Protecting the world’s forests is a crucial part of the fight against climate change. Deforestation and forest degradation account for around 18% of all global greenhouse gas emissions.

We have to preserve this vital resource and find ways to reward people for looking after our forests, because the fact is that all over the world deforestation is driven by people’s need to make a living, whether it’s clearing land for subsistence farming or for intensive agriculture.

If we are to curtail deforestation, we need to find ways to finance the conservation of forests whilst generating sustainable economic development. To achieve the necessary scale, a combination of public and private sector interventions will be required.

The Forest Investment Review was commissioned by the UK's Department of International Development (DFID) and Department of Energy and Climate Change (DECC) to explore how best to stimulate private sector investment alongside public money to reduce deforestation in the developing world. Specifically, it examines ways of achieving this through public policy, and public-private collaboration.

Forum for the Future convened a team of experts in finance and forests to assess the different areas where private sector finance can be mobilised, and they have contributed chapters to this report.

The report will help inform government policy-makers, both  in developed countries and in the developing forest nations, in the run up to the UN conference on climate change in Copenhagen. We hope it will lead to urgent action - both within and outside the Copenhagen process - to combine forest conservation with sustainable economic development.

The introductory chapter
The introduction sets the scene, outlining why forests are so critical in the fight against climate change, exploring the causes of deforestation and highlighting the need for a range of different interventions, from governments and from the private sector. It looks at the need for immediate funding now, and suggests how this funding can stimulate private sector investment over time. 

The attractiveness of investments in REDD+ projects to the private sector
Chapter 1 explores what attracts each category of private investor (for example pension funds, mutual funds, venture capital funds and high net worth individuals) to invest in a project designed to reduce deforestation or forest degradation (REDD). It looks at how these different types of investor will take on projects at different stages of the business cycle and in countries with differing risk profiles. It then recommends actions to increase the involvement of each type of investor in REDD.

Exploring the characteristics of existing forestry investment vehicles
Chapter 2 looks at current investment in forests and considers the returns on investment. It explores the attitude of investors towards forests, and highlights the need for better understanding of and differentiation between the different types of forest investment, from monoculture plantations to selective logging to investment in natural forests. It then looks in more detail at the forestry funds currently being promoted to European investors.

Stimulating private capital investment to achieve REDD+
Chapter 3 focuses on the actions needed to stimulate private sector investment in the developing forest nations.  It looks at the potential for REDD+ investment and identifies the current barriers. It provides examples of successful investment in a range of REDD+ projects, including planted forests, sustainably managed forests and private investment in forest conservation. 

The potential of risk mitigation mechanisms to facilitate private sector investment in REDD+ Projects
Chapter 4 explores how governments can support private sector investment by offering insurance against risks. It looks at forestry insurance innovations and identifies how existing public sector organisations can take on an enhanced role in providing forest insurance. 

The role of innovative financing in reducing the rate of deforestation in tropical countries
Chapter 5 looks at how innovative financing mechanisms can be applied to achieve reduced emissions from deforestation and degradation, building on experience in other sectors such as health.

Appendix - linkages with other REDD initiatives
The Appendix outlines all of the initiatives that are currently in place to support Reduced Emissions from Deforestation and Degradation.  It explores the amount of funding that has currently been committed and allocated to them, and the role that each of them has been designed to play in REDD.