Don't Miss the Forest for the Trees: Deforestation and Sustainable Finance

We are rapidly destroying the world's forests. Sustainable forest financing can help

Between 12 and 15 million hectares of forest are lost every year. To get a sense of the scale of the devastation, that's equivalent to 36 football fields per minute. Some are lost to forest fires, which have increased along with climate change, but most is the result of deforestation to convert natural forests for other uses, like agriculture (notably for pulp, palm and soy plantations), roads and human development.

And along with the trees go the natural habitats that wild animals need to live: Some 80 percent of all known species live in tropical forests. And that's not the full extent of the damage: Deforestation accounts for 15 percent of global greenhouse gas emissions. Also, without trees, which evaporate groundwater, local climates become drier. And without the protection of the tree root systems and tree litter, soil erodes more quickly and the nutrient-rich upper layer of soil is lost, making the land less fertile.


The loss of forests also disrupts lives, as millions of people around the world rely directly on healthy forest ecosystems, from small-scale farming to hunting and gathering. Deforestation has led to social conflict, even violence. Last year in the Democratic Republic of Congo, for example, a villager in Bumba territory (the location of the world's second-largest tropical rain forest after the Amazon) was killed and several women were raped in a skirmish with police and soldiers over protests against logging company SIFORCO, a subsidiary of the Swiss group Danzer, which locals claim have not made good on promises for being allowed to log their forest.

"The Bumba tragedy proves that once again, we are far from the so-called 'sustainable forest management' celebrated by donors (including the World Bank and national aid institutions, notably from Germany, France and the Netherlands), the Congolese government and its partners," writes Rene Ngongo of Greenpeace International. "How can there be talk of sustainable forest management when covered in such violence, let alone the destruction of the last remaining large blocks of intact forests?


The overall trend involves a simple inverse proportion: As the human population increases, forests decrease. And since the human population continues to skyrocket to reach an eventual 9 billion people by the year 2050, how humanity manages the world's remaining forests is absolutely critical if true sustainable development is to be made a reality.

Now, there is a new tool to help: The Little Forest Finance Book, which highlights ways to increase forest-friendly sustainable finance. Officially launched last month at the 11th Conference of the Parties to the United Nations Convention on Biological Diversity, in Hyderabad, India, and produced by the Oxford, UK-based forest protection think-tank Global Canopy Programme (GCP), the book is being billed as "a reference for decision makers and project stakeholders within governments, NGOs, the private sector, and forest communities who want to understand where forest finance can be raised, how it can best be managed, and the types of activities that it enables."


Part of set of CGP policy publications launched in 2008 that zero in on some of the key issues within the international policy negotiations, the book "seeks to demystify the forest finance landscape, and presents a clear framework of realistic and widely applicable options for decision makers to catalyse further action and debate in this field," says the GCP. "It is grounded in reality rather than theory, and draws on numerous case studies to indicate emerging ideas, best practice, and innovative ways of thinking about forest finance for the future."

The book outlines various specific elements of forest finance, including co-investments, credit guarantees, forward contracts, property rights, insurance, certification and domestic trade laws. It also presents an excellent overview of the international context, defining a host of sometimes confusing acronyms in the global policy space, such as UNFCCC, UNCCD, CBD and UNFF.

"The book analyzes in a clear and concise manner the various options for forest financing and presents case studies underway in developing countries," writes Braulio Ferreira de Souza Dias, the United Nations Executive Secretary of the Secretariat of the Convention on Biological Diversity, in the book's foreword. "As such, it will be an indispensible tool, making forest financing options more accessible to all. For this reason, I wish the book a wide readership."


"In an era of diminishing public expenditures for biodiversity conservation, we need innovation, communication and effective partnerships," said Rachel Kyte, vice president for sustainable development at the World Bank, at the Hyderabad conference. "We are seeing more and more good examples of partnership that cross the boundaries between the public, private and non-government spheres to bridge public financing gaps and to deliver effective conservation on the ground."

The conference also saw the release of a new World Bank report, "Expanding Financing for Biodiversity Conservation: Experiences from Latin America and the Caribbean," which present five examples across Latin America that show the success of conservation and community development, specifically using a combination of public, private and non-governmental funding. Hopefully, with these examples of success and The Little Forest Finance Book, investors and policy-makers will be able to craft and implement solutions across all the world's forests.

In the end, it doesn't matter where the sustainable forest finance comes from. What matters is that it soon overtakes unsustainable forest finance. More humans are on the way. They will want paper, wood, soy and palm oil. To be sure, the trail to and from those and other forest-based products is lined with gobs of money. There's no escaping that. It's how that money is used to extract resources from the Earth's dwindling forests that must be addressed.



WWF. Deforestation. October 19, 2009. Accessed October 19, 2012.
Rene Ngongo. Deforestation and violence in Congo. Greenpeace International. July 15, 2011. Accessed October 19, 2012.
Global Canopy Programme. The Little Forest Finance Book: 14 catalysts to scale up forest-friendly finance. October 16, 2012. Accessed October 19, 2012.
Global Canopy Programme. The Little Forest Finance Book. October 16, 2012. Accessed October 19, 2012.
World Bank. Financing Successful Nature Conservation in Lean Economic Times: World Bank Report Highlights Latin America’s Successes. October 17, 2012. Accessed October 19, 2012.

image: Timber from a Malaysian forest at a sawmill where it is being processed for export (credit: Stephen Codrington, Wikimedia Commons)