The value of global forest restoration

The value of global forest restoration

Improving the climate and local ecosystems through forest restoration, while also earning private returns to land-owners and local communities is a very real opportunity, as identified in a recent report by Frontier and Terraformation.

Matthew Bell, Frontier Economics Director and former CEO of UK Climate Change Committee said:

“The business case for restoration is increasingly clear. Landowners and local communities stand to earn hundreds of billions of dollars in the coming decades, alongside the wider social and environmental reasons to restore marginal land. Acting to reduce climate change is increasingly a business proposition across many sectors of the global economy, as well as a social imperative. This analysis adds forestry to the growing list of areas where, with suitable government action, there are significant future business opportunities.”

Significant private returns accompany considerable social value. Frontier estimate that returns from tropical forests could range from about $5,000 to $20,000 per hectare and temperate forest returns have a net present value of $3,000 to $8,000 per hectare.

Renewed focus on restoration could also have a significantly positive impact for owners of marginal land and surrounding rural communities, who often have low incomes, as well as for nature and the climate. The restored land offers a broad range of wider services. These include: shade, recreational space, water filtration, flood risk reduction and likely climate regulation above the value monetised through carbon credits.

The actual returns that are earned through global forest restoration depend on factors including:

  • Nature: speed of carbon sequestration, ability to grow other products alongside trees, natural availability of water and other inputs
  • Policy: willingness to pay for wider forestry services such as the reduction in flood risk, strengthening of carbon markets (e.g. through the Paris Agreement and the upcoming UN climate negotiations “COP26”), local land-ownership rights and planning decisions.
  • Market developments: the prices paid for forestry products and the role of new trade agreements, local cost of labour and certification of timber and global markets in ecosystem services (like carbon sequestration).
  • Technological advances: the development and deployment of ever lower cost seed-banks, plant nurseries, water filtration systems and related technologies that support land restoration.

To read the full report visit the Terraformation website or click below.

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The Value of Restoration - Terraformation and Frontier Economics