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3 The case for investing in greening
the forest sector
As indicated in the last section, there are promising
developments such as certification of sustainable forest
management, targets to increase protected areas and
the growing momentum of PES and REDD+ schemes.
But without a major change in the recognition given to
the full suite of forest ecosystem services, in particular in
climate negotiations, and in the absence of improvements
in the agriculture sector, loss of primary forest is likely to
continue. Protected areas will continue to expand but a
large proportion will not be effectively enforced. The
forest sector will meet the market demand for timber
through planted forests and efficiency improvements
in processing, but pressures on natural forests from
other sectors, agriculture in particular, will continue,
exacerbated by climate change. As a result, ecosystem
services will continue to be lost.
Additional resources and policies are therefore needed
to “internalise” the value of forest ecosystem services for
forest landholders and ensure forests are worth more
standing than cut (Viana 2009). Investments targeted
at increasing the profitability of sustainable harvesting
techniques and making tree planting worthwhile can
also make a contribution. This section reviews a range
of investment options for greening the forest sector and
identifies the economic, social, and environmental effects
of these options.
3 1 Options for green investment
in forests
Some broad categories of green private and public
investments can be distinguished for the main forest
types, including agroforestry, as shown in Table 5. Green
investment can be targeted at reversing the loss of forest
area by conserving existing areas of primary forest or
promoting expansion of forests through regeneration
and reforestation. Green investment can also be directed
to improving management in existing forests and
agroforestry systems to ensure they continue to provide
a wide range of ecosystem services. But such investment
could only be considered green if it ensured that the
forests conserved, established or restored met principles
of sustainable forest management, balancing the needs of
different stakeholders. For example, creating a protected
area that displaces forest-dependent communities would
not meet the principle of supporting relevant socioeconomic
functions. Moreover, creating a protected area
Forests
does not guarantee enforcement. Similarly, extending the
forest area through tree planting may be contentious if
it uses a large amount of external inputs and directly or
indirectly displaces local people from their land.
Some of the green investments listed in Table 5 are
straightforward to quantify, although there will be
considerable variation by location and species. Some of
the public sector investments are not well-documented,
in particular the amounts being spent on controlling
illegal logging.
Because of the public-good nature of some forest
ecosystem services, the private sector and holders
of forested land are not always able to perceive a
sufficient incentive to make green investments in
Investment
Forest type
Private* Public**
Ecotourism development Create new protected areas
Primary forest
Private nature reserves
Pay landowners to protect
Improve enforcement of
protected areas
Pay forest landholders to
watershed
conserve forests
Buy out logging concessions
Reduced impact logging and
other forest management
improvements
Incentives for improved
forest management
Natural modified
forest
Certification to sustainable
forest management
standards
Support establishment of
certification systems
Control illegal logging
Reforestation and afforesta- Incentives for reforestation/
tion for production
afforestation
Planted forest
Improve management of
planted forests
Incentives to improve
management
Reforestation to protect
ecological functions
Extend the area with
agroforestry systems
Incentives to landholders
Agroforestry
Improve management of
agroforestry systems
Incentives to improve
management
Technical assistance
* Private could also include investments made by communities
** Some of the public investments listed here may also be made by the private sector, often at a
more limited scale.
Table 5: Green investment options for various
forest types
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