Accelerating finance to reduce forest emissions

This policy brief evaluates progress toward Goal 8 of the New York Declaration on Forests (NYDF), which focuses on providing financial support to reduce forest emissions. It highlights a massive gap between the estimated annual funding needed to protect and restore forests (USD 45 to 460 billion) and current funding (USD 2.4 billion), while noting that deforestation-linked subsidies exceed USD 10 billion per year. While the document identifies growth in green finance, REDD+ commitments, and the availability of risk-assessment tools, it warns that systemic barriers—such as perverse economic incentives and a lack of transparency in financial institutions—continue to hinder transformational change.

• There is a severe deficit in funding for forest protection and restoration. While the annual financial requirement is estimated between USD 45 billion and USD 460 billion, actual international and domestic funding averages only USD 2.4 billion per year, representing 0.5-5% of the need. In contrast, deforestation countries have spent over USD 10 billion annually on agriculture and forestry subsidies since 2010.
• Green finance and investment tools have seen growth between 2015 and 2021. Public commitments to REDD+ increased from less than USD 1 billion in 2015 to over USD 6.7 billion in 2021, and private finance from voluntary carbon markets rose from under USD 50 million to over USD 159 million in the same period. Additionally, assets under management in ESG funds grew from USD 655 billion in 2012 to USD 1,048 billion in 2018, with the US seeing a rise from USD 5.4 billion in 2018 to USD 51.1 billion in 2021.
• Significant commitments were made at COP26 in November 2021, including a pledge by 30 financial institutions managing over USD 8.7 trillion in assets to stop investing in commodity-driven deforestation (specifically beef, soy, palm oil, pulp, and paper) by 2025. Furthermore, 12 countries committed to providing USD 12 billion in forest-related climate finance between 2021 and 2025.
• Systemic barriers and a lack of transparency persist in the finance sector. 62% of financial institutions lack deforestation policies, and among those that have them, only 40% report on their implementation. Additionally, the COVID-19 pandemic may have reversed some progress, with some of the world's largest financial institutions increasing investments in deforestation-linked companies by USD 8 billion during the early months of the pandemic.

APA

Forest Declaration Assessment (2022). Accelerating finance to reduce forest emissions. https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf

Chicago

Forest Declaration Assessment. Accelerating finance to reduce forest emissions. 2022. https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=Accelerating finance to reduce forest emissions |date=February 2022 |url=https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2022accelerating, author = {{Forest Declaration Assessment}}, title = {{Accelerating finance to reduce forest emissions}}, institution = {Forest Declaration Assessment}, year = {2022}, month = feb, url = {https://forestdeclaration.org/wp-content/uploads/2022/02/Finance-for-forest-action-Progress-since-2014.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }