Report finds climate finance can do more to protect forests
A new report has found that although climate finance can be particularly effective in sectors such as renewable energy, funding is not efficient when it comes to protecting forests and the rights of the wildlife that inhabits them.
According to Climate Focus’s “Finance for Forests” report, which examines how effectively the New York Declaration on Forests (NYDF)’s 10 goals for protecting forests are being met, not enough money is being funnelled into investments that stop deforestation or promote the growth of new woodland.
More than 200 companies have publicly endorsed NYDF’s ten-goal pledge, which aims to slash deforestation by 50 per cent before 2020 and completely by 2030. The goals focus on educating corporate players and curbing the production of commodities such as palm oil, soy and beef products which have a negative impact on wooded environments.
Findings from the report show that the $20 billion (£15 billion) invested in efforts to curb deforestation is dwarfed by the near-$780 billion (£590 billion) spent since 2010 on what is called “grey finance” by its authors, which are projects with unclear but potentially negative impacts on forests. These include investments in beef production, timber or palm oil enterprises which are identified as “key deforestation drivers”.
Since NYDF’s goals were published, deforestation has actually increased by 35 per cent, led by companies in Indonesia and Brazil.
According to Climate Focus, finance for forestry projects accounts for just over one per cent of the world’s climate mitigation-related funding. Of the $167 billion of public-sector funding set aside for combating climate change, only 2 per cent – $3.6 billion – went to forests.
Tropical forests alone are capable of reducing the effect of climate change to keep to the two-degree model outlined in the Paris Agreement by 30 per cent, the report adds.
The document reads: “Our 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.”
Adopting sustainable land-use practices can offer benefits to landowners, higher returns for investors and rural economic development, it continues.
The report was launched at an event in London this week and was attended by a delegation of indigenous leaders from Brazil, Indonesia and other developing countries.
Speaking at the event, Franziska Haupt, a senior land use consultant at Climate Focus, said that “more and better” climate finance was needed to solve the deforestation crisis.
She added: “This means being more strategic, targeting deforestation and looking at opportunities to introduce safeguards.”
Haupt highlighted the work of banks like HSBC, which will terminate contracts with customers who do not meet sustainability standards, as crucial in avoiding negative impacts on the world’s forests.
She also emphasised that while policy and green investment on a large scale are both important, transformative change would depend on people who lived on ground and could personally help implement new measures.
James Barrett, spokesman for GWD Canada, said that the report was proof that forestry investment could be harnessed to do even more good.
He added: “Tackling deforestation through investment is clearly achievable, but much more work needs to be done. Investors can pick the right avenues to ensure strong returns, but also that they make a positive impact on the global environment.”