The idea that rainforests have a much greater value for mankind than the land they encompass and the timber they contain is not new. As natural traps for carbon, forests have been considered a tool for mitigating CO2 emissions since the beginning of international climate change negotiations. Notwithstanding challenges, the United Nations dedicated programme, REDD, has been one of the major achievements in the past climate summits, and most recently, the global REDD+ framework was adopted in Warsaw in November 2013.  But even if hundreds of millions of dollars have been pledged since the scaling up of these initiatives by governments, little has been actually spent on concrete projects to halt deforestation, according to a report published last January by Interim Forest Finance Project[1]. The private sector investment is notably low – because of a lack of incentives and predictability of revenues under current schemes. But despite the recent collapse in carbon markets, and the difficult start of the government-backed initiatives under REDD+, there are many reasons why investing to preserve the rainforest can be a good bet.

Forests are natural carbon sinks and climate regulators, and according to the IPCC, their loss and degradation are responsible for 10% of all human-caused greenhouse gas emissions. Native rainforests such as the Amazon in South America or the Indonesian rainforest are also among the most precious and fragile ecosystems in terms of biodiversity. The world’s rainforests, while covering only 7% of the planet’s surface, are home to 50% of its

plants and animals[1]. Forests are also a critical ecosystem for freshwater (according to the UN, more than three quarters of the world’s accessible freshwater comes from forested catchments[2]). In total, the non-market services of forests (other than providing timber) exceed the value of the wood in the forests[3], which is often the main element used to estimate their market value.

In addition, forests have significant social value for people living in or near them, in symbiosis with a natural habitat providing food, energy, water, medicine, and inspiration for centuries-old customs and traditions. Some of the most isolated human tribes live in native forests, and represent a very unique anthropological value for a globalizing and homogenizing human society. It is estimated that in the Amazonian basin only over 300 different languages are spoken by local communities[4]. Such wealth is unfortunately, as is biodiversity, not taken properly into account in the total value of the rainforest.

The consequence of this market failure to integrate the extremely rich services forests provide, is a continuous trend of deforestation that has changed the landscape, often irreversibly, in many countries. Since 1990, nearly 10% of the native forest in Brazil and 20% in Indonesia has been lost[5], notably to be replaced with agriculture land for mainstream commodities. Even if awareness of the dangers in felling native rainforests has increased over the past decades, and the deforestation rate has been relatively slowed, there are still around 50,000 square miles of forests lost each year[6], increasing the level of carbon in the atmosphere, putting pressure on already endangered species, and erasing cultures that constitute a major piece of the ethnodiversity on our planet.

The creation of REDD and of associated market-based mechanisms is undoubtedly part of the solution to reverse this negative trend. However, for such regulatory instruments to lead to concrete results in terms of preserving the rainforest, the involvement of private players alongside governments and NGOs is a necessary step.

For now, such public-private partnerships would seek essentially to harvest the estimated carbon monetary worth. While it is estimated that the implementation of REDD+ will require financing of 17 to 33 billion US dollars annually in order to implement the objective of halving emissions linked to deforestation by 2020, the UICN calculates that the net annual benefit of the reforestation of 15% of degraded forest landscapes would be 85 billion USD[7]. Ultimately, investors should consider the real value of the rainforest for human society, with its multiple environmental and social aspects, making it one of the richest natural capital assets over the very long term.

Margarita Pirovska PhD is a Policy & Sustainability Analyst at Cornerstone Capital Group and former Project Manager at GDF SUEZ at the Sustainable Development Division.




[4] Millennium Ecosystem Assessment (2005) –


[6] Calculations made with FAO data.