An Introduction to the Forest Investment Review

The Forest Investment Review was commissioned by DFID and DECC to explore how best to stimulate private sector investment alongside public money to reduce deforestation in the developing forest nations. Specifically, it examines ways of achieving this through public policy, and public-private collaboration.

Forum for the Future convened a team of experts in finance and forests to assess the different areas where private sector finance could be mobilised, and they have contributed chapters to this report. The team has benefited greatly from the ongoing work of others in this complex area, including the Prince’s Rainforest Project and Project Catalyst. We hope that this report adds a further useful dimension to the discussions.

This introductory chapter sets the findings of the Forest Investment Review in context and summarises the individual chapters. It outlines why reduced emissions from deforestation and degradation (REDD), together with other activities to enhance forests through afforestation, reforestation and sustainable forest management (REDD+) are so critical in the fight against climate change. It then explores the need for public and private sector finance in achieving REDD+, considers how appropriate private sector investment could be mobilised, and assesses the potential contribution it could make. Finally, it recommends actions for the government to take to support appropriate private sector activity in pursuit of REDD+.

The REDD+ finance being considered in this report is not predicated on the emergence of a fully functioning forestry carbon market. Rather, it looks at the finance that could be available in advance of that market emerging. The ‘private sector’ encompasses a wide range of international and local participants, including institutional investors such as pension funds and insurance companies; large, medium-sized and small companies; communities; and individuals.