Forests and trees contribute to economic growth, employment, food security, and energy generation, and are key to helping countries respond to climate change.

Forests support rural economies in many countries, providing jobs for populations with few alternative off-farm employment options, producing more than 5,000 types of wood-based products, and generating annually a gross value added of just over US$600 billion, about 1% of global GDP (in some countries that contribution is much higher, reaching, for example, 6% of GDP in Cameroon).

Forest goods also represent an important “hidden harvest” for rural populations, keeping many out of extreme poverty. About 350 million people who live within or close to dense forests depend on them for their subsistence and income. Of those, about 60 million people (especially indigenous communities) are wholly dependent on forests. They are key custodians of the world’s remaining intact natural forests.

Forests are an important source of energy for many countries; 65% of the total primary energy supply in Africa comes from solid biomass such as firewood and charcoal. Wood-based fuel will continue to represent a principle source of energy in low-income countries and is increasingly viewed as a "green" alternative to fossil fuels in developed countries.

Forests generate essential services to sustain key sectors (agricultural, energy, water, mining, transport and urban sectors), by helping to maintain the fertility of the soil, protect watersheds, provide habitat for a variety of species, and reduce the risk of natural disasters, including floods and landslides.

One of forests’ most crucial services is their capacity to slow climate change by absorbing CO2 released from the burning of fossil fuels through photosynthesis. At the same time, deforestation, forest degradation and land use change contribute about 12% of the world’s greenhouse gases, eroding a critical carbon sink. Many of the world’s remaining forests are under increasing threat due to agriculture expansion, timber extraction, fuelwood collection and other activities. Although the pace of global deforestation has slowed since the 1990s, it remains high with about 13 million hectares (gross) lost each year. This is partially offset by reforestation, making the total annual net forest cover loss 5.6 million hectares—an area larger than Costa Rica.

Some 2 billion hectares of lost or degraded forests and landscapes could be restored and rehabilitated to functional and productive ecosystems. This would help generate economic opportunities in rural areas, deliver improved rural livelihoods and food security, greater climate resilience and mitigate greenhouse gas emissions while taking pressure off pristine forests.

Last Updated: Sep 26,2016

To meet the wood product, energy and food demands of a rapidly-growing global population, and meet climate adaptation and mitigation goals, forests must be managed sustainably to provide multiple benefits for economic development and ecosystem services. As such, the World Bank’s Forests Strategy supports countries in their efforts to harness the potential of forests to reduce poverty, better integrate forests into their economies, and protect and strengthen the environmental role forests play—locally and globally.

Over the last five years (between Fiscal Years 12-16), the World Bank committed a total of US$1.1 billion to forests, from IDA/IBRD and Trust Funds, and US$1 billion were invested by the International Finance Corporation (IFC), the Bank’s private lending arm, in forest product companies.

In April 2016, the WBG launched its Forest Action Plan for Fiscal Years 2016-2020 that focuses on two priority areas: investments in the sustainable forest management; and “forest-smart” interventions in which the WBG will aim to take a holistic look at forest landscapes, so that its work in sectors like agriculture, transport and energy does not erode forest capital and generates instead positive forest outcomes. The Plan is underpinned by three cross-cutting themes that are key for progress on forests: climate change and resilience, rights and participation, and institutions and governance. Maintaining and restoring healthy forests is key to mitigating climate change and building resilient landscapes. Good forest governance and strong institutions are core conditions for sustainably managed forests. Clear ownership, access, and management rights over forests are also vital to build forest-dependent communities’ assets, create jobs and manage forest resources more sustainably. Continuing dialogue and exchange with civil society, private sector and other groups is central to the implementation of the Plan. 

Increasingly, the World Bank Group strives to combine public and private financing, as well as resources from innovative forest-related funds  such as the Forest Carbon Partnership Facility, the Forest Investment Program, the BioCarbon Fund Initiative for Sustainable Forest Landscapes, and the Global Environment Facility, in a coherent programmatic approach that support, among other things, efforts to reduce greenhouse gas emissions from deforestation and forest degradation, and to conserve, sustainably manage and enhance forest carbon stocks (an approach known as REDD+). In Mexico, for example, the Forest and Climate Change project taps about USD$460 million from multiple sources of forest finance to advance sustainable forest management and climate action through community forestry.

Private sector commitment and action around deforestation free commodity supply chains will be critical to conserve forest resources and reduce risks for businesses who rely on commodity supplies. In Ghana, for example, the Bank is working with the IFC in the cocoa sector to promote private sector practices that reduce deforestation and degradation in the high forest zone. Other public-private compacts on reducing deforestation from supply chains are underway in Zambia around cotton production, in Ethiopia around coffee production, and in Liberia around rubber production.

Last Updated: Sep 26,2016

In Mexico, where some 80% of forests are owned by indigenous and other communities, the World Bank has been supporting the Government with a series of projects that have increased sustainable forest management, forest-related jobs and the net value of forest goods and services. Since 2012 this support has been extended to all 32 states in Mexico, bringing an additional 2 million hectares of forests under sustainable management.

By late 2012, similar support in Lao PDR resulted in over 400,000 people benefiting from improved management of 1.3 million hectares of forests.

In Vietnam, more than 43,000 households have received access to micro finance and technical support to establish over 76,500 hectares of forest under a World Bank-supported project from 2005-2015.

In the Democratic Republic of Congo, a component of the Pro-Route project was dedicated to participatory land use planning and sustainable livelihood development to reduce the rehabilitated road's negative impacts on natural forests. Activities included participatory mapping of existing forest use, support for income-generating activities, and agricultural intensification. Also in the DRC, tools and standards for extractive industries are being developed to reduce GHG emissions from deforestation and forest degradation during exploration, exploitation, and rehabilitation activities. 

In the Republic of Congo, a recently finalized roadmap for balancing mining development and forest conservation is supporting land use planning for forest-smart development outcomes. 

In Senegal, the Sustainable Participatory Energy Management Project (PROGEDE by its French acronym) helped combat Senegal's rapidly growing demand for household fuels and the associated degradation of forests and the rural environment. The Sustainable Woodfuels Supply Management Component of the project directly benefited some 250,000 people and established a sustainable incremental income from wood and non-wood products of about US$12.5 million per year, equivalent to US$40,000 on average per participating village. Of that total, more than US$3.7 million (30 percent) resulted from women-led economic activities. 

In Tunisia, a forest and rangeland ecosystem project guided by a national silvo-pastoral strategy is improving forest management practices. 

In Liberia, the World Bank, through the Program on Forests, helped to roll out of a "chain of custody" system that tracks timber from forests to the point of export through barcodes and data forms. That system combated illegal logging and assisted in securing more than US$27 million in net tax revenue for the state in 2008–2012.

In Belarus, the World Bank provided support for the formulation of policies and strategic planning underpinning the development of the countries afforestation capacity, yielding an increase in forested areas from 35 percent of the country’s territory in 1994 to over 39 percent in 2013. The Bank also supported activities against illegal logging and associated forest-product sales.

In Kazakhstan, the Forest Protection and Reforestation Project rehabilitated more than 46,000 hectares of forest degraded by extensive forest fires, installed a new state-of-the-art fire detection system, and established new community-based forest management approches. 

In Brazil, local communities designed a project that is implementing agroforestry initiatives based on native and adapted fruits, establishing processing units for agriculture and non-timber forest products, and assisting in the production and commercialization of handicrafts in the Cerrado region.


Last Updated: Sep 26,2016

The World Bank works with a wide range of stakeholders and partners at the country, regional, and global levels. The World Bank places special emphasis on partnerships that can deliver operational support to client countries through coordinated efforts. 

Platforms established under the Forest Carbon Partnership Facility and Forest Investment Program (and its associated Dedicated Grant Mechanism for Indigenous Peoples and Local Communities) have deepened the World Bank's engagement with a variety of stakeholders involved in the forest sector. The Program on Forests (PROFOR), a multi-donor partnership hosted by the World Bank, generates forest-related knowledge that helps inform World Bank forest sector investments. 

Through the European Neighborhood and Partnership Instrument East Countries Forest Law Enforcement and Governance II Program (ENRI FLEG II), the World Bank supports Armenia, Azerbaijan, Belarus, Georgia, Moldova, Russia and Ukraine in their efforts to improve forest law enforcement and governance. 

Through its private sector arm, the International Finance Corporation, the Bank Group also encourages responsible corporate investments across the forest products supply chain and works to create a more level playing field for legitimate forest-sector enterprises that adopt sustainable forest management practices.


Last Updated: Sep 26,2016

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