Forests play a critical role in transitioning to a green economy. Investing in sustainable forest management, conservation, and payment schemes can contribute to green economic growth, poverty reduction, and environmental protection. The document recommends catalyzing public and private investments in forests through policy reforms, capacity building, and international cooperation mechanisms such as REDD+ to generate jobs and economic benefits while reducing deforestation and degradation.

1. Forests in a

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What is a Green Economy?
A Green Economy is one that results in
increased human well-being and social
equity, while significantly reducing
environmental risks and ecological
scarcities.

3. 3
Why a Green Economy?
• A Green Economy is an economic vehicle for sustainable
development.
• A Green Economy has strategies to end the persistence
of poverty.
• It is a central theme of Rio+20.
• It is a new economic paradigm that can drive growth of
income and jobs, while reducing environmental risk and
scarcity.

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Forests in a Green Economy
• Forests are a critical link in the transition to a green
economy.
• The International Year of Forests 2011 and World
Environment Day, are unprecedented opportunities for
governments, civil society and business to promote
forests as critical contributions to a green economy
transition via sustainable management, forest
conservation and payment schemes.

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Forests in a Green Economy
The UNEP report:
• Provides a roadmap for “greening” the forest sector that
will contribute to the discourse in the lead up to Rio+20.
• Sets out options for policy makers to enable a
transformation of the forest sector.
• Examines the conditions for significantly increasing
investments in forests and the underlying goods and
services forests provide.

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Why Forests?
• Forests generate income and
provide employment.
• Forests provide nutrition,
reduce vulnerability and
diminish energy scarcity.
• Trends in deforestation are
still alarmingly high.
• The current approach to
management of forests is a
‘frontier’ approach.

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In a Green Economy…
• Public and private investments in forests are catalyzed
and supported by targeted policy reforms, regulation
changes and capacity building.
• Forests are managed and invested in as an asset class
and are important factors of production.
• International mechanisms increase investments in
forests.
• Forest management hinges critically on an effective and
transparent accounting system.

8. 8
Investments in the Forest Sector
• The Green Economy Report
suggests that an average
annual additional investment of
US$ 40 billion is required to
halve global deforestation by
2030, and increase
reforestation and afforestation
by 140 per cent by 2050,
relative to business as usual
(BAU).

9. 9
Investments in the Forest Sector
• Targeted investments in forests
could generate about 10 million
new jobs around the world.
• Most of this increase occurs via an
increase in small and medium sized
enterprises.
• In the forest sector, 80-90 per cent
of the enterprises are small and
medium sized.
• SMEs currently provide more than
50 per cent of forest sector
employment in many countries.

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Enabling Conditions
Role of the International
community
• Agree on an international
REDD+ scheme
• Generate knowledge on forest
ecosystem services
• Stimulate engagement from
the commercial financial sector
• Re-invest income from
royalties and taxes into the
forest sector

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Enabling Conditions
Role of Governments
• Guarantee adequate returns
on risk-adjusted investment
• Devise transparent and
efficient procedures
• Agree on a national vision for
ways and means in which
forests can contribute to
development
• Employ market-based
instruments to promote green
investment and innovation

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Enabling Conditions
Role of Business and Financial
Institutions
• Investing in forest projects
• Providing independent, easily
accessible and verifiable risk
assessments
• Leveraging resources and
providing debt finance
• Insuring and guaranteeing
investment and risks particular to
the forest sector
• Applying conventional financial
instruments to the forest sector
FSC Canada

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Success Stories
• India – The country recently approved a national mission for a
Green India.
• Japan – The Metropolitan Government Bureau of Waterworks in
Tokyo manages forests in the upper reaches of the Tama River to
increase recharge capacity.
• Costa Rica – Forest related interventions have led to economic
growth and a dramatic increase in forest cover. By 2010, it had
recovered up to 51 per cent of the country’s land area.
• Vietnam - The restoration of natural mangrove forests at the cost of
US$ 1.1 million resulted in annual savings of US$ 7.3 million in sea
dyke maintenance.

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Payment for Ecosystem Services
Payment for Ecosystem Services (PES)
• Voluntary transactions which compensate ecosystem
service providers (for instance forest landowners) for
providing watershed protection, carbon storage,
recreation, biodiversity or other ecosystem services.
Ecuador - The local government in the
town of Pimampiro pays US $6-$12 per
hectare per year to a small group of
farmers to conserve forest and natural
grassland in the area surrounding the
town’s water source.

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REDD+
• Reducing Emissions from Deforestation and Forest
Degradation (REDD+) recognizes the role of forest
degradation and deforestation in limiting GHG emissions
with conservation, sustainable management, and
enhancement of forest carbon stocks as eligible activities
Brazil – The Amazon Fund receives
conditional funding from Norway to
achieve deforestation reduction
targets
Indonesia - In 2010, the country
received a US$ 1 billion from Norway
in return for agreed measures to
tackle deforestation and degradation.

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Conclusion
• Forest management cannot be left entirely to markets.
• Governments and the international community need to
undertake policy reforms to create incentives to
maintain and invest in forests.
• Businesses and financial institutions need to be active in
promoting investments in the forest sector
Thank You