Action

Evaluating REDD+ alignment of private finance

Year
2021 – 2022
Location
Ecuador

Budget
EUR 80 000
Funded by
EU REDD Facility, PROAmazonia, Ministry of the Environment, Water and Ecological Transition

Partners
Ministry of the Environment, Water and Ecological Transition (MAAE), PROAmazonia, NDC Partnership

Introduction

Ecuador’s political will to combat climate change and reduce emissions from the forestry sector has positioned it as a pioneering country in the implementation of REDD+ measures and actions, in relation to both the forestry and non-forestry sectors. In fact, it is the second country in the world, after Brazil, to meet all the requirements for receiving results-based payments for REDD+, set out under the United Nations Framework Convention on Climate Change (UNFCCC). It was also the first to present its national Forest Reference Emission Level for Deforestation. Furthermore, it is developing a public policy framework to mitigate and adapt to climate change:

The National Climate Change Strategy for 2012–2025
The REDD+ Action Plan (2016–2025)
Its first Nationally Determined Contribution (NDC), submitted to the UNFCCC in 2019

Funding from public and private national and international sources is crucial to meet the national climate and land-use mitigation targets under the Paris Agreement. In this regard, the Government of Ecuador recently formalised the National Climate Finance Strategy 2021–2030, which establishes targets, strategic guidelines, enabling conditions and lines of action that should be implemented to accelerate the mobilisation of climate finance (MAAE, 2021).

The objective

Ecuador is coordinating national efforts to reduce deforestation and forest degradation through its REDD+ Action Plan: Forests for Good Living (2016–2025). This plan outlines actions that are consistent with the National Climate Change Strategy and UNFCCC decisions. Understanding the current panorama of land-use finance and how different private finance flows positively or negatively impact forests is an opportunity for national and international actors to increase investment aligned with REDD+.

Thus, the main objective of the mapping carried out with the support of the EU REDD Facility is to identify and measure the impact and alignment of private finance with REDD+ objectives and the REDD+ National Action Plan.

Mapping private land-use finance in Ecuador will help to:

Provide a baseline for monitoring private finance that is aligned or non-aligned with REDD+ objectives
Measure flows of private investment that are potentially driving unsustainable actions and contributing to deforestation
Report on progress in forest and climate objectives by analysing the mobilisation of REDD+-aligned resources
Help identify opportunities to increase financial support for the implementation of actions

Cocoa plantation located in the Guayas Province, Ecuador.

The approach

Ecuador is carrying out a series of initiatives to map private climate finance, using the Private Sector Climate Expenditure and Institutional Review methodology.

To complement those initiatives, in 2021, the EU REDD Facility conducted, using its Land-use Finance Tool approach, an evaluation of the feasibility of mapping private land-use finance in Ecuador. The mapping covered the land use, land-use change and forestry (LULUCF) sector. This evaluation made it possible to define the scope of the finance mapping and generate an implementation plan. The plan includes the development of a methodology to collect information on private land-use finance, as well as a stakeholder engagement strategy to support the study and ensure access to the data (at the national level).

Mapping of land-use finance in Ecuador

Objective
Identify and measure the impact of private finance for the implementation of REDD+ actions on progress in meeting national forest and climate objectives.
Key policy framework
Ecuador’s REDD+ Action Plan ‘Bosques para el Buen Vivir’ (‘Forests for Good Living”)
Year
2019 – 2021
Geographical scope
National

Types of finance
- Aligned (green) flows
- Conditional (grey) flows
- Unaligned (brown) flows
Sectors
- Farming
- Forestry
- Mining
Main sources of data
- National private actors
- International private actors
Markets and instruments
- Production market
- Debt market
- Land market

Next steps

The implementation phase of the methodology developed in 2021 is underway and the mapping is due to be completed in time for UN Climate Change Conference 2022 (COP27). This phase is being co-financed and carried out in close collaboration with PROAmazonia and the Ministry of the Environment, Water and Ecological Transition.

Resources

Proposed Implementation Plan for the mapping of land-use finance in Ecuador

About the EU REDD Facility

The EU REDD Facility supports countries in improving land-use governance as part of their efforts to slow, halt and reverse deforestation. It also supports the overall EU effort to reduce its contribution to deforestation in developing countries. The Facility focuses on countries that are engaged in REDD+, an international mechanism that incentivises developing countries to reduce greenhouse gas emissions from their forest and land-use sectors. The Facility is hosted by the European Forest Institute and was established in 2010.

Disclaimer

This website has been produced with the assistance of the European Union and the Governments Germany, Ireland and the Netherlands. The contents of this site are the sole responsibility of the European Forest Institute’s EU REDD Facility and can under no circumstances be regarded as reflecting the position of funding organisations.