Forests and climate: protection, restoration, land-use and markets

Do investors care about the rainforest? Evidence from voluntary carbon offsets around the world
Franklin Allen¹, Patrick Behr², Riccardo Cosenza², Eric Nowak²,³
¹Imperial College London, UK; ²Center for Climate Finance and Sustainability, Università della Svizzera Italiana (USI), Lugano, Switzerland; ³Swiss Finance Institute (SFI), Lugano, Switzerland

We explore how investors react to firms' biodiversity-focused activities in the Voluntary Carbon Market. The average stock price reaction of forestry carbon offsetting with and without biodiversity impact is not significantly different from zero until the end of 2022. Following a Guardian article claiming rainforest carbon offsets to be "worthless" in January 2023, the announcement returns to carbon credit retirements turned significantly negative. This effect is not significant for carbon credits contributing to biodiversity conservation certified by the Climate, Community & Biodiversity (CCB) Standard, but it is significantly negative for other credits. Our results show that investors care about both the biodiversity impact of carbon credits as well as the climate-change mitigation integrity of offsetting activities.

Impacts of Land-Use Change on Carbon Sequestration and Climate Mitigation Potential in Central Nepal
Prashamsa Rayamajhi¹, Mohan Bahadur Chand², Nirmal Babu Aryal¹, Abbal Chhatkuli³
¹Department of Environmental Engineering, School of Engineering, Kathmandu University, Nepal
²Department of Environmental Science, School of Science, Kathmandu University, Nepal
³Department of Civil Engineering, School of Engineering, Kathmandu University, Nepal

Ongoing land-use and land-cover (LULC) change in Nepal’s mid-hills affects carbon storage and climate-finance potential. This study assessed historical and projected LULC change and its implications for carbon sequestration and REDD+ finance in Kavrepalanchowk District. National land-cover maps for 2013 and 2022 were analyzed using GIS and remote sensing. A CA–Markov framework in TerrSet, using biophysical and socioeconomic drivers, projected 2032 LULC with 95.3% validation accuracy. Forest cover is projected to increase from 62.3% in 2022 to 66.6% in 2032, while cropland declines from 33.4% to 29.4%. The InVEST Carbon model estimated carbon stocks rising from 13.92 to 14.68 million Mg C, a net gain of 762,195 Mg C (2.79 MtCO₂e). At USD 5/tCO₂e, the gross value of additional sequestration is about USD 14 million; after uncertainty buffers and operational costs, potential realizable results-based payments are estimated at USD 9.1–9.7 million. The findings show that Nepal’s mid-hill landscapes can contribute substantially to climate mitigation and REDD+ finance, while highlighting the need for stronger MRV, carbon-sensitive land-use planning, and realistic benefit-sharing.

Quantifying carbon benefits from protecting and restoring tropical forest landuse mosaics in Vanuatu
Clint Cameron (Moana Conservation); Olivia Bird (Tearfund New Zealand); Jeffery Lava (Nasituan Vanuatu); Andrew Finlay (Tearfund New Zealand).

Forest loss and degradation remain major environmental challenges in Vanuatu, particularly for rural communities. Payment for Ecosystem Services (PES) projects offer an opportunity to diversify livelihoods while reducing deforestation and forest degradation and promoting ecosystem restoration. This study evaluates the Life & Land Project, a community-based PES initiative on the islands of Tanna and Erromango. Few studies in Vanuatu have quantified forest carbon stocks or assessed the carbon benefits of PES interventions. This research addresses these gaps by: (i) quantifying forest carbon stocks and structural characteristics; (ii) assessing the drivers and rates of deforestation and forest degradation, together with pressures affecting forest health, to inform management; and (iii) estimating the carbon benefits of these interventions using a gain–loss approach. Forest carbon stocks varied markedly among sites, reflecting differences in land use and environmental pressures. Mature primary rainforest at Whitegrass stored 490.7 ± 32.6 Mg C ha⁻¹, compared with 107.3 ± 10.7 Mg C ha⁻¹ in the invasive vine-degraded forests of Imanaka Creek and 128.2 ± 22.7 Mg C ha⁻¹ within the Forest Enhancement Zone at South River. Forest loss at Whitegrass was driven by logging, small-scale garden development and quarrying at an estimated rate of 3.55 ha year⁻¹, while invasive vines represented the principal threat to forest health across most sites. Management responses included establishing a community-managed Forest Protection area at Whitegrass supported by locally developed by-laws, together with Forest Restoration and Improved Forest Management involving vine removal, maintenance and replanting with native and agroforestry species. These interventions are estimated to deliver annual carbon benefits of 6,688 Mg CO₂e.

Biodiversity for a Livable Planet: An Evaluation of World Bank Group Support for Biodiversity, Fiscal Years 2010–2024
The World Bank Group is one of the largest multilateral financiers of biodiversity-related activities globally. "Biodiversity for a Livable Planet: An Evaluation of World Bank Group Support for Biodiversity, Fiscal Years 2010–24" is a published, peer-reviewed independent evaluation by the World Bank's Independent Evaluation Group covering conservation activities across 139 lending projects, biodiversity integration in agriculture, forestry and fisheries, and a review of all 57 World Bank Country Climate and Development Reports.
Forests store 861 gigatons of carbon, nearly a century's worth of current annual fossil fuel emissions, and absorb approximately 7.6 billion tons of carbon dioxide each year. Yet recommendations to restore natural habitats to enhance carbon capture and enlarge biodiversity benefits remain infrequent in World Bank Country Climate and Development Reports. Evidence also shows that integrating biodiversity into productive sectors can deliver simultaneous ecological and economic gains: a 36% internal rate of return in Panama's sustainable production landscapes, a 32% increase in net profits for Vietnamese rice farmers adopting biodiversity-friendly practices, and 188% of avoided deforestation targets met under the Forest Carbon Partnership Facility. Yet these models remain isolated and unscaled.
Investing in biodiversity conservation and restoration is not a trade-off against economic growth, food security, and climate outcomes. It is a pathway to achieving them. Climate and biodiversity are intrinsically linked and mutually reinforcing, yet biodiversity benefits remain consistently underoptimized in climate finance and development planning. COP31 is an opportunity to close that gap. This evaluation shows that when governments, financiers, and practitioners do, the gains extend well beyond nature, to sustainable growth, food security, and lasting development.