Potentials for "results-based payments" in the forest sector under the Paris Agreement: Final report

This report examines how, and under which circumstances different forms of financing are suitable for results- or transfer-based mechanisms for reducing emissions from deforestation and forest degradation as well as enhancing removals in forests (REDD+) in the context of different countries and measures. The approach of results-based payments is an important element of REDD+. Compared to unconditional finance approaches it delivers finance upon the achievement emission reductions or removals.

The report provides a typology of REDD+ finance mechanisms by elaborating differences between activity-, results- and transfer-based finance. We analyse 13 specific REDD+ finance mechanisms with regard to a range of criteria (e.g. general characteristics, financial governance, monitoring and quantification provisions). The report also explores which requirements arise from Article 6 and the common practice of market-based approaches for financing REDD+. This is followed by an assessment of the potential for REDD+ financing under different assumptions. To assess how the approaches work in practice, the report discusses REDD+ financing in the context of five case countries: Indonesia, Ethiopia, Peru, Vietnam and Democratic Republic of Congo. Against this background, we assess the suitability of REDD+ financing mechanisms for specific country situations. Finally, we draw overall conclusions and formulate recommendations for actions and constraints on the use of different forms of REDD+ financing.