FC is one of the largest bilateral donors in global forest protection. A large part of the commitment focuses on protected areas. But does the financing contribute to global forest protection and therefore help reduce CO2 emissions? This question cannot be answered precisely without rigorous impact evaluation (RIE) methods.
If you rely purely on monitoring data, you can see that significant forest loss in nature conservation areas is associated with the financing of nature conservation activities by FC and its partners. This baseline situation initially generates little confidence in further investments in global forest protection. Did FC make an active contribution to deforestation or did the financing help avoid a deterioration?
Based on the latest research results, the FC evaluation unit of KfW has developed a reproducible method for causal analysis of forest protection projects. The approach comprises a comparison of the financed protected areas with similar forest areas. The forest areas in protected areas often differ systematically from those in the rest of the country. For example, protected areas are typically more remote than forest areas in non-protected areas.
To identify a “statistical twin”, we compare and link forest areas based on geographical conditions. This approach mimics a laboratory situation involving two test tubes, where one receives an active ingredient while the other does not. We then observe the changes in the test tube. In the case of protected areas, the funds are the “active ingredient” intended to elicit a change in deforestation.
The commitment of FC and its partners significantly reduces deforestation in protected areas. Over the average financing period, financed protected areas have approximately 8% more forest area than comparable forest areas that were not financed.
This study was presented for validation and discussion at scientific conferences. We would like to thank the participants of the Leibniz Environment and Development Symposium, the European Public Choice Society and the Development Economic Committee of the Verein für Socialpolitik for the lively discussion and comments. The work attracted a lot of interest at COP 15 in Montréal. You can find a one-pager on the occasion of COP15 at this link.
Agence Française de Développement (AFD), with the support of the FC evaluation unit (FC E), replicates the analysis approach that we provide as open source code within the framework of the FC E MAPME community. GIZ and WWF Germany are also making efforts to replicate the FC evaluation unit's approach. The FC evaluation unit’s research therefore enables other donors to identify their impacts to help them shape their commitment to climate protection with an evidence base.
