Launch of Little Forest Finance Book: Fourteen catalysts can help save tropical forests from destruction

The Global Canopy Programme's new Little Forest Finance Book (download here) was launched today at UN biodiversity conference in Hyderabad, India.

It describes a range of catalysts that can be applied now by public and private sector decision makers in order to rapidly raise the USD billions needed to save the world’s disappearing tropical forests.

The launch comes as governments from around the world meet to consider ways to mobilise financial resources to protect the world’s biodiversity at the 11th Conference of the Parties (COP) of the United Nations Convention on Biodiversity (CBD), in Hyderabad.

Current finance is falling vastly short of that needed to stop tropical deforestation and maintain forest biodiversity and ecosystems services, which are vital for global human wellbeing and economic prosperity.

At the launch, Nick Oakes, lead author of the book, said, “Investments in forest-friendly forms of development are currently dwarfed by the flow of finance into activities that destroy tropical forests. What’s needed are investments that catalyse finance to pay for the transition of damaging activities, such as expansionist agriculture, towards sustainable alternatives, and to stimulate a new ‘green economy’ that creates demand for new forest-friendly goods and services.”

The book describes numerous opportunities for generating revenue from activities that reduce tropical deforestation, maintain or restore forests. These include ‘greener’ agricultural commodities, bio-prospecting, providing forest ecosystem services, and carbon offsets.

The problem, say the authors, is that a number of obstacles are stalling investment in these activities. These include the perception among potential investors that forest-friendly projects are high-risk and offer relatively low returns.

Also, activities that cause deforestation and forest degradation are often more profitable than those that do not.

Meanwhile, lack of understanding of novel finance solutions can lead indigenous forest communities or small scale ranchers wishing to develop forest-friendly projects to stop short, because of the difficulty of hiring outside experts to help them access money, such as loans.

Governments too, outside treasury departments, often find the language of finance complex and hard to understand.

“The Little Forest Finance Book is a primer for anyone seeking to overcome the challenges of scaling up forest-friendly finance. The fourteen catalysts we have identified demonstrate how this can be done,” explained Mr Oakes.

“For example, technical assistance, one of the catalysts, can help boost project management skills, which can increase the likelihood of securing returns on investment and therefore reduce the operational risk for investors. Public sector co-investment in projects can reduce the risk for potential private investors.”

“And in terms of profitability, price floors set by governments or the private sector can ensure minimum levels of revenue from forest-friendly activities, while certification can add value, and possibly a price premium, to forest-friendly products.

“These catalysts are realistic and widely applicable ways for both public and private sector decision makers to get money to the ground, to the organisations and people who can bring about the deep transformation that is urgently needed in the way we manage, use and protect the world’s tropical forests.”