UN: $40bn a year could halve deforestation worldwide

Investing just 0.034 per cent of global GDP could transform the world's forestry sector, halving deforestation rates, slashing carbon emissions and creating up to five million new jobs by the middle of the century.

That is the conclusion of a major new report from the UN Environment Programme (UNEP), which argues that investing an average of $40bn a year in forest protection would allow forests to absorb 28 per cent more carbon from the atmosphere than they do now.

Released to coincide with yesterday's World Environment Day, the report says extra finance can be raised from the public and private sectors using mechanisms that pay land owners for maintaining ecosystems such as Reducing Emissions from Deforestation and Forest Degradation and Payment for Ecosystem Services.

The report says that starting with $15bn of investment in 2011 and increasing to about $57bn by 2050 could cut in half the speed at which the planet's forest are being felled over the next 20 years. The investment would also encourage a 140 per cent rise in the number of new trees being planted and swell employment in the forest sector from 25 million currently to 30 million by the middle of the century.

Annual net forest loss since 1990 has fallen from about eight million hectares – around four times the size of Wales – to about five million hectares, the report says, noting that international efforts mean that in some regions of Asia, the Caribbean and Europe the amount of forested area has actually increased over those 20 years.

The report also comes as the Republic of Congo announced plans on Friday to plant one million hectares of trees by 2020 to restore degraded forest and provide wood for paper and fuel.

Participants at last week's Three Forest Basins Summit in Brazzaville, which hosted 32 countries from the Amazon, Congo and Borneo-Mekong regions that make up 80 per cent of the world's equatorial forests, also said they would work together on scripting a forest protection agreement in time for next year's Rio+20 UN Conference in Brazil.

But despite recent successes, governments still need to support forest-based investments through policies such as credit, microfinance, leases and certification schemes, the UNEP report said.

"Supportive social, legal and institutional settings are key to the sustainable management of natural resources," said Eduardo Rojas-Briales, chairman of the Collaborative Partnership on Forests. "Optimal land use, further life cycle analysis, ecosystem landscape management, and governance are all key themes that will help unlock the full potential of forests in creating green economies."

The report, entitled Forests in a Green Economy, also references the work of The Economics of Ecosystems and Biodiversity report, which sought to calculate the value of the natural world to nations' economies and was followed by a UK equivalent last week.

It found that natural capital such as forests can represent up to 90 per cent of the GDP generated by the rural poor, citing schemes that seek to put a value on natural capital, such as a project to restore natural mangrove forests in Vietnam, which cost $1.1m but resulted in the avoidance of sea dyke maintenance costs worth $7.3m.

A related report published yesterday in the online journal PLoS One identified that UN efforts to put a price on forests and issue tradable credits for slowing the rate of deforestation should take into account the size of trees in a forest and not just the area covered.

The survey of 68 countries found the amount of carbon stored by forests in Europe and North America has increased from 2000 to 2010 despite no real change in forest area, while African and South American forests saw the total amount of carbon stored fall at a slower rate than deforestation. However, the study said there was not enough data to estimate an overall trend.