Forest Declaration Assessment

The report identifies systemic failures in the global financial architecture that drive deforestation and proposes five priority actions: reforming multilateral public finance, overhauling sovereign debt, scaling high-impact funding mechanisms like the Tropical Forest Forever Facility, repurposing harmful agricultural subsidies, and embedding nature-related risks into financial regulatory frameworks.

• The current international financial system creates a conflict for developing countries between economic growth and environmental protection, often forcing a priority on export-led industries to service debt at the expense of forest health.
• Existing forest finance mechanisms, specifically REDD+, have failed to reach the necessary scale, with payments for jurisdictional interventions often ranging from USD 5-10 per metric ton of CO2e, significantly below the estimated cost-effective implementation range of USD 30-50.
• Private financial institutions continue to fund deforestation, with USD 6.1 trillion in active financing to companies at risk of driving tropical deforestation through agricultural commodity production as of 2023.
• The allocation of the IMF's Special Drawing Rights (SDRs) is skewed toward wealthy nations, with low-income developing nations receiving only 1.4% of the allocation in 2022 despite their higher need for liquidity.
• Developing countries face a massive debt burden, collectively owing an estimated USD 11 trillion plus USD 3.9 trillion in debt servicing, which pressures nature-rich countries to engage in extractive activities for short-term stability.
• Repurposing environmentally harmful agricultural subsidies could potentially cover 40% of the USD 700 billion required to reverse the global biodiversity crisis.
• There is a critical need to integrate nature-related risks into banking regulations, as voluntary measures have proven insufficient; for example, by early 2025, eleven banks from the U.S. and Canada abandoned the Net Zero Banking Alliance.

APA

Forest Declaration Assessment (2025). Forest Declaration Assessment. https://forestdeclaration.org/wp-content/uploads/2025/03/Transforming-forest-finance-2025.pdf

Chicago

Forest Declaration Assessment. Forest Declaration Assessment. 2025. https://forestdeclaration.org/wp-content/uploads/2025/03/Transforming-forest-finance-2025.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=Forest Declaration Assessment |date=March 2025 |url=https://forestdeclaration.org/wp-content/uploads/2025/03/Transforming-forest-finance-2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2025forest, author = {{Forest Declaration Assessment}}, title = {{Forest Declaration Assessment}}, institution = {Forest Declaration Assessment}, year = {2025}, month = mar, url = {https://forestdeclaration.org/wp-content/uploads/2025/03/Transforming-forest-finance-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }