UK-Funded Lab Seeks Financial Instrument Proposals for High Integrity Forests

The UK's Department for Energy Security and Net Zero is funding Climate Policy Initiative's Global Innovation Lab for Climate Finance to develop one dedicated financial instrument for high integrity tropical forests in 2024. Submissions for proposals are open through 27 December 2023, with the selected instrument to be endorsed and launched by September 2024.

High integrity forests, concentrated in the Amazon Biome, Congo Basin, and Southeast Asia, store and sequester carbon at rates critical to meeting global net-zero targets. Traditional REDD+ finance has not reached these areas because their historically low deforestation rates make establishing additionality baselines difficult. The new Lab window addresses this gap by providing technical assistance, expert stress-testing, and investor access to a single selected instrument. Existing pilots such as the UK-funded Biocredit Investment Operations programme in Zambia and Uganda and the Sustainable Commodities Conservation Mechanism in Southeast Asia offer reference models.

The Lab specifically calls for designs that incorporate Indigenous Peoples and Local Communities, who currently receive less than 1% of global climate finance despite managing over one-third of formally protected land. Only 17% of climate and conservation funding intended for IPLCs actually reaches them, a disparity the new window aims to address. The Lab notes that real and perceived risks, small ticket sizes, and limited local financial markets have historically discouraged private investors from these forests, creating an opening for innovative de-risking structures.

The selected instrument will receive capacity building through an expert working group of Lab members and the opportunity to pitch to investors at the Lab's annual Endorsement event in September 2024. CPI's prior work interviewing experts from 26 institutions informs the new window's design. Organisations wishing to provide expert input through working groups are also invited to engage. The Lab webinar on the 2024 call covers the application process, selection criteria, and benefits of Lab support in detail.

Key figure — Less than 1% of climate finance reaches IPLCs