Financing Sustainable Small-Scale Forestry: Lessons from Developing National Forest Financing Strategies in Latin America

Abstract: The problems that hamper the financing of sustainable forest management (SFM) are manifold and complex. However, forestry is also facing unprecedented opportunities. The multiple functions and values of forests are increasingly recognized as part of the solution to pressing global issues (e.g., climate change, energy scarcity, poverty, environmental degradation, biodiversity loss and raw material supply). Emerging initiatives to enhance forest carbon stocks and cut greenhouse gas emissions associated with forest clearing (known as REDD+), together with voluntary carbon markets, are offering additional funding options for SFM. Indigenous peoples, local communities and small scale farmers feature as key players in the discourse on implementing such initiatives. Based on the experience of countries developing national forest financing strategies and instruments, we suggest the following points be considered when financing such initiatives, particularly for small scale forestry: (1) Integrate financing of REDD+ and similar initiatives within broader national strategies for SFM financing; (2) Design REDD+ finance mechanisms that are ‘community ready’, i.e., tailored to local realities; (3) Consider existing livelihood strategies as the starting point; (4) Build on existing structures, but be mindful of their strengths and weaknesses; (5) Be strategic with your priority actions; and (6) Promote innovation, knowledge sharing and information exchange.