Forests contribute to poverty reduction, economic growth and employment, and generate essential ecosystem services that sustain key sectors such as agriculture, energy, and water. Forests also help countries respond to climate change.
Forest goods provide an important “hidden harvest” for rural populations, keeping many people out of extreme poverty. About 350 million people who live within or close to dense forests depend on them for their subsistence and income. Forests are an important aspect of rural livelihoods, with rural households living near forested areas deriving as much as 22 percent of their income from forest sources according to the Poverty and Environment Network (PEN). This contribution is greater than that of wage labor, livestock, self-owned businesses or any other category aside from crops.
Forests support rural economies in many countries and create jobs and wealth for populations with few alternative off-farm employment options. Forests produce more than 5,000 types of wood-based products, and generate an annual gross value add 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).
Healthy forests provide critical ecosystem services important to people and economies such as habitat for biodiversity, provision of drinking water, water and climate cycle regulation, erosion prevention, crop pollination, soil fertility, and flood control. For instance, more than three-quarters of the world’s food crops rely at least in part on pollination by insects and other animals, and up to US$577 billion worth of annual global food production relies directly on pollinators. Biodiversity is essential to ecosystem health and the provision of these services. However, according to the IPBES, the rate of species extinctions is accelerating, with severe impacts on people worldwide. About one million animal and plant species are now threatened with extinction, many within decades.
Forests provide a critical carbon sink to slow climate change, however deforestation and forest degradation contribute about 12% of the world’s greenhouse gas emissions. The recent IPCC special report on Climate Change and Land affirmed that planting forests and protecting existing forests is key to all pathways for limiting global warming to 1.5oC or well below 2oC. Investment in planting trees and forest conservation is urgently needed as many of the world’s remaining forests are under increasing threat due to agriculture expansion, timber extraction, fuelwood collection and other activities.
Last Updated: Oct 06,2019
The World Bank Group 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. In April 2016 the World Bank Group launched a 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 World Bank Group takes a holistic look at forest landscapes, so that its work in sectors like agriculture, transport and energy does not erode forest capital but instead generates positive forest outcomes. The World Bank Group is increasingly supporting its country clients to implement such an integrated approach.
Since the adoption of the Forest Action Plan in 2016, the World Bank’s active forest portfolio increased from US$1.8 billion (FY16) to US$3.05 billion (FY19).
The FAP 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. Engaging with vulnerable groups and considering gender differences in the use of, access to, and benefits from forest landscapes is important for program results and successes in addressing deforestation in many countries.
In September 2019, the World Bank launched PROGREEN, a new global partnership for sustainable and resilient landscapes. PROGREEN will help countries meet their national and global sustainable development goals and commitments related to forests, biodiversity and landscapes in a cost-effective manner through integrated landscape programs. Germany is the seed funder for PROGREEN and contributed €200 million to kickstart the program. Other key donors have shown strong support for PROGREEN and the aim is to ultimately raise about US$1 billion.
Last Updated: Oct 06,2019
In Brazil, the World Bank is supporting the government in better managing and conserving the Cerrado forest, the second largest biome in South America, which is being deforested twice as quickly as the Amazon due to land clearing for agriculture and cattle ranching. The Cerrado is a driver of economic growth and important for food security, biodiversity conservation, water regulation and carbon sequestration. Investments underway are addressing drivers of deforestation by clarifying land rights, making agricultural production more sustainable, providing monitoring and information, and building capacity to detect, prevent and fight forest fires. Results to date include:
In China, the Shandong Ecological Afforestation Project (2010-2016) planted trees on 66,915 hectares of barren mountainous slopes and saline coastal areas, increasing forest cover, reducing soil erosion, and improving the environment and biodiversity. The project has:
The results of the project encouraged the government to establish 84,000 hectares of project model plantations on degraded sites outside the project area.
In Mozambique, the forestry sector employs 22,000 people and accounts for nearly three percent of GDP. Around 140,000 hectares of forest are lost each year and the World Bank is supporting the government in mobilizing resources to sustainably manage the forest sector through an integrated forest and landscape management portfolio. Through technical assistance, on-the-ground investments, results-based finance, and analytical work, the portfolio is:
In Mexico, where some 60 percent of forests are owned by indigenous and local 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. Under the Forests and Climate Change Project, this effort was extended to all 32 states in Mexico, supporting an additional 1,000 communities and bringing 2 million hectares of forests under sustainable management. This $460 million project, completed in February 2019, tapped multiple sources of forest finance to strengthen community institutions and knowledge of forest management and conservation while also developing alternative sustainable sources of income, including through REDD+. Now, the Strengthening Entrepreneurship in Productive Forest Landscapes Project is building on the project’s successes and ensuring continuity in the areas of community forest management and Payment for Environmental Services (PES). It also supports innovative new approaches, including promoting the integration of productive forest management activities with forest conservation and restoration activities in the same area to increase the economic and environmental benefits of project interventions, and focusing on productivity to enable forest-dependent people and enterprises to more fully reap the benefits of forest landscapes. To date, the project has brought an additional 180,000 hectares of land under integrated landscape management practices and benefited 33,800 people. The project also complements a wider forest-sector agenda, integrating a range of instruments, including technical assistance to Mexico’s Forest Commission and the preparation of an FCPF Carbon Fund Emissions Reduction Program that could potentially leverage up to US$50 million in payments to the country for results linked to avoided deforestation.
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 plantations under a World Bank-supported project from 2005-2015.
In Belarus, the World Bank provided support for the formulation of policies and strategic planning underpinning the development of the country’s 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 Liberia, the World Bank, through the Program on Forests, helped roll out a "chain of custody" system (COCS) 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 $27 million in net tax revenue for the state in 2008–2012.
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 approaches.
In the Democratic Republic of the Congo (DRC), the Pro-Route project reduced potential negative impacts on forests from rehabilitating a road through a forest-smart development approach that included participatory mapping of existing forest use, support for income-generating activities, and improved agricultural productivity to reduce agricultural expansion.
In the Republic of Congo, a recently finalized roadmap for balancing mining development and forest conservation supports 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 $12.5 million per year, equivalent to $40,000 on average per participating village. Of that amount more than $3.7 million (30 percent) resulted from women-led economic activities.
In Moldova, where the majority of poor communities depend on agriculture for their livelihoods, the Moldova Agriculture Competitiveness Project is increasing the use of sustainable land management practices like forestry shelter belts, which can limit soil erosion and sequester carbon, while contributing to greater returns for farmers.
Emission Reduction Payment Agreements (ERPAs)
DRC, Ghana and Mozambique – African countries with globally significant forest resources – have recently signed landmark agreements with the World Bank that reward community efforts to reduce carbon emissions by tackling deforestation and forest degradation. Together, these three agreements, known as Emission Reductions Payment Agreements, unlock performance-based payments of up to US$155 million. The payments will come from the Forest Carbon Partnership Facility Carbon Fund, whose Secretariat is hosted by the World Bank. Several other countries are expected to finalize similar agreements in the coming months.
Last Updated: Oct 06,2019
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.
In September 2019, the World Bank launched PROGREEN, a new global partnership for sustainable and resilient landscapes. PROGREEN brings together sectors that are the main drivers of deforestation and forest and land degradation – such as agriculture, infrastructure, and extractives – to work together with the shared goal of creating sustainable landscapes. PROGREEN enables impact at scale by reorienting national policies (fiscal, governance, trade and financial sector policies and institutions) to create incentives for sustainable landscape management practices such as responsible commodity value chains, sustainable land management and nature-based solutions. Germany contributed €200 million to kickstart the program and other key donors have shown strong support for PROGREEN.
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.
The World Bank is the lead agency of the Global Partnership on Wildlife Conservation and Crime Prevention for Sustainable Development, also known as the Global Wildlife Program (GWP), a $213 million grant program by the Global Environment Facility (GEF). Launched in 2015, the GWP has projects across 29 countries in Asia, Africa and Latin America & the Caribbean. The program focuses on designing and implementing national strategies to help countries combat illegal wildlife trafficking, secure wildlife habitats, promote wildlife-based economies and improve landscape-level management.
The World Bank is a member of the Collaborative Partnership on Forests, a group of 15 international organizations and secretariats with substantial programs on forests that coordinate to promote sustainable management of all types of forests and to strengthen long-term political commitment to this end. The World Bank also works closely with the Global Landscape Forum; the Global Restoration Council; the Global Partnership for Forest and Landscape Restoration; the AFR100; the LAC 20x20 and the Tropical Forest Alliance.
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.
Through the European Neighborhood and Partnership Instrument East Countries Forest Law Enforcement and Governance II Program (ENPI FLEG II), the World Bank supports Armenia, Azerbaijan, Belarus, Georgia, Moldova, Russia and Ukraine in their efforts to improve forest law enforcement and governance.
Last Updated: Oct 06,2019