There are approximately 391 million hectares of high-risk forests worldwide. A recent UNEP report found that these forests are among the most crucial for sustaining life on the planet. By protecting them, we avoid major carbon emissions dumps while providing multiple benefits to the environment. Conserving forests saves $81 billion in climate-related damages each year.
The first State of Finances for Forests report identified the financial gap hindering sustainable forest management. The annual forest finance gap is $216 billion. That’s the gap between current financial flows and the investment needed to achieve global forest goals by 2030. Forest funding is currently $84 billion, but the estimated need is $300 billion by 2030 and $498 billion by 2050, respectively.
Governments have already made commitments under the Rio Conventions, the Paris Agreement, and the Kunming-Montreal Global Biodiversity Framework. The report warns that current investment is “insufficient but also misdirected.” Currently, there are more than $400 billion in annual agriculture subsidies that may potentially harm the environment. They contribute to the loss of 2.2 million hectares of forests every year. That is an area exceeding 30 times the size of Nairobi, the headquarters of the UNEP.
Private investors could help shorten the gap, but less than one in every $10 billion for forest investment comes from them. Private financing for forests was $7.5 billion in 2023. The remaining amount came from public sources, despite corporate commitments.
Tropical Forest Countries Need More Assistance For Forest Protection
Some tropical forest countries spend more on forest investment than they receive for development assistance for forests. In 2023, 22 of those countries spent 36 times more than they received in assistance from developed countries. An estimated 31 tropical forest countries allocated $12.9 billion to forests, or 17 percent of total domestic government spending on them. While developed countries do spend more on forest investment, the need is greatest in lower-income countries, which often have limited public funds.
“Forests are not just carbon stores or wildlife habitats – they are the infrastructure of our global food, water, and economic systems,” said Inger Andersen, Executive Director of UNEP. “Failing to invest in tropical forest protection undermines their true value, especially in countries that are navigating extraordinarily complex trade-offs between development and conservation every day.”
Around 90 percent of palm oil production comes from a few islands in Indonesia and Malaysia. Tropical forests in both countries have been converted to palm oil plantations, which have devastated plant and animal species. It is the most commonly produced vegetable oil. Palm oil production causes massive carbon emissions. Indonesia is the world’s largest producer of palm oil and ranks 10th in carbon emissions.
Forests account for around 30 percent of global carbon absorption. Investing in forest management and protection can “significantly contribute” to global climate change mitigation efforts, as a Nixon Peabody report pointed out. Don’t expect the federal government to keep any commitments to invest in forests made by previous presidencies. In March, President Trump signed an executive order directing federal agencies to research ways to amp up timber production. He has consistently declared war on climate change mitigation. That means that private investors, including American companies with commitments, must increase their investment in the forest our planet depends upon.
