Every day, forests support our way of life by cleaning our air and water and providing a home for an abundance of species. Keeping forests standing is also a key part of the global response to climate change, as forest destruction is responsible for about 15% of total greenhouse gas pollution.
Protecting forests – and these critical “ecosystem services” they provide – is one of the greatest challenges facing our planet today. With the world’s population likely to reach nearly 10 billion by 2050, balancing the need for conserving forests with the rapidly accelerating human needs for food, fiber, and fuel is more daunting than ever before. Nowhere is this tension more visible than in the world’s tropical regions, where huge swaths of forests are being cleared each day to make way for commercial agriculture.
But there is a path forward. Forest Trends is finding innovative policy solutions and developing market solutions that work for conservation as well as the economy to protect our forests, soils, water, and wildlife.
Forest Trends strives to protect forests by:
- Providing high-quality research that focuses on deforestation where it is most acute: in key tropical forest countries in Africa, Asia, and Latin America.
- Finding innovative policy solutions that governments and businesses in consumer countries can take to address the demand that drives this forest loss.
- Working across the spectrum of public and private finance to protect forests and decrease greenhouse gas emissions, promote legal and sustainable forest trade, and preserve the rights of indigenous communities and other traditional forest stewards.
Finance & Investments for Forests
The world’s forests provide countless environmental services on which people and the planet depend, but those services remain undervalued in traditional markets and financial systems.
Nobody wakes up wanting to destroy the rainforest. But our economy is structured in a way that provides clear financial incentives for individuals and companies to convert the natural, shared capital of a standing forest into private profit through deforestation.
As long as forest destruction remains more profitable than forest protection, converting forests into agricultural and grazing lands will continue to be the path of least resistance for business and development, leading to extensive forest degradation and destruction. In fact, agriculture alone is responsible for over 70 percent of deforestation in tropical and sub-tropical countries each year.
Forest Trends looks for new opportunities to make markets and finance work for forests, rather than at their expense, and to shift our economy toward appropriately valuing forests, and all of their co-benefits. We do so by developing and promoting innovative solutions that unlock public and private finance at the scale necessary to turn the tide on deforestation and make a compelling case for why forests are worth more alive than dead.
These approaches work not only to reduce global emissions from deforestation and conserve our natural infrastructure, but also to remedy the economic and social problems that underlie forest destruction; they focus just as much on alleviating poverty and empowering communities as on saving trees.
Specifically, we work to:
Reduce deforestation around the world
One of the most immediate and cost-effective strategies to fight climate change is by stopping the destruction of the world’s forests, which act as critical “sinks” that trap greenhouse gas emissions. Protecting forests, particularly in tropical regions, also delivers a wide array of social, economic, and environmental “co-benefits,” like essential livelihood opportunities for indigenous communities living in forested areas.
A central focus of Forest Trends’ research and policy work is the UN program on Reducing Emissions from Deforestation and Forest Degradation (REDD+), which provides an international framework to incentivize tropical forest protection. Our initiatives bring unique and complementary perspectives to the most pressing questions around REDD+ today, like how to make the concept work in a way that lives up to its promise as a tool for climate action and sustainable development:
- Forest Trends tracks REDD+ finance in 13 countries – from high-level donor commitments all the way down to how and when funds are actually spent on the ground – in order to expose gaps and needs to governments, multilaterals, climate negotiators, and other stakeholders. [link: REDDX]
- Our Ecosystem Marketplace initiative [link] tracks new and continuing REDD+ projects from around the world in the annual State of Forest Carbon Finance [link: filtered publications for search term: “forest carbon finance”] reports, reporting on key data and emerging trends in REDD+ project development and carbon markets.
- Our Public-Private Finance Initiative [link] works to link REDD+ finance to leverage other sources of investment – public and private, international and local – for forest conservation.
- 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 REDD+ mechanisms.
- Our staff works 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.
Track the booming field of “conservation investing”
There’s a new wave of investable conservation efforts – including sustainable forestry, agriculture, fisheries, biodiversity, and water – that are emerging in response to demand from “impact investors”, corporations, and other sources of private capital. Our research [link: filtered view of publications with search terms “investment in conservation”] shows that investors are increasingly looking at forests, wetlands, and other natural landscapes as smart investments worth protecting and enhancing.
As private capital pours into activities like habitat protection and more forest-friendly food production, Forest Trends is working with others at the forefront of this emerging field to chart its growth and identify the obstacles that are keeping billions of dollars in potential investment stuck on the sidelines.
Find new synergies between sustainable agriculture and forest protection
Tropical forests mitigate climate change, protect watersheds, and provide havens for biodiversity, but they are under pressure from competing land-uses, especially agriculture, and there is often no economic reward for protecting them. Transforming agriculture to more sustainable models is possible, but the public sector cannot finance this transformation on its own.
That’s why we’re working [link: PPFI Initiative section] in key tropical forest countries, like Brazil [report link] and Peru [report link], to find creative approaches that leverage public and private finance together to support sustainable agriculture. In Ghana, we’re looking at ways to catalyze a transition to “climate-smart” cocoa farming [link: publications filtered with terms “climate smart cocoa”], a pathway to increase yields and reduce farmers’ exposure to climate change risks. In each case, the end goal is to create new incentives for conserving forests and improving agricultural yields at the same time – slashing greenhouse gas emissions in the process.
Markets for Forests
Markets and conservation have not always gone hand in hand. Much of the world’s deforestation is the result of agriculture and other market forces failing to adequately value the services provided by standing forests – and consequently resulting in their destruction. Since it was founded, Forest Trends has striven to identify and develop creative new ways to put markets and financial mechanisms to work for forests – rather than at their expense – in ways that also support robust economies.
More and more, we find that these solutions are being put to the test in the real world – and succeeding. Hundreds of businesses including high-profile brands like Microsoft and Disney have put a “price” on the carbon they emit in an effort to prepare for the low-carbon economies of the future, even in the absence of regulations requiring them to do so. Carbon pricing promotes actions like lowering and offsetting emissions, increasing energy efficiency, using cleaner sources of power, and protecting forests.
Carbon pricing and environmental markets attach a monetary value to the carbon stored in forests and other landscapes, and leverage this value to spur conservation through the use of market forces. Carbon markets allow governments, companies, and individuals to fight climate change by financing projects around the world that reduce carbon dioxide (CO2) emissions – often by protecting tropical forests. These projects produce offsets that are rigorously verified by third-party sources, which buyers can then purchase in order to offset their unavoidable emissions. As of 2016, offsets equivalent to 1.1 billion metric tonnes of carbon dioxide emissions (BtCO2e) have been transacted voluntarily.
Whether these buyers do so through the voluntary carbon market to ramp up their climate action or through “compliance” markets in order to comply with regulation, the end result is the reduction of greenhouse gas pollution entering the atmosphere. In 2015, market actors around the world paid $173 million to offset 23 million tonnes of CO2 emissions (MtCO2e) – roughly equivalent to the annual emissions of Uruguay.
Supply Chains and Forests
What are the greatest drivers of deforestation? The answer may be surprising.
Commercial agriculture is responsible for over 70 percent of forest destruction in tropical and sub-tropical countries, and of the many types of agricultural commodities, those most strongly linked to deforestation are palm oil, soy, timber & pulp, and cattle. These “big four” commodities end up in products that are found in virtually all consumer goods, from hamburgers and clothing to furniture and paper products, as well as in less obvious places like animal feed and packaging materials.
These commodities pass through vast global supply chains that involve multiple actors and span from a cattle ranch in Brazil or palm plantation in Indonesia all the way to your local grocery store. And when these supply chains include products that drive deforestation in tropical forest countries, they also fuel numerous legal, environmental, and social impacts – including greenhouse gas emissions, water pollution, species loss, food insecurity, health risks, and armed conflict over resource use.
There is an amplifying drumbeat of corporate stakeholders – from investors to non-profit organizations to consumers, calling for a deeper understanding of the effect individual companies’ actions have on forests. Recognizing the growing urgency to systematically address these issues, hundreds of private sector companies have stepped forward in recent years to publicly commit to reducing and/or eliminating commodity-related deforestation throughout the supply chain.
Promising to shift from “business as usual” to a more sustainable system that keeps tropical forests intact is one thing, but delivering on those promises requires a profound transformation of our collective approach to agricultural production and commodity supply chains and markets more broadly. Therefore, in 2015, Forest Trends introduced its a href=”http://supply-change.org/”> Supply Change initiative to increase transparency around company commitments to reducing commodity-related deforestation. Supply Change synthesizes data from already available sources on the characteristics of those commitments and also tracks companies’ progress towards achieving them – or lack thereof. As a result, Supply Change enables stakeholders – investors, businesses, governments, non-profits, and consumers – to make more informed decisions that support or hold companies accountable.
The Supply-Change.org information portal lists company profiles with detailed information about their deforestation commitments. In addition, Supply Change products include analytical reports that shine light on global trends and challenges, original articles and blogs, webinars and events (recordings available here), and a monthly newsletter (subscribe here).
As our research shows, there’s much more work to be done, but the good news is that change is happening.
Of course, even the most leading companies with robust commitments won’t end deforestation if they are undermined by an unsupportive global corporate procurement market and detrimental behavior in producer countries such as illegality, corruption, and weak protection policies. For that reason, our work on supply chains is intrinsically tied to our work on legality and governance.
Legality and Governance for Forests
When it comes to protecting forests and the communities who depend on them, good governance is the foundation upon which meaningful, long-term change is built. By contrast, poor forest governance and corruption undermine economic and social development; they weaken the rule of law and undermine the institutional foundation on which sustainable economic growth depends.
Illegal logging is estimated to be the most profitable natural resource crime, generating criminal revenues of up to $150 billion per year and accounting for between 15 and 30 percent of the global trade in timber products. Illegal logging and the poor governance of the forest sector that often goes along with it have financial, ecological, and social costs to a society. They cost governments billions of dollars in lost tax revenue – revenue that could be used to fund basic government programs. Where illegal forestry activities occur, it is also impossible to guarantee that forest ecosystems are being sustainably managed.
The drivers of illegal deforestation are complex and will need to be addressed by legal and regulatory systems designed to ensure accountability, rule of law, transparency, and inclusiveness. Forest Trends fights illegal deforestation by promoting better policies to govern forests. We highlight the importance of measures to improve transparency, accountability, and citizen oversight. We also draw attention to the role of consumer demand in perpetuating and financing illegal activity in the forest sector, and shed light on the risks – including financial risk – that buyers, companies and financiers, and governments assume in supporting it.
Specifically, we work to:
Build capacity for creating and enforcing laws in countries that produce – and consume – forest products
To make illegal business models obsolete, Forest Trends works through our Forest Policy, Trade, and Finance Initiative to track timber trade flows and incentivize legal timber production and consumption:
- In the tropical forest countries where wood is sourced, particularly in the Mekong region, we help create and improve policies for managing forests and resources that are critical to forest ecosystems; and
- In the consumer countries where complex, high-risk supply chains for wood products terminate, we support enforcement of existing laws designed to prevent illegal timber from entering consumer markets – and encourage similar laws in other consumer countries where they are badly needed.
Harmonize frameworks to incentivize good governance and tropical forest protection
Deforestation and illegal logging significantly undermine efforts to fight climate change. And when countries intent on protecting their forests fail to adequately address legal frameworks in the process, well-intentioned conservation policies can become ineffective or even counterproductive. For example, demarcating a new protected area might simply cause illegal activity to move elsewhere within a region, and criminal networks driven out by new regulations may pick up where they left off in a neighboring country.
The need to address legality and governance in order to truly incentivize forest protection is widely recognized, but Forest Trends also strives to understand the inter-related components of forest industry, social and human rights issues, and environmental benefits. By breaking down the institutional “siloes” between these conversations, we can ensure that the complementary goals of reducing emissions and improving governance can be achieved simultaneously.
Link sustainable forest management and peacebuilding
There is a growing consensus on the role natural resources, including forests, play in fueling violent conflict in parts of the world where governance is weak. The UN estimates that at least 40 percent of all conflicts since the end of the Cold War are associated with natural resources, and yet fewer than 15 percent of peace agreements address resource use.
It is crucial for countries recovering from conflict to address not only the governance and legal frameworks surrounding forests, but also to respond to the grievances of local populations who often miss out on the revenues from these resources. Starting in Myanmar, Forest Trends has entered the new field of “environmental peacebuilding,” to help countries improve governance of forests during post-conflict transition.