A report entitled REDDy Set Grow (PDF) released last Tuesday by The United Nations and a coalition of the world's foremost financial institutions has warned that huge financial losses could eventuate if countries fail to increase private sector investment to curb deforestation. The comprehensive report outlines various scenarios to increase private finance and investment into forest conservation and enhancement.
USD 17-40 billion per year is required to halve emissions from the forest sector by 2030. Given the magnitude and the absolute urgency of the challenge ahead there is a clear, yet unaddressed, need to mobilise large volumes of private sector financing and investment in addition to government funds. However, achieving deforestation reduction targets does not only depend on moving money from A to B. What is needed are systems that effectively address, at the root of the problem, the drivers and causes of current deforestation trends, which most often are underpinned by unsustainable behaviour in the private sector itself.
A 50 per cent reduction in deforestation rates is needed by 2020 if the forestry sector is to support global efforts aimed at holding global temperature rise to below 2 degrees Celsius, the global climate target that the world’s governments have set in international climate change agreements.
The report also states that an ineffective climate change regime on forests would entail losses in the global economy of $1 trillion per year by 2100, and affect a large portion of the estimated 1 billion people who rely on forests for their livelihoods. So a comparatively small investment of approximately 0.4% of the potential losses involved.
There's a huge financial cost to deforestation... but it's not the only factor to consider; the huge amount of biodiversity loss and climate change causing an increase to extreme weather patterns makes protecting forests a top priority.
A UNEP 2010 July estimated loss of natural capital due to the effects of deforestation on ecosystems and biodiversity put the figure at between $2 trillion and $4.5 trillion per year, making a quick and effective investment into protecting the worlds forests imperative.
When you factor in contamination of water supplies, the loss of productive land through soil erosion and drought, and disruption to supply chains caused by deforestation, the costs involved cannot continue to be ignored.
About 13 million hectares of forests were converted to other uses or lost between 2000 and 2010, down from 16 million hectares per year during the 1990s, according to FAO's Global Forest Resources Assessment 2010.
|Total worldwide deforestation 2010 ~ 34 million km2|
The world’s total forest area is approximately 4 billion hectares. The five most forest-rich countries (Russia, Brazil, Canada, the U.S. and China) account for more than half of the world’s total forest area.
It's imperative that governments undertake a change to the current global economic system, to increase investment into climate change mitigation. An increase of investment by the private sector is required to reduce deforestation to manageable levels.