Forests: Catalysts for Regeneration?

A compensation model for achieving a climate positive future

Globally, a significant portion of investments in natural assets primarily focuses on the carbon sequestration potential of afforestation projects. While this is crucial, it’s important to recognise that ecosystem protection, such as forest preservation, can offer many other equally or even more valuable services. When evaluating forest projects as potential compensation mechanisms, it’s essential to consider all these benefits to accurately assess the value of ecosystem protection. This assessment is crucial for developing investment strategies and innovative carbon market mechanisms.

In addition to the intrinsic value of biodiversity, trees and forests provide a wide range of products and services, known as ecosystem services. These services encompass food, fresh water, timber, fibre, wood and biomass fuel, medicine, building materials, shade, recreational spaces, educational opportunities, aesthetics, spiritual benefits, waste regulation, water filtration, flood risk reduction, disease control, soil formation, photosynthesis, nutrient cycling, and, notably, climate regulation through carbon sequestration.1

Moreover, there are the impacts of forests on the physical and mental health of humans, a connection being investigated by One Health Research Centre. Some may argue that because certain social benefits of forests are not directly bought or sold, there’s no need to assign a value to them. However, the absence of a price for these benefits renders them undervalued within our economic system and, therefore, should be considered in a comprehensive evaluation. When it comes to the services these ecosystems provide, an estimated 38% of their total value at a global level comes mainly from forests and wetlands2 and out of the $44 trillion of economic value generation, more than 50% of the world’s total GDP is moderately or highly dependent on nature and its services.3 Forests cover about 31% of global land area and more than one-third of it can be regarded as primary forest (i.e. naturally regenerated forests of native species.4 Currently, the financial investment to restore forest ecosystems is still largely being done by the public and philanthropic sector. For example, in Europe, only 5% of the total funding for terrestrial ecosystem restoration is generated by the private sector.5 To change the status quo, there needs to be more platforms and initiatives backed by government policies that create a more favourable avenue for the private sector to invest in natural assets.

Being climate positive entails both saving more greenhouse gas (GHG) emissions than are produced by a specific company, project, or process and simultaneously reducing emissions in alignment with the 1.5°C goal outlined in the Paris Agreement. Recognising the pressing nature of the climate crisis and the significant role of nature in climate stabilisation, organisations must move beyond simply reducing or neutralising their carbon footprints. They should instead focus on regenerative actions that can reverse the environmental damage largely caused by human activities.

1. Offset both direct and indirect emissions of its well-being infrastructures.

2. Sustain the livelihoods of local and Indigenous People and Local communities (IP&LCs) engaged in ecosystem preservation and restoration.

3. Enhance biodiversity and carbon sequestration capacity within its operational areas.

Other solutions like the creation of trackable supply chains for wood will in turn support the wider adoption of bio-based materials, an essential step for reducing embedded emissions in the construction sector. Integrated land use approaches such as agroforestry are sustainable alternatives to intensive agriculture practices that enable regenerative processes that prevent soil degradation and deforestation. These ambitious goals are uniquely attainable through a balanced combination of regenerative productive landscapes and protected carbon sinks, to guarantee both the preservation of essential natural systems and a diversification of business models based on ecosystem services.

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1
Millennium Ecosystem Assessment, 2005. Ecosystems and Human Well-being: Synthesis….

2Grammatikopoulou and D. Vackarova, 2021. The value of forest ecosystem services: A meta-analysis…

3WEF, 2020. Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy.

4FAO, 2020. The State of the World’s Forests.

5 UNFCCC (2019). MAX Burgers: Creating the World’s First “Climate Positive” Menu.

9 July 2023
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