Can this billion-dollar initiative save the world’s tropical forests?

Governments and global companies have joined forces as part of the appropriately-named LEAF Coalition to mobilize $1 billion in financing to protect the world’s tropical forests.

The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition is an ambitious public-private initiative that aims to hasten climate action by providing results-based finance to countries that protect their tropical and subtropical forests.

It will see the governments of Norway, the UK and the US work with businesses including Amazon, Airbnb, Bayer, Boston Consulting Group, GSK, McKinsey, Nestlé, Salesforce and Unilever to support high-quality emissions reductions in an attempt to bring an end to deforestation.

The initiative will also benefit billions of people who depend on tropical forests, while supporting sustainable development.

Tropical forests vital to achieving 1.5°C target

Tropical forests absorb carbon from the atmosphere, so ending their deforestation is key for meeting global climate, biodiversity and sustainable development goals.

However, such forests are under threat with destruction of primary rainforests having increased by 12% from 2019 to 2020, and the world losing more than 4.2 million hectares of tropical forest cover last year alone. Their protection could provide nearly a quarter of cost-effective mitigation by 2030.

“There is no path to limit global warming to 1.5°C and meet the Paris Agreement without stopping tropical deforestation by 2030,” said Forum Founder and Executive Chairman Klaus Schwab.

“The LEAF Coalition is a big step forward to provide real economic incentives for high ambition countries to protect and restore their forests.”

How it works

The LEAF Coalition empowers tropical and subtropical countries to accelerate efforts to end deforestation, while supporting them in achieving nationally determined contributions (NDCs) under the Paris Agreement.

Once a country or jurisdiction reduces deforestation and forest degradation, or restores forests, the emission reductions are verified and issued according to the ART/TREES standard.

Payments are then made according to fund management best practice, enabling countries to set a course for sustainable economic development that conserves and restores forests, while supporting local communities and livelihoods.

US non-profit Emergent will act as LEAF’s administrative coordinator and also provide a platform to facilitate transactions. The final list of countries and companies participating in the scheme will be announced when emissions reduction purchase agreements are signed with tropical forest nations by the end of 2021.

Local participation vital

Ensuring the full participation of local communities, indigenous people and other relevant stakeholders will be key to LEAF’s success.

Guyana Vice President Bharrat Jagdeo welcomed the initiative, saying it would enable forest countries to create new opportunities.

But he added: “If this new economy is to be more attractive than the old economy, LEAF must also catalyze funds that flow quickly and efficiently. The systems to enable this can only be successful if forest countries are involved in their design – and we stand ready to work with the LEAF Coalition to achieve the innovation required.”

Amazon CEO and Co-Founder Jeff Bezos is hopeful that, “in uniting behind a common cause, the countries and companies of the coalition have a chance to end deforestation by 2030.”

Nature-based solutions

The UN Environmental Programme (UNEP) is currently putting together a State of Finance for Nature report, due for publication later this year, to demonstrate how investing in nature-based solutions can address environmental crises and wider societal challenges.

Meanwhile, the World Economic Forum is gearing up for COP26 by hosting a series of live-streamed discussions on 27 May focusing on steel, shipping, hydrogen and climate breakthroughs to achieve net zero in time.