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Forests Overview

Forests play a central role as the world confronts the challenges of climate change, food shortages, and improved livelihoods for a growing population. Forests absorb about 15% of the planet’s greenhouse gas emissions and provide essential services to the agricultural, energy, water, mining, transport and urban sectors. They help to maintain the fertility of the soil, protect watersheds, and reduce the risk of natural disasters, including floods and landslides.

At the same time, deforestation and forest degradation contribute significantly to greenhouse gas emissions, and many of the world’s remaining forests are under increasing threat because of human activities and climate change. Although the pace of deforestation has slowed in globally since the 1990s, it remains high with annual deforestation of about 13 million hectares (gross). This is only partially offset by reforestation, making the total annual net forest cover loss 5.6 million hectares—an area larger than Costa Rica.

An estimated 2 billion hectares of lost or degraded forests and landscapes could be restored and rehabilitated. If those areas were to be restored to functional and productive ecosystems, they could help deliver improved rural livelihoods and food security, greater climate resilience, and greenhouse gas (GHG) mitigation—while taking pressure off pristine forests.

Forests represent an important safety net for rural populations in times of economic or agricultural stress. 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 also an economic good, providing jobs for often rural populations with few alternative off-farm employment options. Formal employment in the forest sector has been estimated at 14 million jobs worldwide with ten times that in the informal sector. Forest industries contribute about 1% to global GDP, while in some regions and countries it is much higher (e.g. in Sub-Saharan Africa it is up to 6%)1.

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.


1. UNEP Green Economy Report, 2011.

Last Updated: Mar 26,2014

If the world is to confront the challenges of mitigating and adapting to climate change while meeting the demands of a rapidly-growing global population, it is vital to find the balance between conserving and regenerating forest areas with economic growth for poverty reduction.

The World Bank’s Forests Strategy pledges to support 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. A new Forests Action Plan that lays out how our work on forests and trees will contribute to resilient and sustainable landscapes is now underway, building on the current Forests Strategy and taking account of the evolving global context.

Last Updated: Mar 26,2014

In Brazil, World Bank budget support for sustainable environmental management resulted in a 40% decrease in annual average deforestation rate during 2008–2010 compared to the rate in 2005–2007. In addition, World Bank co-financing of the Amazon Region Protected Areas Project resulted in the protection of 20,250 km2.

In Mexico, where some 80 percent of forests are owned by indigenous and other communities, the World Bank helped fund a project to strengthen community forestry by improving forest management plans. A project evaluation found that between 2003 and 2008, jobs had increased by 27% in targeted communities and ejidos, while the net value of forest goods and services they produced increased by 36%. In 2011 the coverage of this support was extended to all 32 states in Mexico. By late 2012, similar support in Lao PDR resulted in over 400,00 people (50% were women) benefiting from improved management of 1.3 million hectares of forests.

In the Congo Basin, which is home to the world’s second largest moist tropical forest, dialogue and engagement with client countries has led to progress in the way forest rights are allocated. For example, in Cameroon, legal and regulatory reforms that were part of a wider concession reform effort resulted in the first legal recognition of community forests in any part of West Africa. In the Democratic Republic of Congo, a legal review of concessions led to a significant reduction in the area under concession management, to 9.7 million ha in 2008, from 43.5 million ha in 2002. At the same time, steps were taken to bring communities into decision-making processes in forest management, to clarify the rights of traditional forest users. And in Gabon, around 4.7 million ha in forest concessions were cancelled, creating the opportunity to develop new approaches to sustainable forest management.

In Liberia, the World Bank, through the Program on Forests, stepped in to co-finance the roll out of a "chain of custody" system that tracks timber from extracted from the largest remaining blocks of Upper Guinea forests to the point of export through barcodes and data forms. That system assisted in securing more than $27 million in net tax revenue for the state in 2008–2012.

In Ethiopia’s Great Rift Valley, the World Bank partnered with World Vision to pilot an approach that was both integrated and inclusive and led to large-scale landscape restoration with significant livelihood and resilience outcomes. Forest cooperatives were created to oversee the reforestation of the Humbo mountain area by encouraging natural regeneration and limiting wood, charcoal and fodder extraction, while creating opportunities for additional income. The restored project area provides protection against dangerous landslides and improved water availability for more than 65,000 people. The project is expected to sequester over 880,000 metric tonnes of carbon dioxide-equivalent over 30 years, with the World Bank purchasing 165,000 metric tonnes worth of carbon credits through its BioCarbon Fund.

In Albania, the World Bank worked with the government on a forest project that showcased the benefits of this landscape approach. By integrating forest, pasture, and agriculture management, the Bank-backed initiative led to reduced carbon emissions, the protection of important watersheds, and an increase of 28 percent in incomes in some areas from forests and agriculture. The project was successful in bringing more than 775,000 ha of land under the management of local communities.

Last Updated: Mar 26,2014

Over the last decade, the World Bank, the European Union and other partners have made significant strides in opening the space for dialogue and reform by backing Forest Law Enforcement and Governance (FLEG) processes in different parts of the world. The Program on Forests (PROFOR), hosted by the World Bank, has also made forest governance one of its priority issues, providing technical assistance to improve the monitoring of forest activities and helping create consensus and political will around priority reforms.

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.

The Bank has also explored a wide range of opportunities to help countries reduce greenhouse gas emissions from deforestation and forest degradation, and to conserve, sustainably manage and enhance forest carbon stocks. This approach, known as REDD+, will likely rest on a complex mix of multilateral and bilateral assistance, civil society efforts, private sector initiatives and carbon markets.

The Bank serves as the Trustee and the Secretariat of the Forest Carbon Partnership Facility (FCPF), a global partnership that is helping countries draft REDD+ readiness plans and will provide carbon payments to countries that meet certain targets. The Bank is also the implementing organization, together with other multilateral development banks, of the Forest Investment Program (FIP) which supports the efforts of developing country to reduce deforestation and forest degradation and promote sustainable forest management that leads to REDD+. The Bank also finances pilot investments for reforestation and soil carbon through the BioCarbon Fund, a public-private initiative that mobilizes resources for pioneering projects that deliver emission reductions, while promoting biodiversity conservation and poverty alleviation.

Last Updated: Mar 26,2014
Deforestation Trends in the Congo Basin

The countries of the Congo Basin face the dual challenge of developing local economies and reducing poverty while limiting the negative impact of growth on the region’s natural capital. Read More »

Around The Bank Group

Find out what the Bank Group's branches are doing on forests.