Financing the Transition: the Costs of Avoiding Deforestation

Year Published

2023

Contributing Organizations

Energy Transitions Commission (ETC)

Type of Resource

Research/Insights Report

Languages

English

Relevant Topics

Core Topic

Risks & Opportunities: The Business Case

Topic 2

Agriculture, Forestry & Land Use

Target Audience

All

Relevant Geography

Global

Resource Description

This resource examines the finance and policy measures needed to halt tropical deforestation by 2030. It reviews drivers, concessional finance, and complementary actions to shift land use toward sustainability.

Why This Matters

Deforestation undermines climate goals, ecosystems, and human well-being. Scaling finance and reform is critical to protect forests and support sustainable land use.

Key Insights

Forests are vital carbon sinks, biodiversity reservoirs, and sources of livelihood, yet deforestation remains widespread
Agricultural expansion—particularly beef, soy, palm oil, and timber—is the dominant driver of tropical forest loss
Concessional finance can offset short-term economic incentives but cannot alone end deforestation
Success requires stronger governance, reduced demand for forest-linked products, transparent supply chains, and sustainable livelihoods from standing forests
Finance is especially important in the near term while structural changes take hold

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