Forest Declaration Assessment

The report examines a variety of innovative forest finance instruments, including bonds, forest funds, debt reduction mechanisms, market-based tools, and community-led funds. It highlights the systemic gap between 'gray' finance (funding for deforestation-driving activities) and 'green' finance, arguing that current public funding is insufficient. The document provides case studies from countries such as Brazil, Colombia, Indonesia, and Costa Rica to illustrate the practical application of these tools and proposes six principles to maximize the impact of forest finance by 2030.

• There is a significant disparity between finance that threatens forests and finance that protects them; while international 'green' finance pledges for 2021-25 average less than USD 6 billion per year, 'gray' public finance flows from 2013-18 were estimated between USD 378 to USD 635 billion per year globally.
• Bonds are increasingly used to leverage forest finance, including green, sustainability, and sustainability-linked bonds. For example, Brazil issued two Sovereign Sustainable Bonds in 2023 and 2024, each raising USD 2 billion to support forest conservation and combat deforestation.
• Forest funds, such as National Forest Funds (NFF), provide stable public finance by earmarking revenues from taxes or fees. Costa Rica's National Forestry Financing Fund (FONAFIFO) used a 3.5 percent fossil fuel tax to provide USD 500 million from 1997-2018 to approximately 19,000 landowners for rainforest protection and restoration.
• Debt-for-nature swaps (DNS) allow countries to reduce external debt in exchange for nature-positive investments. While they have restructured around USD 3 billion in debt since 2015, their overall impact remains marginal compared to the trillions paid in debt services by low and middle-income countries.
• New market-based mechanisms are emerging to value non-carbon benefits. The High Integrity Forest Investment Initiative (HIFOR) targets high-integrity tropical forests not under immediate threat, while biodiversity credits, such as Terrasos' habitat banks in Colombia, attach economic value to biodiversity restoration and preservation.
• Indigenous Peoples and local community-led funds are emerging as a decolonial alternative to top-down finance, though they receive a tiny fraction of total funding. For instance, only 7 percent of the USD 1.7 billion COP26 pledge reached IP and LC groups directly.
• The Tropical Forest Forever Facility (TFFF), proposed by Brazil at COP28, aims to reward countries for the scale of land conserved rather than emissions reductions, with a target to leverage USD 250 billion from sovereign wealth funds.

APA

Forest Declaration Assessment (2024). Forest Declaration Assessment. https://forestdeclaration.org/wp-content/uploads/2024/09/2024EmergingFinance.pdf

Chicago

Forest Declaration Assessment. Forest Declaration Assessment. 2024. https://forestdeclaration.org/wp-content/uploads/2024/09/2024EmergingFinance.pdf.

Wikipedia

{{cite report |author=Forest Declaration Assessment |title=Forest Declaration Assessment |date=September 2024 |url=https://forestdeclaration.org/wp-content/uploads/2024/09/2024EmergingFinance.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{forestdeclarationassessment2024forest, author = {{Forest Declaration Assessment}}, title = {{Forest Declaration Assessment}}, institution = {Forest Declaration Assessment}, year = {2024}, month = sep, url = {https://forestdeclaration.org/wp-content/uploads/2024/09/2024EmergingFinance.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }