The fate of our climate is intrinsically tied to the fate of our natural ecosystems. Earth’s forests soak up between 30 and 40 percent of global carbon emissions each year. Oceans absorb another quarter. In the United States, specifically, forests, grasslands, and soils already sequester more than half the amount of carbon that all cars and trucks on US roads emit.
Protecting these carbon-rich ecosystems isn’t optional; it’s a prerequisite for ensuring a habitable Earth for future generations.
We have a long way to go. Deforestation is responsible for around 15 percent of annual CO2 emissions around the world, reducing a significant portion of forests’ carbon storage. And the broader “land use” sector, which includes agriculture, is responsible for roughly 25 percent of total greenhouse gas emissions.
While the challenge of cutting those numbers is daunting, the potential climate benefits are huge. Keeping trees standing prevents emissions from their destruction while at the same time bolstering the planet’s storage capacity for carbon, making forests a uniquely powerful weapon against climate change. For example, scientists estimate that halting and reversing tropical deforestation could carry us a quarter of the way toward avoiding catastrophic global warming.Forest Trends’ work on emissions cuts across traditional boundaries to find practical, real-world solutions by bringing new allies to the table. Specifically, we:
- Track progress by governments and international institutions toward financing forest protection, particularly through the UN program Reducing Emissions from Deforestation and Forest Degradation (REDD+)
- Leverage new combinations of funding – public and private, domestic and international – to scale up forest conservation and “climate-smart” agriculture.
- Enlist the help of the private sector, the biggest missing link in the fight against climate change – and how to pay for it.
- Promote policies that put natural infrastructure to work helping vulnerable communities adapt to the intensifying effects of a changing climate.
Markets and Climate
Since it was founded, Forest Trends’ mission has been to put markets and finance to work for conservation, rather than at its expense.
As carbon-absorbing ecosystems like forests become more and more instrumental in the fight against climate change, Forest Trends has set out to promote market-based incentives that give value to the climate benefits those ecosystems provide. In doing so, we hope to accelerate the global transition to the robust, low-carbon economies of the future.
Our work using markets to fight climate change cuts across the public and private sectors, forging new and diverse alliances capable of lowering greenhouse gas emissions – especially through forest conservation and more sustainable land use.
We track projects around the world that protect or restore forests, produce renewable energy, or take other steps to reduce carbon emissions – in the process generating carbon offsets. These offsets, once rigorously verified by third-party sources, are purchased by companies, governments, and individuals seeking to ramp up their own climate action by offsetting a portion of their emissions.
Offsets flow through both voluntary markets (for example, when a company offsets a portion of its emissions to meet internal sustainability targets) and compliance markets (for example, when a business acts to comply with regulatory requirements), as well as other market-based mechanisms that don’t fit neatly into either category.
The annual State of the Voluntary Carbon Markets report from our Ecosystem Marketplace initiative is the authoritative resource for data and analysis related to the voluntary carbon market, which has emerged as a potent testing ground for market-based climate action.
Meanwhile, the annual State of Forest Carbon Finance report looks exclusively at offsets tied to forest and land-use emissions reductions, but includes in its analysis compliance markets around the world.
We look for opportunities within the landmark Paris Agreement for markets to scale up countries’ ambition for reducing emissions. Article 6 of the Paris Agreement allows for national governments to use carbon markets on a voluntary basis, and Forest Trends is actively working with countries and partners to create, where appropriate, robust carbon markets with environmental integrity and strong social safeguards.
Forest Trends is also exploring opportunities for national governments to enlist private sector participation in this area, particularly through the UN program Reducing Emissions from Deforestation and Forest Degradation, or REDD+. This support is critical if countries are to achieve their commitments under the Paris Agreement, and our experts have identified a range of policy “carrots” and “sticks” governments can use to spur businesses to act, either voluntarily or in order to comply with domestic law.
We leverage new combinations of funding – public and private, domestic and international – to scale up forest conservation and “climate-smart” agriculture. Forest Trends works in key tropical forest countries, like Brazil and Peru, to find creative approaches that leverage public and private finance together to overcome existing obstacles to large-scale sustainable agriculture.
We research market-based investments in “green infrastructure” that make communities and the landscapes they call home more resilient to climate change. Governments, water utilities, companies, and communities around the world invest in cost-effective, nature-based solutions, like healthy forests, wetlands, grasslands, and mangroves that help secure reliable access to clean water – and our Ecosystem Marketplace initiative tracks these investments in our State of Watershed Investments report series.
We also promote market-based mechanisms to help private industries reduce their greenhouse gas emissions. In late 2016, the International Civil Aviation Organization (ICAO) agreed to allow the airline industry to use a global carbon market-based measure known as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to achieve its carbon-neutral growth pledge.
The specifics of the plan are still evolving, but it leaves the door open for the aviation industry to meet its industry-wide goal of climate-neutral growth through the use of forest-based carbon credits, which would provide a critical infusion of funding to help protect the world’s forests.
Healthy ecosystems not only reduce greenhouse gas pollution storing carbon; they also help us adapt to the intensifying effects of a changing climate. This holistic strategy for mitigation and adaptation requires a coordinated approach at multiple levels: international, national, and subnational (e.g., states and cities), as well as the private sector.
Strong public policy is the foundation upon which a coherent, sustained climate strategy is put into action. Realistic policies based on strong science for mitigating climate change and adapting to its effects not only help define where public finance will flow; they also guide policies for years to come and establish critical incentives for private sector participation.
As governments grapple with the challenges of climate change, Forest Trends equips policymakers with the credible data and expertise needed to take decisive action. Our philosophy is that climate policy ought to unlock the potential of forests, wetlands, and other “natural infrastructure” to play their part as the planet’s first line of defense against climate change.
Forest Trends experts have been participating in international climate negotiations for over a decade. Our policy work in this area focuses on the power of standing forests to dramatically cut carbon emissions. Forest destruction, most critically in tropical regions, currently emits about as much CO2 as all cars and trucks on the planet combined. But by slowing, stopping, and reversing tropical deforestation – and, in turn, letting those forests soak up more carbon – some estimates indicate that we could cut net global emissions by as much as 30 percent.
That’s a tall task, given that traditional market and policy forces often incentivize the destruction of forests rather than their conservation. But the UN program Reducing Emissions from Deforestation and Forest Degradation (REDD+), as well as the carbon markets enshrined in Article 6 of the Paris Agreement, provide powerful tools to flip the script.
Our experts collaborate with other NGOs in order to make sure that national and sub-national REDD+ programs are structured properly, with full input from all relevant stakeholders. Meanwhile, each year our researchers track the size and scope of voluntary markets, which serve as a critical policy laboratory.
At home in the United States, Forest Trends has worked on innovative climate policy solutions that can put US farms, forests, and grasslands to work and serve as a potent “carbon sink” – and in doing so, fighting climate change – even at a time when the national government is backing away from international negotiations.
Climate policies geared toward reducing emissions are critical, but they must also be accompanied by policies to make communities more resilient to climate change. These policies must be holistic – touching on everything from urban planning to rural land use – and they must be tailored to local and regional circumstances: the solutions in Lima, Peru may look very different from those in Rotterdam, or Guangzhou, or eastern Tennessee.
One common element among all these solutions is a “green+gray” approach that uses natural infrastructure, like healthy forests or coastal wetlands, to make traditional “gray” infrastructure more effective and durable.
Finance & Investments for the Climate
Governments and businesses around the world have recognized the urgent need to act on climate change, and scientists have identified powerful tools to mitigate and adapt to its effects. Now, the challenge is finding the funding necessary to translate political will and technical know-how into effective climate action.
Bolstering our planet’s first line of defense against climate change – forests and other carbon-absorbing landscapes – is one of the most immediate and cost-effective ways to avoid climate catastrophe. Tropical forests, in particular, offer a potent weapon against climate change, but they are under pressure from competing land-uses, especially agriculture, and there is often no economic reward for protecting them.
By putting finance to work in creative ways, we can incentivize forest protection and more sustainable land use on a massive scale, bending the curve toward achieving necessary reductions in greenhouse gas emissions.
Forest Trends takes a multi-pronged approach to climate finance:
We track private as well as public finance allocated by governments around the world to protect forests, and also identify gaps in that funding. As part of this work,
We track public and private investment in forest conservation and sustainable forest management.
We try to strengthen the involvement of the private sector, the biggest missing link in the fight against climate change and identify where private finance can have the biggest impact.
We leverage diverse sources of investment – public and private, international and local – to support low-carbon agriculture.
We track the potential for, and impact of, creative approaches that leverage public and private finance to create new incentives for conserving forests and improving agricultural yields at the same time – slashing greenhouse gas emissions in the process, for example in Brazil and Peru.
One promising opportunity to use forests for climate action is through a UN program known as Reducing Emissions from Deforestation and Forest Degradation, or REDD+. Forest Trends research has shown that as of 2015, approximately 90% of REDD+ funding in 13 key tropical forest countries came from public sources. The previous six years had seen more than $10 billion (B) cumulatively pledged to REDD+ programs.
Forest Trends also strives to equip local communities in forested areas with the tools and data they need to put REDD+ finance to work fighting climate change. Our Communities Initiative [link] helps indigenous communities strengthen their capacity to secure and manage their forests, thereby enabling them to effectively participate in and benefit from climate finance, including REDD+ mechanisms.