What is the state of the world’s forests? Could be better, and even help the economy

In a world facing economic shocks, food insecurity and a continuing pandemic, a new report highlights an effective but undervalued tool to tackling these crises: forests. 

The State of the World’s Forests 2022 (SOFO 2022), released by the UN Food and Agriculture Organization (FAO) today, explains the importance of forests to the global economy and biodiversity, as well as ways to protect and scale their use in everything from agriculture to sustainable wood production. 

The report lays out three “pathways” that can help build carbon-neutral economies that are “resilient for the environment, but also for the people that live from the land,” said Ewald Rametsteiner, the deputy director of FAO’s Forestry Department and a leading author of the report, in a media seminar last Thursday. The pathways include stopping deforestation and maintaining forests, restoring degraded lands and expanding agroforestry, and sustainably using forests and building green value chains.

Published bi-annually, the SOFO is widely regarded as one of the most important stocktakes on forest ecosystems. This year’s release coincides with the XV World Forestry Congress, which takes place this year in Seoul, Korea from 2 to 6 May. The Congress is co-organized by FAO and brings together experts, policymakers and the private sector to discuss forests and sustainable development.

Shrinking forests

According to the report, forests cover 31 percent of the Earth’s land surface but in recent years have been shrinking by about 10 million hectares per year. This poses severe risks for the 68 percent of mammal species, 75 percent of bird species and 80 percent of amphibian species that inhabit forests. 

Trees are also an effective bulwark against climate change, as they hold more than half of the world’s carbon stock found in soil and vegetation and help maintain weather patterns that are essential for agriculture. Reforesting degraded land could suck 0.9 to 1.5 gigatons of carbon dioxide out of the atmosphere every year. For reference, this would be 2.5 to 4.1 percent of total carbon dioxide emissions for 2021.

“[Forests] are carbon sinks, and if you want to mitigate climate change, we have to make sure that we at least maintain the forests we have,” said Eva Müller, a program consultant of this year’s World Forestry Congress and an author of the report, in the media seminar.

Indeed, the report lists halting deforestation – 90 percent of which is linked to agriculture – as among the most cost-effective ways to slow climate change, with the potential to prevent 3.6 gigatons of carbon dioxide from being emitted every year – equivalent to 14 percent of the extra mitigation needed to keep within 1.5 degrees Celsius of global warming. 

Conservation, restoration and agroforestry

Protecting forests, such as by preventing illegal wildlife trade or avoiding land-use change, can help stop the next pandemic before it happens, and the cost of doing so (USD 22 to 31 billion) is a small fraction of the cost of damages from an actual pandemic.

In tandem with preserving existing forests, restoring degraded land – such as by planting trees in formerly forested landscapes – can reap massive economic benefits, say the report authors. Every USD 1 invested in land restoration could deliver a return of up to USD 30. The report also estimates that the current monetary value of services that forests provide is around 9 percent of global GDP, and up to 5.8 billion people use non-timber forest products (such as nuts, oils or medicine) for their own use or commercially.

Agroforestry, the incorporation of trees into land used for agriculture or as pastureland, holds special potential for boosting biodiversity, food security and even crop production. Farms with trees on them also tend to be more resilient to climate change than conventional crop fields. But the long time needed to grow trees, and common perceptions as trees being financially risky, means that incentives and investment will be needed to overcome farmer’s initial hesitance to take up the practice.

Sustainable use and supply chains

Supply chains that use forest products provide another pathway to sustainable development, especially as a growing global population and affluence is expected to double the yearly demand for total natural resources to 190 billion ton in 2060. Biomass (such as trees) currently makes up a quarter of the material used by the world.

But could forests help meet this growing material demand while maintaining the Earth’s natural balance? Wood generally has a lower carbon footprint compared with non-renewable materials, and the report states that every 1 kilogram of carbon in wood products used in construction as a replacement of non-wood products saves around 0.9 kilograms of carbon emissions. To sustainably increase wood supplies, the authors recommend restoring degraded forests, moving away from inefficiently using wood for cooking and recycling used wood, among others.

“We have fantastic materials that come out of forests: on the one hand forests products such as food, but on the other hand a material that is renewable that can be provided sustainably and is carbon-neutral for a great future that should be more circular, that should be more bio-based,” said Rametsteiner.

Funding the change for forests

All of these strategies, however, will require a massive uptick in funding – specifically, a three-fold increase by 2030. Establishing and maintaining forests, for example, may cost USD 203 billion every year by 2050.

Despite calls for a “green recovery,” most pandemic recovery plans are barely green at all. According to the report authors, only 2.6 percent of pandemic-related spending in the world’s largest economies have been directed toward rebuilding their economies more sustainably. And although many countries’ climate change plans include the use of trees to reduce their emissions, many of these targets are conditional on receiving international finance.

There is an increase in funding flowing toward forests, however, with domestic governmental expenditure taking the lead, followed by companies beginning to invest more in forest conservation and restoration, and carbon markets continuing to grow. Reorganizing financial incentives like agricultural subsidies to include forestry and agroforestry could also help reduce the negative effects of such subsidies – which currently stand at around USD 540 billion per year – on forests.

But a key piece of the puzzle will be increasing support for smallholders, local communities and Indigenous peoples, who currently receive less than 2 percent of global climate financing but manage at least 4.35 billion hectares of forests and farmlands and produce 80 percent of the world’s food.

Supporting local producer organizations and protecting land tenure rights are also crucial for allowing small communities and Indigenous groups to continue sustainably managing their forests. For this, governments can give smallholders long-term rights to their tree products, which would help de-risk agroforestry, as well as formalize the recognition of customary land rights.

As a general guideline, the report authors recommend mobilizing more funding for green jobs and sustainable development, giving local actors what they need to push forest-focused economic growth, placing sustainable forest growth at the center of policy discourse, and coordinating better agricultural, forestry and environmental policy.

“This report is a call to focus on solutions that forests and trees can offer, not only on the problems that we have with forests, deforestation and degradation; but really on the solutions to build a better environment, to build a healthier economy, and a better life,” said Rametsteiner.