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The Earth’s Forest’s Impact on the Global Economy

Forests are not only the lungs of the planet but also the heart of the economy. They provide goods and services that benefit millions of people and industries, from timber and food to water and tourism. However, forests are under threat from deforestation, which has negative impacts on the environment and the economy.

According to the World Economic Forum, forests cover 31% of the global land area and house more than 80% of the terrestrial biodiversity. They also support the livelihoods of more than 1.6 billion people, mostly in developing countries, who depend on forest resources for food, fuel, medicine, and income. Forests also contribute to the global economy by regulating water cycles, preventing soil erosion, and mitigating natural disasters.

The value of forest products and services is estimated at US$ 75–100 billion per year. The global timber sector alone employs 13.2 million people and is worth $600 billion each year. Forests also offer ecotourism, carbon credits, and biotechnology opportunities, which can generate more income and employment for local communities.

However, these benefits are at risk from deforestation, driven by various factors such as agriculture, logging, mining, and urbanization. The Food and Agriculture Organization estimates that between 1990 and 2016, the world lost 502,000 square kilometers of forest area, equivalent to the size of South Africa. This loss of forests not only reduces the capacity of the planet to cope with climate change but also has negative impacts on the economy.

For instance, deforestation reduces the availability and quality of water, which affects the productivity of agriculture and industry. It also increases the risk of floods and landslides, which damage infrastructure and property. Moreover, deforestation reduces the supply of forest products and services, such as timber, non-timber forest products, ecotourism, and carbon credits, which generate income and employment for many people.

The Earth’s forests have a significant impact on the global economy, both in terms of the benefits they provide and the costs of their loss. Here are some key points:

  • Forests support more than 45 million direct and indirect jobs globally and have a total contribution of more than $1.3 trillion to the world economy.
  • Forests help prevent erosion and enrich and conserve soil, helping to protect communities from landslides and floods and producing the rich topsoil needed to grow plants and crops.
  • Forests also play an important role in the global water cycle, moving water across the earth by releasing water vapour and capturing rainfall.
  • Forests are home to more than 65 per cent of amphibian, bird, and mammal species and provide essential ecosystem services such as pollination, pest control, and carbon sequestration.
  • The loss of biodiversity from deforestation would cost the global economy up to $4.5 trillion a year, according to an estimate by The Economics of Ecosystems and Biodiversity project.
  • The ongoing loss of natural spaces, including forests, has become a systemic risk for the global economy, due to the devastating impacts of the COVID-19 pandemic and the escalating climate and biodiversity crises.
  • Investing in forests is investing in our future, as forests offer economic, social and environmental stimulus by creating jobs, protecting nature, accelerating decarbonization and improving climate resilience.

Therefore, it is imperative to conserve and restore the forests, as they are essential for the health of the planet and the prosperity of the people. Many initiatives and policies aim to achieve this goal, such as the United Nations Forum on Forests, the REDD+ mechanism, the Bonn Challenge, and the New York Declaration on Forests. These efforts require the collaboration and commitment of governments, the private sector, civil society, and local communities, as well as the support and investment of the international community.

Forests are the lungs of the planet, but they are also the heart of the economy. By protecting and enhancing them, we can ensure a better future for ourselves and future generations.


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