The FAO and Global Mechanism of the UNCCD (2015) identified sources of finance for FLR initiatives. The main sources are as follows.
Climate finance: Several instruments have been developed to finance action on climate change. Examples include the Clean Development Mechanism, REDD+ finance (Question 10), the Green Climate Fund, the Adaptation Fund, the World Bank’s Forest Investment Program and national climate funds.
Development banks and international agencies: These agencies provide grants and zero- or low-interest loans to developing countries. Major donors include World Bank Group, European Commission, Asian Development Bank, French Development Agency, Japan International Cooperation Agency, KfW Development Bank and the United States Agency for International Development.
Environmental funds: These funds vary greatly in terms of the amount and sources of funding. The Global Environment Facility, funded by various countries, is among the largest. Public-private partnerships such as the Land Degradation Neutrality Fund are another important source. National funds, such as Viet Nam’s Forest Protection and Development Fund, channel finance to districts and provinces.
International non-governmental organizations: International organizations that support FLR work by national and local CSOs include: World Resources Institute and its Global Restoration Initiative; Conservation International and its Global Conservation Fund; International Union for Conservation of Nature; World Wide Fund for Nature; The Nature Conservancy; and Collaborative Forest Landscape Coalition.
National budgets and resources: Few countries have explicit FLR budgets. However, certain public expenditure can be associated with FLR. Examples include land tenure clarification; land conversion restriction; benefit sharing; public participation and safeguard policies; FLR awareness raising; emissions trading; payment for ecosystem services; and green certification.
Private sector engagement: Significant funding potential from the private sector remains untapped. Private investors seek different kinds of returns, including sustainability through corporate social responsibility; financial from traditional investors; or mixed sustainability-financial returns from impact investors. They can be local, national or multinational companies.
Other non-traditional or innovative funding: Examples include citizen-based initiatives, such as crowdfunding and green bank cards, that direct a percentage of customers’ spending to fund environmental initiatives.