NEW REPORT REVEALS $1 TRILLION OPPORTUNITY FOR MASS-SCALE FOREST RESTORATION
WAIMEA, HAWAII (September 30, 2021) – Global forest restoration could generate approximately US$1 trillion in new revenues for landowners over the coming decades.* This is among the key findings from The Value of Restoration, a new report by Frontier Economics and Terraformation, a global reforestation company partnering with communities worldwide to help solve climate change by rapidly restoring native ecosystems.
The business case for landowners to restore degraded lands, or create new forests, has grown increasingly strong due to the advancement of carbon markets, the proliferation of global climate commitments and the advancement and affordability of forest restoration technology, such as off-grid, solar-powered desalination technology and forest management apps.
Once landowners break even on their investment, the potential economic opportunity could total US$204 billion a year. These returns to landowners are only a portion of the much bigger value of the restoration economy, which includes valuable ecosystem benefits such as flood risk prevention, water filtration and tourism, which come with the creation of forests.
The report highlights four main policy levers to unlock the full potential of the restoration economy:
Following this report, Terraformation is calling for financial institutions to act faster to create structured products to finance restoration and unlock large flows of capital, as well as for governments to take the opportunity at COP26 to create more inclusive carbon markets, which often exclude smaller landowners, particularly in developing nations.
Commenting on the report findings, Yishan Wong, founder and CEO of Terraformation, said: “Forest restoration is the most effective, cost-efficient and immediately scalable carbon capture solution to reverse climate change. Now there is a compelling business case for it, too.
“Massive global reforestation represents the largest investment opportunity of our time, and unlike most proposed carbon sequestration technologies, land restoration creates significant value for society as well as landowners. To realize this massive opportunity, we are calling for two things: First, financial institutions need to move faster to create new ways for countries and large institutions to channel capital into restoration projects. Second, governments must use COP26 to create an effective carbon market that does not systematically lock out lower-resourced landowners who can’t cover the high costs of existing high-quality verification protocols.
“This is the decade for action on the climate crisis. No one has the option to sit this out. Every organization, government, community, person or company who manages unused or degraded land should prioritize its restoration.”
Matthew Bell, Frontier Economics Director and former CEO of the UK Climate Change Committee said: “The business case for restoration is increasingly clear. Landowners and local communities stand to earn hundreds of billions of dollars in the coming decades, alongside the wider social and environmental reasons to restore marginal land. Acting to reduce climate change is increasingly a business proposition across many sectors of the global economy, as well as a social imperative. This analysis adds forestry to the growing list of areas where, with suitable government action, there are significant future business opportunities.”
Other report findings include:
*This calculation includes restoring degraded tropical and temperate forest ecosystems. It is based on 80 years of cash flows, and does not include the value of restored ecosystem services.
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Terraformation’s mission is to reverse climate change by restoring the planet’s forest ecosystems. Terraformation partners with organizations across the world, equipping them with the tools and training they need to drive successful restoration and rapidly hyperscale their efforts. The company has developed solutions to the biggest barriers to large-scale restoration, including solar-powered desalination systems and modular seed banks to process and store millions of seeds. It is also developing an open-source software suite to streamline progress and educational programs to train more experts.
About Frontier Economics
Frontier Economics Limited is an economic consultancy with energy, imagination and flair. Established in 1999 and entirely employee owned, we can draw on the expertise of over 300 economists across Europe. Our clients range from major multinational corporations and governments to influential niche firms in global markets.
Frontier Economics are sector experts in the environmental and climate change area, working on a series of high-profile projects. We have advised governments around the world on climate policies, including the design of trading systems, low-carbon innovation policy and the economics of adaptation. Our work is led by Matthew Bell, formerly Chief Executive of the UK Committee on Climate Change, and a team with expertise in energy markets, the economics of the natural environment and the role of government.
Angela Jo Tu, Head of Brand Marketing, Terraformation: email@example.com
Headland Consultancy: Terraformation@headlandconsultancy.com