Forests and terrestrial ecosystems more broadly are critical not only to flora and fauna but also to communities that depend on them, contributing to poverty reduction, economic growth and employment. They also generate essential ecosystem services that sustain key sectors such as agriculture, energy, and water.
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. Clearing of forests for agriculture, extractive industries, urbanization and other land uses leads to the loss of habitat and brings humans and wildlife into closer contact, increasing the risk of spillover of infectious diseases such as COVID-19, Ebola and HIV from animals to humans as humans and wildlife come into close contact.
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 2019 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 increase. 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. The IPBES estimates that investment in better land stewardship could contributes about 37 percent of the climate change mitigation needed by 2030 to keep global temperatures below a 2oC increase.
Last Updated: Oct 16,2020
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. The World Bank Group Forest Action Plan for Fiscal Years 2016-2020, which is now being updated to guide forest sector engagement through 2025, focused on investments in sustainable forest management and conservation; and nature-based solutions in which the World Bank Group takes a holistic look at terrestrial landscapes, working in sectors like agriculture, transport and energy to generate positive forest and ecosystems services outcomes. The World Bank Group’s support to implement such an integrated approach is being scaled-up through the Adaptation and Resilience Action Plan with a commitment to support an integrated landscape management approach for avoiding deforestation and promoting landscape restoration or sustainable forest management for 120 million hectares of forests in 50 countries
In FY20, the World Bank’s forest portfolio consisted of 102 projects and a total net investment of $3.7 billion dollars, up from 81 projects and a total net investment of $1.9 billion in FY16. IDA funding grew to 61% of the portfolio in FY20, an increase from 32% in FY16.
In September 2019, the World Bank launched PROGREEN, a new global partnership for sustainable and resilient landscapes. PROGREEN supports countries’ efforts to improve livelihoods while tackling declining biodiversity, loss of forests, deteriorating land fertility, and increasing risks such as uncontrolled forest fires, which are exacerbated by a changing climate. Through an integrated landscape approach, PROGREEN helps countries meet their national and global sustainable development goals and commitments, including poverty reduction, in a cost-effective manner at scale.
Last Updated: Oct 16,2020
In Brazil, since 2012 the World Bank is supporting the government in better managing and conserving the Cerrado forest, the second largest biome in South America, which was 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 directly employs 17,000 people and accounts for nearly two percent of GDP. Around 267,000 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 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.
In the Democratic Republic of the Congo, home to the second-largest swath of rainforests in the world, about 62 percent of the territory is covered by forests that critically contribute to the livelihoods of 40 million people, who are among the world’s poorest. Rapid population growth has increased the demand for agricultural land, fuelwood and charcoal production, and large-scale development, resulting in significant deforestation. Since 2008, the World Bank mobilized $140 million to support reforms and pilot innovations in forest governance, land use planning, and land tenure. Under the Improved Forested Landscape Management Project alone, 17,000 hectares of agroforestry plantations were created; 20,000 hectares were enclosed for natural regeneration; 110,000 people saw an income increase of 18% and more than 6 million tCO2eq emission reductions were generated. Estimates show that scaling up these approaches could enhance rural livelihoods by 300% and increase cash generation by up to $2,200 per household per year while providing more sustainable charcoal and agricultural commodities to the megacity of Kinshasa. The Forest Dependent Community Support Project has been key in supporting the continuous engagement of the DRC civil society and indigenous peoples in forest action.
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 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)
Chile, Democratic Republic of the Congo, Ghana and Mozambique – all countries with globally significant forest resources – have signed landmark agreements with the World Bank that reward community efforts to reduce carbon emissions by tackling deforestation and forest degradation. Together, these four agreements, known as Emission Reductions Payment Agreements, unlock performance-based payments of up to US$181 million. The payments will come from the World Bank’s Forest Carbon Partnership Facility Carbon Fund. Several other countries are expected to finalize similar agreements in the coming months. Several other countries are expected to finalize their emission reductions programs and follow suit with ERPA signings valued in total at approximately $800 million by the end of 2020.
Last Updated: Oct 16,2020
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.
PROGREEN, the Global Partnership for Sustainable and Resilient Landscapes, is a new World Bank Multi-Donor Trust Fund that supports countries’ efforts to improve livelihoods while tackling declining biodiversity, loss of forests, deteriorating land fertility, and increasing risks such as uncontrolled forest fires, which are exacerbated by a changing climate. Through an integrated landscape approach, PROGREEN helps countries meet their national and global sustainable development goals and commitments, including poverty reduction, in a cost-effective manner at scale.
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 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 $230 million grant program by the Global Environment Facility (GEF). Launched in 2015, the GWP has 37 projects across 32 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 Amazon Sustainable Landscapes (ASL) Program, is a 209 million impact program funded by the GEF. It seeks to protect globally significant biodiversity, expand the area of the Amazon under legal protection, improve management of protected areas and production landscapes, and increase the area of the Amazon under restoration and sustainable management. It includes projects in Brazil, Peru, Colombia, Bolivia, Guyana, Suriname, and Ecuador.
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; LAC 20x20 and the Tropical Forest Alliance. In addition, the World Bank is a core partner for the implementation of the UN Decade on Ecosystem Restoration 2021-2030.
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 16,2020