Ecosystem Marketplace’s report, A Green Growth Spurt: State of Forest Carbon Finance 2021 (last iteration in 2017), published in collaboration with the Forest Carbon Partnership Facility of the World Bank, shows that funding to conserve and increase carbon stored in global forests has more than doubled in the last four years. However, forest carbon finance still falls far short of what’s needed to counter deforestation and support increased climate ambition. Additional support for the report was provided by Arbor Day Foundation and New Forests.
Get a comprehensive look at how forest carbon finance is shaping the path to net zero, and outlook in 2021 and beyond.
Download the report by completing the form below, and here’s a brief summary of the key findings:
The past four years have shown a strong upward trajectory for forest carbon finance.
Between 2017 and 2019, almost $400 million was generated in global voluntary carbon market transactions, trading 105 million metric tons of carbon credits (MtCO2e) from sustainable forestry and land use. Voluntary carbon markets have generated nearly $1.4 billion to date in demand for natural climate solution (NCS) offsets, which dominates other offset types (such as renewable energy) in terms of overall transaction value.
With recent developments, the sector has nowhere to go but up.
Forest carbon finance from compliance-driven carbon markets is expected to reach even greater heights in the coming years. This growth will be driven by new compliance mechanisms, including the international aviation industry’s new carbon market, CORSIA, and international markets still under negotiation under Article 6 of the Paris Agreement, which if operationalized, could reach transaction values in the tens of billions (USD) annually in this decade.
But if we want to get serious about combatting climate change in the next few decades, we must bolster forest carbon finance’s critical role.
For forest carbon finance to thrive, many elements need to fall into place, such as stronger price signals, emission reduction strategies compatible with companies’ deforestation commitments, greater representation of carbon markets in the Paris Agreement, and improved private-sector confidence in the role of offsets, to name a few.
New Report: Finance for Forest Carbon Doubled since 2016, but Still Far from Meeting its Potential as a Natural Climate Solution
Genevieve Bennett | +1 202 298 3007 | gbennett (at) forest-trends [dot] org