluations, we have distilled three key areas of learning for sustaining and evolving the work supported by these two funds. 

1. Addressing financing and capacity gaps: Generating high-integrity carbon credits requires significant upfront resources in both readiness and investment phases. Countries with limited financing can be assisted through flexible carbon pricing approaches and blending results-based payments with upfront investments and enhancing government capabilities for engaging in the carbon market. For programs to become firmly established and self-supporting, additional, and ongoing financial support may be required even once emission reductions programs are in place. Developing and incentivizing cross-sectoral and cross-scale coordination and cooperation for integrative AFOLU and sustainable land use approaches should also be a priority, involving relevant sectors from the start and decentralizing execution approaches with high-level support. Exploring alternative financing to respond to the specific needs of high forest, low deforestation countries is also important.
2. Inclusive engagement and benefit sharing: Meaningful stakeholder engagement, including with Indigenous peoples and local communities as critical partners, is necessary to ensure sustainable emission reductions programs with inclusive and impactful benefit sharing. Fair allocation of funds to both forest communities and government bodies is vital, as is balancing this with effective forest conservation programs and leveraging existing resource transfer systems. Giving voice to self-selected observers in global governance structures has also proven effective. It builds buy-in, fosters diverse viewpoints, and facilitates knowledge sharing. The private sector also plays a crucial role in scaling up climate-smart, sustainable land use. With FCPF and ISFL now generating carbon credits that could potentially be made available to private sector buyers, the funds are entering a new phase that could allow countries to mobilize private sector finance by leveraging carbon markets. 
3. Enhancing non-carbon benefits and strategic learning: A wide range of non-carbon benefits – such as benefits to livelihoods, biodiversity, climate change adaptation, land rights, gender, social inclusion, and governance – have been documented in FCPF and ISFL programs. These are crucial for effective and sustainable results. Clearer guidance is needed for identifying and monitoring these outcomes. Strategic studies, enhanced monitoring, evaluation and learning, and amplified knowledge-sharing and communications activities can also further improve current and future programs. 

Moving forward, these lessons will be applied to ongoing work within the FCPF and ISFL, as well as in the design and implementation of the World Bank’s new Scaling Climate Action by Lowering Emissions (SCALE) multi-donor trust fund, and the Enhancing Access to Benefits while Lowering Emissions (EnABLE) associated trust fund focused on ensuring social inclusion in SCALE-supported programs. These efforts are also a critical part of the World Bank’s comprehensive strategy to support countries in generating high-integrity carbon credits and leveraging carbon markets for sustainable development, as detailed in the World Bank’s Engagement Roadmap for Carbon Markets.

These constructive lessons underscore that we are on the right path and making real progress. They motivate us to further amplify and innovate solutions to advance sustainable livelihoods, forest protection and climate action with the scale and urgency that the climate crisis demands.