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Tropical forests have turned into a carbon source rather than a sink, but you can help fix this

According the recent research, deforestation and degradation of forests accounts for up to 15% of the annual carbon emissions. Furthermore, after accounting for deforestation and degradation, tropical forests now emit more carbon than they capture, making them a carbon source instead of a sink. Significant ramp-up in afforestation and restoration efforts are needed to fix this trend.

The United Nations General Assembly has declared 21 March as the International Day of Forests (IDF). Forests provide habitat to about 80% of the world’s terrestrial plants and animals, create 86 million green jobs, and at least partially supports the livelihood of more than 90% of the people living in extreme poverty (based on data from Food and Agricultural Organisation of the United Nations). Furthermore, forests also provide one of the primary mechanisms for capturing and sequestering carbon from the atmosphere. According to some estimates, each hectare of dense tropical forest can absorb approximately 600 kg of atmospheric carbon dioxide per year. Investing in restoration and increase of forest areas therefore significantly support both the environmental and social objectives of ESG.

Maintaining adequate forest cover has been challenging

Despite all the above benefits, loss of forest areas continue to remain a very serious threat to the earth’s ecosystem. A compilation of the images obtained from NASA’s Earth Observations Satellite shows the changes in vegetation on the earth’s surface over the last 20 years. On an average about 8 million hectares of naturally regenerated forests are lost annually. Close to 3 million hectares are gained due to planted forest campaigns, resulting in a net 5 million hectares of forest area loss each year. While both Europe and Asia have reported net gain in forest area in the last decades, the rate of gain has been decreasing in the recent years. The problem is much more acute in Africa and South America, with average 4 million hectares and 2.6 million hectares of net loss in forest areas reported in the last decade on an annual basis respectively.

Vegetation on earth’s land surface

(courtesy: NASA Earth Observations)

What causes such large losses in forest areas

The main causes of loss of forest areas include:

  • Land-use change: conversion of forests into agricultural land or settlement lands

  • Fires: these are especially common in heavily logged rainforests or forests on peat soils

  • Unsustainable logging: especially as the consumption markets for illegally harvested wood continue to exist

  • Mining and infrastructure projects: projects would clear parts of forests to lay down railway lines, roads, or other infrastructure constructions such as power stations

As confirmed by our ESG Base Research team, deforestation and degradation of forests accounts for 10 – 15% of the annual anthropogenic carbon emissions. After accounting for deforestation and degradation, tropical forests are found to emit more carbon than they capture, making them a carbon source rather than a carbon sink.

Restoration still the least expensive option

Currently about 4.06 billion hectares of the earth surface area are covered with forests, roughly about 30% of the total land surface. The Intergovernmental Panel on Climate Change has a goal of nearly 1 billion hectares of additional trees as part of its 1.5 C climate objective. If successful, this campaign will add about 25% more forest area on the earth surface. ESG Base has corroborated the claims from a recent research that it would be possible to develop an additional 0.9 billion of canopy cover outside of the existing forests, without a need to reduce the existing land used for agriculture and urban purpose.

With growing awareness of the need to increase forest areas, many forest restoration and tree plantation campaigns are currently well under way around the world. Some very ambitious projects such as the Bonn Challenge (for forest landscape restoration of 350 million hectares), the New York Declaration of Forests (to plant 350 million hectares of degraded forests and agricultural land by 2030), the Trillion Trees Campaign (to restore a trillion trees by 2050), the Initiative 20x20 (targeting 20 million hectares of restoration), the Great Green Wall campaign, the AFR100 campaign (targeting 113 million hectares of land restoration), are currently under way, and individuals and organisations can make a contribution by donating to these campaigns. Corporate interest in forest restoration has also been growing rapidly, with increasing focus toward ESG alignment. Marketing campaigns for the cost of planting a tree have centered around $1-per-tree, although in reality the cost of planting and monitoring can vary widely between $0.1 – 20 per tree, depending on the location, scale, and the type of monitoring and certification plans implemented. If about 1,000 trees can be planted per hectare and the trees have lifetimes of about 20 years, the cost of removal of carbon from the atmosphere is still less than $20 per ton of carbon removed. From purely a carbon capture standpoint, forest restoration and expansion are still significantly less expensive alternatives than setting up carbon sequestration facilities on an industrial scale, which may cost $50 - $100 per ton of removal of carbon and can only handle emission streams with high concentration of carbon, such as emissions from a power plant.

If you are considering making a contribution to restore forests, these are some of the organisations that are accepting support for forest restoration and tree planting campaigns:

Alternately, feel free to contact us at ESG Base and we will be happy to provide assistance.

Happy International Day of Forests 2021!

About ESG Base

ESG Base is a London-based, global premium provider of technology and data solutions enabling ESG investments in real assets.

ESG Base Ltd.’s mission is to offer scalable technology solutions for fund managers and investors to identify the best ESG aligned investments and to enable performance monitoring of the assets through the investment lifecycle. Their SaaS technology powered by AI and advanced automation draws from a wide range of data sources and provides projections on future performance of investments subject to dynamic policy and technology scenarios.

ESG Base is supported by the Institute of Innovation and Entrepreneurship at London Business School and by Santander UK Universities.

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