How the Green Climate Fund Could Promote REDD+ through a Cash on Delivery Instrument: Issues and Options

January 07, 2016

Climate change will have profound effects on development, poverty, health, and well-being in coming years. Rejuvenated by the recent Paris agreements, efforts to channel the international funding commitments need channels for cost-effective mitigation. The Green Climate Fund (GCF) represents the best current opportunity to address climate change effectively with international funding. Unlike other institutions, the GCF is relatively new and is still developing its policies and procedures. Thus, its board of directors has the flexibility to approve a performance payment approach which emphasizes much greater recipient autonomy, simplicity, and transparency than other climate funds have been willing to permit. In this way, the GCF can build on lessons from other performance programs and break from the restrictions of conventional aid that have delayed and sometimes interfered with progress. This paper concludes with a specific proposal for the GCF to pilot a pay-for-results agreement — using a Cash on Delivery (COD) approach — to slow climate change through reductions in deforestation.

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