A recently announced USD 400 million fund could help leverage some of the money needed address deforestation. While urgently needed, such private sector initiatives should not replace other, more established ways of protecting the forest.
Unlocking Forest Finance
Bonds are well known financial instruments for corporations to access large sums of finance. ‘Green bonds’ are a variation designed to finance environmentally focused projects. Ultimately, these instruments could channel the billions of dollars needed to reduce deforestation and encourage sustainable land use.
Farming is the primary driver of deforestation in many tropical forest regions. Investment in more sustainable forms of agriculture can help reduce this damage to the forest and the associated climate change impacts whilst increasing agricultural production. This can provide a more reliable income for smallholders and helps ensure food security.
Agrobanco and CEDISA working in partnership with the Global Canopy Programme sign a Memorandum of Understanding to develop a new credit line of up to USD 88 million to finance the sustainable transition of seven supply chains across San Martin, Peru, in order to reduce deforestation and improve livelihoods.
Current methods to tackle deforestation aren’t working. The statement may be blunt but, with 6.6 million hectares of natural forest lost since 2010, it’s hard to dispute.
Understanding current methods of forest protection