Forest Carbon Partnership Facility (FCPF)

The Forest Carbon Partnership Facility (FCPF) was founded in December 2007 and is under the authority of the World Bank.

Objectives

The FCPF aims to support tropical and subtropical developing countries reduce emissions caused by deforestation and forest degradation. The FCPF is focused on the idea of preparing countries under the concept of REDD+ (Reducing Emissions from Deforestation and Forest Degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries) for mechanisms that make REDD+ activities financially attractive, such as future carbon markets.

Decisions at the FCPF are made by the Participants Committee and Assembly, in which developing and developed countries participate have an equal representation. Various civil society, indigenous and women’s organizations have an observer status.

Key developments

The FCPF operates two funds, both of which run until 2025:

  • The FCPF’s Readiness Fund aims to prepare participating developing countries for future REDD+ activities, such as through the preparation of national forest conservation plans or systems to collect climate assessments of potential forest conservation activities. The Readiness Fund provides grants to applicants.
  • The FCPF’s Carbon Fund is intended to finance pilot programs for results-based forest conservation activities after countries have gone through the readiness phase. The Carbon Fund makes results-based payments, which must be agreed upon through Emission Reductions Payment Agreements (ERPAs)

The FCPF has been repeatedly criticized for its lack of concrete results for forest protection. For example, ERPAs have so far only been agreed in Ghana (up to US$50 million), the Democratic Republic of Congo (DRC) (up to US$55 million) and Indonesia (up to US$110 million). The Republic of Congo and Mozambique are still in preparatory phases. In Peru, the FCPF program was discontinued in February 2021.

In addition, the FCPF has been criticized by civil society organizations for methodological shortcomings and intransparent implementation, not least in the measures designed to prepare for results-based REDD payments.

Funding volume and Germany’s contribution

The FCPF has mobilized $1.3 billion. The Readiness Fund ($465 million) operates in 47 countries and the Carbon Fund ($870 million) in 18 countries. In addition, FCPF has a capacity development program of US$15 million. By the end of 2020, the Readiness Fund has allocated $314.3 million and disbursed $247.6 million, while only $42 million have been disbursed by the Carbon Fund.

Apart from the 15 donor countries, funding also comes from private actors. There is one private sector actor (BP Technology Ventures) and one civil society organization (The Nature Conservancy) which have contributed to the FCPF. From 2009 to 2020, Germany has pledged €160.4 million to the FCPF and thus is the second largest donor after Norway (as of July 2021).

 

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