Ksustaining the world’s remaining forests is one of the most important environmental challenges of the 21st century. Humanity will not limit global warming to safe levels or stop the ongoing loss of wildlife without it. From the boreal forest that stretches around Northern Europe, Siberia and Canada to the Amazon, Earth’s forests are some of the most biodiverse places on the planet, home to species found nowhere else.
Yet forests are all too often worth more money dead than alive – despite promises from world leaders to to stop deforestation. Their exploitation has pushed many plants, animals and fungi to the brink of extinction, while slowly degrading their ability to generate rainfall, sequester carbon and cool the planet.
In the race to create incentives to conserve forests rather than cut them down, the carbon offset market has taken center stage. Forest offset schemes often sell credits on the basis that they will fund conservation schemes, which protect parts of the forest that would otherwise be cut down – thereby preventing carbon dioxide from entering the atmosphere.
However, scientific research and journalistic investigations indicate that many of these schemes are essentially “hot air” and failure to protect forests as promised As some large firms reconsider their use of forest credits, it raises questions about how we pay for and incentivize the protection of these important ecosystems.
Here are five ways experts have suggested we can tip the balance in favor of forest ecosystem life:
1. Pay countries to look after forests
At Cop28 in Dubai, the Brazilian government presented proposals for a multibillion-dollar global fund which would reward countries for conserving forests and punish them for deforestation. Tasso Azevedo, a forest expert and adviser to President Luiz Inácio Lula da Silva, said countries could be paid $30 a year for each hectare of forest they kept intact, while being penalized for each hectare lost.
“Imagine you have a country with 1,000 hectares of forest. If you maintain the forest, you will get $30,000, but if you clear 10 hectares, you will get nothing,” he told a side event at the summit.
In order to qualify for the Tropical forests forever fund, countries will have to meet three conditions: keep deforestation below 0.5% per year; has forest loss trending downward or keeping it below 0.1%; and give the majority of funds to the people who look after the trees. The fund could be financed by placing a levy on fossil fuel sales, Azevedo said.
2. Ban goods that damage forests
Coffee, beef, rubber, soy and palm oil have driven the destruction of large areas of forests – releasing huge carbon emissions along the way – and are often consumed in countries thousands of kilometers away from the Amazon or Congo basin where they are produced.
To ensure that European consumers do not drive further demand for forest loss, the EU has introduced strict regulations on high risk products. From 2024, firms operating in deforestation hotspots must certify that their goods have not damaged forests after a cut-off date of 31 December 2020. If countries like China and the US also impose restrictions on deforestation-linked commodities, economic demand is likely to drop sharply, reducing the incentive to further clear forests. However, this does not solve the problem of finding alternative means of sustenance.
3. Set a global tax
Barbados’ prime minister, Mia Mottley, has been a strong advocate for an international tax that follows the “the polluter pays” principle generate climate finance. It could also include financing nature-based solutions, such as forest protection, experts say.
By taxing oil and gas profits or the global financial system, Mottley argues, the large sums needed for the global energy transition and future climate resilience could be raised. Proponents say that money must also go to protect climate-critical ecosystems, without which global warming cannot be limited to 1.5C.
“If we took 5% of the oil and gas profits last year — oil and gas profits were $4 billion — that would give us $200 billion,” Mottley said at the Cop28 climate summit in Dubai in December, as she discussed the need for climate change mitigation, adaptation and loss and damage.
4. Exchange a developing country’s debt for spending on nature
Many of the world’s most nature-rich countries also have the most debt, meaning they struggle to pay for conservation. By refinancing debt at a lower interest rate in exchange for custodial obligations, debt-for-kind swaps growing in popularity and can be used to finance forest protection.
Earlier this year, Ecuador had the largest transaction of its kind, is refinancing $1.6bn (£1.3bn) of its commercial debt at a discount in exchange for a consistent income stream for conservation around the Galápagos Islands. Gabon entered in a similar deal to unlock money for marine conservation.
At Cop28, Colombia – the host of next year’s UN biodiversity summit, Cop16 – has been a leading voice on calls for more action on debt relief in return for climate and nature funding. The country’s president, Gustavo Petro, said that biodiversity will be the bedrock of the country’s economic wealth after it transitions from fossil fuels, but its environment minister, Susana Muhamad, has warned that debt is hindering the transformation. “For developing countries, the situation is critical because many of our economies are heavily indebted, especially after Covid. We need fiscal space capacity for climate action to start making the real commitments,” she said.
5. Reform the carbon and biodiversity markets
Despite major flaws in the current system, world leaders and international institutions such as the World Bank have thrown their weight behind carbon markets as a tool to finance forest conservation worldwide. Supporters of carbon markets say that by purchasing high-quality credits, countries and companies can transfer some of the billions needed to keep forests standing as part of their efforts to offset their emissions. Cop28 negotiations on how to make it work ended in failurehowever.
The sector is wrestling with human rights concerns, scientific evidence that many carbon credits are largely worthless, and lack of clarity about financial flows, but there are those who say it could still work. Among them is Johan Rockström, the director of the Potsdam Institute for Climate Impact Research and chief scientist at Conservation International, which manages a number of carbon offset projects.
“On the one hand, the voluntary carbon markets do not work on nature, and there is reason to be deeply concerned about how they are misused as compensation mechanisms for companies that do not follow the scientific path regarding the phasing out of fossil fuels,” says Rockström
“On the other hand, we need nature-based solutions more than ever. We need finance more than ever, and we don’t have another mechanism,” he told the Guardian.