2023 FOREST DECLARATION ASSESSMENT

The 2023 Forest Declaration Assessment finds that global finance for forests is severely inadequate, with 'gray' finance (subsidies driving deforestation) vastly outweighing 'green' finance. Public green finance averages USD 2.2 billion annually, less than 1% of estimated needs. Private financial institutions continue to provide trillions in financing to high-risk companies, while the voluntary carbon market faces declining demand and pricing due to integrity concerns. The report highlights a critical funding gap for Indigenous Peoples and local communities, who receive only 3% of the finance needed for tenure reform.

• Global finance for forests is significantly below the levels required to meet 2030 goals. Domestic and international mitigation and adaptation finance for forests averages USD 2.2 billion per year, which is less than 1 percent of the estimated needs to meet global forest goals by 2050.
• Public 'gray' finance, primarily agricultural subsidies, continues to dwarf 'green' finance. Between 2013 and 2018, global gray public finance flows were estimated between USD 378 billion and USD 635 billion annually, while green finance for forest protection and restoration was only USD 2.2 billion per year.
• Private financial institutions provide massive funding to companies at high risk of driving tropical deforestation. As of 2022, 150 institutions provided USD 6.1 trillion in active financing to the 350 companies with the most influence in forest-risk commodity supply chains; two-thirds of these institutions lack a single deforestation policy.
• Funding for Indigenous Peoples (IPs) and local communities (LCs) is critically insufficient. Only 3% of the annual financial needs for transformational tenure reform are being met, with total global needs for securing land rights estimated at USD 8.9 billion.
• The Voluntary Carbon Market (VCM) for forest-based credits is experiencing a decline in both issuances and retirements, driven by integrity concerns. Issuances fell from a peak of 157 million metric tons of CO2e in 2021 to 58 million by the end of Q3 2023.
• Prices for forest-based carbon credits are far too low to incentivize large-scale conservation over competitive land uses. Current prices (ranging from USD 2.75 to USD 5 in 2023) are significantly below the USD 50 to 250 per metric ton of CO2 recommended by economists to meet the Paris Agreement's 1.5°C limit.
• Jurisdictional REDD+ initiatives face significant barriers, including insufficient donor incentives and institutional readiness. Current pay-for-performance prices (USD 5-10 per metric ton of CO2) are far below the estimated USD 30-50 per ton needed to adequately protect forests.
• New regulatory frameworks in the EU, such as the EU Deforestation Regulation (EUDR) and the Corporate Sustainability Due Diligence Directive (CSDDD), are shifting corporate disclosure from voluntary to mandatory, though their impact depends on implementation and the inclusion of financial institutions.
• Alternative finance mechanisms are emerging to diversify the landscape, including debt-for-nature swaps in countries like Belize, Ecuador, and Peru, and the High Integrity Forest (HIFOR) investment initiative targeting forests with high ecological integrity.
• Article 6 of the Paris Agreement is creating new channels for sovereign forest finance, with Suriname issuing the first sovereign REDD+ credits for international trade in September 2023, followed by intentions from Honduras, Belize, and the DRC.

APA

Forest Declaration Assessment (2023). 2023 FOREST DECLARATION ASSESSMENT. https://forestdeclaration.org/wp-content/uploads/2023/10/2023Theme3_low-res.pdf

Chicago

Forest Declaration Assessment. 2023 FOREST DECLARATION ASSESSMENT. 2023. https://forestdeclaration.org/wp-content/uploads/2023/10/2023Theme3_low-res.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=2023 FOREST DECLARATION ASSESSMENT |date=2023 |url=https://forestdeclaration.org/wp-content/uploads/2023/10/2023Theme3_low-res.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment20232023, author = {{Forest Declaration Assessment}}, title = {{2023 FOREST DECLARATION ASSESSMENT}}, institution = {Forest Declaration Assessment}, year = {2023}, url = {https://forestdeclaration.org/wp-content/uploads/2023/10/2023Theme3_low-res.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }