Citola Blog
Large Economic, Climate and Social Benefits from Increasing Investment into Forestry
A report from UNEP, the United Nations Environmental Programme, has stated that investing an additional US$40 billion a year in the forestry sector could reduce deforestation rates 50% by 2030, increase rates of tree planting by ~ 140% by 2050 and provide the catalyst to create millions of new “low-carbon” jobs.
Now $40 billion is a lot of money particularly considering that global institutional investment in the forestry sector equates to around $50 - $60 billion per annum (largely in the US), however, the benefits of investment are clear with the UNEP report indicating it would generate $3.7 trillion in climate change benefits alone. In terms of benefits to the forestry industry, this investment would likely yield $600 billion in added value by 2050.
Numerous UNEP reports that indicate the scale of investment that is required has led some to question the UNEP modus operandi particularly in the context of another report that suggested that by investing ONLY US $1.3 trillion (£800bn) annually in green sectors that we would achieve long-term global economic stability. However, for context and as stated by the environmental blog TreeHugger, $40 billion when viewed with a global perspective represents a modest 0.034% of global GDP.
‘Investing 0.034% Incremental of Global GDP Could Halve Deforestation, Generate Millions of Jobs and Combat Climate Change’
“The Green Economy initiative has identified forestry as one of the ten central sectors capable of propelling a transition to a low carbon, resource efficient, employment-generating future if backed by investment and forward-looking policies," said Achim Steiner, UN Under-Secretary General and UNEP Executive Director.
"There is also an increasing engagement from the private sector in these nature-based assets and mobilization by cities and communities across the globe in tree planting efforts. Meanwhile, new kinds of smart market mechanisms, ranging from REDD+ to payments for ecosystem services, are emerging," he continued.
From the press release:
To mobilize public and private investments in forests, the UNEP report emphasizes the role of the Payment for Ecosystem Services (PES) and Reducing Emissions from Deforestation and Forest Degradation (REDD+).
PES is a scheme of voluntary transactions aimed to compensate land owners for providing ecosystem services to society, such as carbon storage, watershed protection or biodiversity conservation.
REDD+ recognizes the importance of forests for carbon sequestration through conservation, sustainable management of forests and enhancement of forest carbon stocks. To support these activities, this mechanism allows financial transfers between industrialized and developing countries and between national level agencies and communities and landowners.
Other key findings from the report:
- Roughly One-Third Of Humanity Uses Wood To Cook: More than 2 billion people depend on wood energy for cooking, heating and food preservation.
- Stopping Deforestation Is As Powerful As Nuclear Power: Halting tropical deforestation and planting new forests could represent the mitigation potential equivalent of doubling current global nuclear energy capacity or constructing new million new wind turbines.
- Tropical Deforestation is a 20% of Global Greenhouse Gas Emissions: On average 13 million hectares of tropical forests are disappearing annually. This is equivalent to approximately six billion tonnes of carbon dioxide being released into the atmosphere, contributing up to one-fifth of global greenhouse gas emissions.
As we know, large investment
As we know, large investment will only be driven by commercial reality over-and-above the climate change mitigation benefits at this stage. The intangible benefits will ultimately accrue first to sovereign nations (i.e. they can avoid having to pay this cost) so this justifies macro policy incentives towards a global carbon price, green energy, etc.
Even if the benefits and
Even if the benefits and overall return is 9250% on the investment, the UN really needs to use a commercial basis for driving investment over-and-above current intangible benefits from climate change mitigation... this will be assisted by a global carbon price and drive towards a 'green' economy.
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