Finance for Forests: Progress on the NYDF Oct 2017
Type of Publication: Progress Report
Date of Publication: October 2017
Organizations: New York Declaration on Forests by Climate Focus
Support for the development and implementation of strategies to reduce forest emissions remains insufficient. The magnitude of finance is highly disproportionate to the investment needs and the mitigation potential of the forest sector. Finance for forests in deforestation countries accounts for just over one percent of global mitigation-related development funding. Yet, tropical forests can provide up to 30 percent of the climate change mitigation needed to meet the objectives of the Paris Agreement.
The assessment, captures the flows of “green finance” aligned with forest and climate goals, and compared them with “grey finance,” which has an unclear but potentially negative impact on forests. The report provides a limited picture of the state of forest and climate finance, but despite data gaps, the message is clear:
While there are promising developments, total finance for Goals 8 and 9 – roughly USD 20 billion since 2010 – is insufficient and does not reflect the importance of forests as part of the climate solution. The amount is marginal compared to the USD 777 billion1 in “grey finance” for the land sector that influences forests and is not clearly aligned with forest and climate goals. While not a measure of financial support or investment, the production value of the four key agricultural commodities in tropical countries exceeds USD 1 trillion, illustrating the large economic incentives in the sectors that drive deforestation.
The findings show that more finance is required and that the transition to zero deforestation can be achieved only with a dramatic shift away from traditional investments in the drivers of deforestation toward those in sustainable agriculture and forestry. Only the coordinated and strategic use of finance can enable this transition by targeting the vast existing flows of investment that have an influence on forests. Addressing deforestation and moving toward a sustainable land-use sector also offers significant benefits and can contribute to higher returns, rural economic development, and recaptured government revenues.
More information can be found on the the New York Declaration on Forest website here.