Demystifying Forest BondsAssessing the Suitability of Bonds as a Financing Instrument to Meet Forest-Based NDC Targets

Forests have been receiving increased attention over the past few years, particularly through international climate change negotiations and efforts to develop a mechanism for reducing emissions from deforestation and forest degradation. In many forest-rich countries, the implementation of the recently declared COP21 INDC1 targets builds significantly on greenhouse gas (GHG) emission reductions and emission avoidance related to forests. Most of these countries will require considerable new investments in forestry that can be realized only through an increased level of financing over the next few years. Given the scale of the financing requirements, prevailing macroeconomic conditions, and fiscal constraints, it is unlikely that these countries will be able to fund these programs alone