Finance for forests

The report finds that global forest finance is not on track to meet 2030 goals, with current mitigation finance averaging USD 2.3 billion per year—less than 1 percent of the estimated USD 460 billion annual requirement. It highlights a stark imbalance where 'grey finance' (harmful investments) significantly outweighs 'green finance,' and notes that Indigenous Peoples and local communities remain severely underfunded. While 2021 pledges could quadruple annual finance to USD 9.5 billion, this remains insufficient. The report also analyzes the limited impact of voluntary and compliance carbon markets and the slow progress of REDD+ frameworks.

• Global forest finance is severely insufficient to meet 2030 goals, with an estimated annual cost of up to USD 460 billion to protect, restore, and enhance forests. Current domestic and international mitigation finance averages only USD 2.3 billion per year, which is less than 1 percent of the total need.
• Public 'grey finance'—investments that potentially harm forests—vastly outweighs 'green finance.' Between 2010 and 2020, grey public finance totaled over USD 270 billion, consisting of USD 257 billion in domestic and USD 13.4 billion in international finance, creating a ratio of over 10:1 compared to green public finance.
• Finance pledges made in 2021, including those from COP26, total USD 36.2 billion for 2021-25. If fully delivered, these would increase annual forest finance to USD 9.5 billion, yet this is still up to 50 times lower than the actual investment needs.
• Indigenous Peoples and local communities (IPs and LCs) are critically underfunded despite their role as effective forest stewards. Only 1.4 percent of total public climate finance in 2019-20 was targeted toward their needs, and only 3 percent of the annual financial need for transformational tenure reform is met.
• The private financial sector has failed to implement adequate deforestation safeguards. Approximately two-thirds of the 150 major financial institutions most exposed to deforestation lack a single policy covering forest-risk investments, leaving USD 2.6 trillion in high-risk commodity investments unprotected.
• Voluntary carbon markets (VCM) saw significant growth in 2021, with traded volumes increasing by 89 percent and forestry/land use projects accounting for 45 percent of issued credits. However, the average price of these credits (USD 4.7 to 15 per ton of CO2) is far below the USD 50 to 250 range needed to meet Paris Agreement targets.
• REDD+ programs have generally failed to yield reductions in deforestation, with most initiatives remaining in the 'readiness' stage. Between 2010-20, while USD 6.9 billion was committed via multilateral funds and bilateral donors, only half of the committed finance has been disbursed.

APA

Forest Declaration Assessment (2022). Finance for forests. https://forestdeclaration.org/wp-content/uploads/2022/10/2022Theme3_low-res.pdf

Chicago

Forest Declaration Assessment. Finance for forests. 2022. https://forestdeclaration.org/wp-content/uploads/2022/10/2022Theme3_low-res.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=Finance for forests |date=October 2022 |url=https://forestdeclaration.org/wp-content/uploads/2022/10/2022Theme3_low-res.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2022finance, author = {{Forest Declaration Assessment}}, title = {{Finance for forests}}, institution = {Forest Declaration Assessment}, year = {2022}, month = oct, url = {https://forestdeclaration.org/wp-content/uploads/2022/10/2022Theme3_low-res.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }