The recent approval of Resolution No. 19/2025 by Brazil’s National REDD+ Commission (CONAREDD+) represents a significant step toward correcting this imbalance. The Resolution sets clear requirements for jurisdictional programs and private carbon projects in public and collective lands. It mandates alignment with territorial management plans, prohibits restrictions on traditional land use, requires free, prior, and informed consultation, guarantees independent technical and legal support for communities, and establishes protections for human rights defenders along with community-led grievance mechanisms.²

This is more than a regulatory reform: it is a recognition that development and climate action must proceed on the firm foundation of rights, equity, and justice. Without these safeguards, markets risk perpetuating the very inequalities they claim to solve.

At Forest Trends’ Communities and Territorial Governance Initiative (CTGI), we have long upheld the principle that Indigenous and traditional peoples must be at the center of any climate solution. Our new partnership with Brazil’s Ministry of Indigenous Peoples embodies this vision: ensuring that Indigenous leadership shapes both jurisdictional frameworks and voluntary projects. The emphasis must remain clear—Indigenous Peoples are not stakeholders to be consulted after decisions are made. They are rights-holders and leaders, whose governance systems provide resilience and integrity.

Experience shows why this matters. At COP26, international donors pledged US $1.7 billion to support IPLC tenure, but by COP27 only US $321 million had been disbursed.³ Promises alone are not enough. Binding mechanisms, such as those now embedded in Brazil’s Resolution, are essential to ensure that resources truly reach the communities who need them.

Science also affirms this truth: in the Amazon, Indigenous territories function as net carbon sinks, absorbing more than they emit, while many other areas have already become net sources.⁴ Strengthening Indigenous governance is not only just—it is also the most effective way to protect forests and stabilize the climate.

Forest Trends has also helped pioneer the Equitable Earth standard, designed with and for Indigenous and local communities, to channel finance transparently, with scientific rigor and governance led from the ground up.⁵ Initiatives like this, combined with Brazil’s new safeguards, show that progress is possible when we prioritize equity and rights above short-term gains.

This is not the end of the road—it is the beginning of a new standard for accountability. Brazil’s leadership offers hope, but also sets a responsibility: to prove that it is possible to reconcile policy, finance, and rights in a way that uplifts communities rather than marginalizes them.

The future of climate action will only be credible if it is community-driven and rights-based. Indigenous Peoples and traditional communities have always been the guardians of forests. With clear rules, innovative standards, and recognition of their leadership, they can now help define a more just and sustainable path forward.

Beto Borges is a Brazilian conservationist and Director of the Communities and Territorial Governance Initiative at Forest Trends.

1. Nature4Climate (2022); Ford Foundation (2021): Data on land managed by IPLC and share of direct climate finance.
2. Brito, C. & Santilli, M. (2025). “Novas regras apertam o cerco a projetos de carbono em terras públicas e coletivas.” Valor Econômico.
3. Nature4Climate (2022): Tracking pledges and disbursements for Indigenous and community forest tenure (COP26–27).
4. RAISG & World Resources Institute (2021): Evidence on Indigenous territories as net carbon sinks in the Amazon.
5. Equitable Earth Coalition (2023): Standard for community-centered forest conservation and carbon finance.

The post Brazil’s New Resolution: A Step Forward for Indigenous Rights and Forest Governance appeared first on Forest Trends.

Water is everywhere in our lives: not just in what we drink or use to grow food, but in data centers, cooling systems, energy grids, sanitation, and manufacturing. It powers our economies and our everyday routines.

And in much of the world, water is also the face of climate change. We see it in intensifying droughts, catastrophic floods, and the strain on water infrastructure from rising demand and erratic supply. In fact, not only was 2024 the driest year on record, but it also saw record-breaking floods. These extreme events took lives, displaced communities, and contaminated water supplies.

At the same time, approximately half of the world’s population experiences severe water scarcity for at least part of the year, and 25 countries—home to one-quarter of humanity—face “extremely high” water stress every year. The urgent need to build resilience into our water systems has never been clearer.

Fortunately, one of the most powerful tools to increase resilience is already at hand: nature. Nature-based solutions (NbS)—from restoring wetlands and protecting forests, to improving agricultural practices and naturally recharging groundwater—can play a critical role in securing water resources and buffering communities against climate shocks. When thoughtfully integrated with built infrastructure, like dams and reservoirs, NbS can offer scalable, cost-effective strategies to manage water risk and sustain healthy ecosystems and resilient communities.

Calls to scale investment in NbS have grown dramatically since 2016. Yet despite the headlines and high-profile case studies, it has remained difficult to track whether this momentum has translated into real financial commitments with action on the ground.

Now, we have more data than ever to answer that question. A new report, Doubling Down: The State of Investment in Nature-based Solutions for Water Security, 2025, produced by Forest Trends and The Nature Conservancy, presents the most comprehensive global assessment to date of finance explicitly directed toward NbS with water-related objectives—such as mitigating flood risk, improving water quality, and securing supply.

The clearest takeaway is that investment in NbS for water has doubled over the past decade, growing from approximately US $25 billion in 2016 to reach $49 billion in 2023—equal to one-third of the financial flows into global biodiversity conservation (as estimated in 2019). Public sector funding continues to dominate, underlining the importance of policy frameworks and consistent public investment.

But private finance from the water sector and other funders is also beginning to emerge, which presents new and exciting possibilities for the future of NbS. Understanding how to unlock this funding stream will be critical to scaling the adoption of NbS for water around the world and further mainstreaming its implementation.

NbS for water security are one of the most resilient funding streams, and this report illustrates how even major economic slowdowns like the COVID pandemic failed to dampen investors’ interest.

Even more, investing in nature is popular among the public. Polling shows that there is broad support for natural climate solutions, with 94% of U.S. voters and 84% of Canadian voters in favor of expanding strategies to better manage and restore our forests, grasslands, and wetlands. This support crosses party lines, reaching 99% of Democrats, 94% of independents, and 89% of Republicans in the United States. People across the political spectrum know that protecting and restoring nature is the smartest investment we can make.

NbS can play a significant role in improving water management and security for communities around the world. Innovative watershed protection programs like water funds—the first of which was launched 25 years ago in Quito, Ecuador by TNC and the city’s water utility company—bring public and private stakeholders together to sustainably manage local watersheds. By protecting and restoring ecosystems, these programs support biodiversity in the region while saving cities money and helping them secure a supply of high-quality water for communities.

We’re also seeing what’s possible when national policy and cross-sector partnerships build on local experience and leadership to bring NbS investment to scale. Forest Trends demonstrated the power of this alignment through the Natural Infrastructure for Water Security project in Peru, working alongside government agencies, utilities, engineers, and communities to translate growing interest in NbS into practical mechanisms, capacities, and projects that began delivering NbS investments at scale. In 2023 alone, investment in NbS for water security across 50 of the 53 watersheds of Peru reached over $80 million—7x growth from 2016 and the highest of any country in Latin America. Tracking over 200 projects, including watershed restoration projects that used innovative funding from public investment systems and budgets, this transformation required cross-sector collaboration.

With new data in hand, we now have a clear-eyed view of how governments, investors, and institutions are mobilizing resources—and where the untapped opportunities lie. We hope it helps turn insight into action, accelerating and diversifying finance for NbS, closing the global nature finance gap, and building a more water-secure, climate-resilient future for all.

The post From Crisis to Opportunity: Investing in Nature-Based Solutions for Water Security appeared first on Forest Trends.

Interestingly, Recife sits in the Northeast Region of Brazil, which is also home to the Caatinga biome—one of the most densely populated and biodiverse forests in the world, and the only biome found exclusively in Brazil. This region is no stranger to climate extremes. It lies within Brazil’s semi-arid zone, an area that has expanded significantly since the 1960s and, for the first time, now includes territory classified as a desert climate. 

But the story of the Caatinga is one of resilience. Despite historical waves of migration from the 1930s to the 1970s, local communities have long demonstrated an extraordinary capacity to adapt—not by fighting against drought, but by learning to effectively coexist with it. Their deep-rooted knowledge has given rise to innovative strategies and technologies that reflect an enduring harmony with their environment. 

In this spirit, the International Institute for Environment and Development (IIED), the Pernambuco state government, and numerous partners, including Forest Trends as both a Contributing Partner and founding member of the BASE Initiative, came together to co-host CBA19. Marcio Halla, the Director of the Territorial Governance Facility for the Communities and

 Territorial Governance Initiative (CTGI), represented Forest Trends, continuing a role he played at CBA18 in Arusha, Tanzania. 

At CBA19, Marcio moderated the session “Incorporating Local and Traditional Knowledge into Nature-Based Solutions” and served as a Theme Advisor for the “Nature and Adaptation” track—one of the conference’s three core themes. He also contributed to the Programming Committee and co-authored the event’s final statement, which distilled eleven key messages for the future of community-based adaptation: 

1. Communities should define success and shape learning. 
2. Secure tenure rights. 
3. Nature-based solutions should be recognized as “local culture-based solutions.” 
4. “Business unusual” must become the new usual. 
5. Responsive funding requires an appetite for risk and trust. 
6. Redefine accountability to flow downward to communities. 
7. Climate risk is socially constructed. 
8. There’s no climate justice without gender justice. 
9. Prioritize equity and inclusion in urban planning and policy. 
10. Integrate diverse knowledge systems into climate action. 
11. Intermediary organizations are key to advancing adaptation. 

Echoing one of the conference’s most resonant messages—“Nature-based solutions should be recognized as ‘local culture-based solutions’”—Marcio emphasized the importance of local knowledge: 

“The challenge of adapting to climate change is huge. Local communities and indigenous peoples have the knowledge, through living in their own impacted territories, about the best ways to promote adaptation.” 

As the world continues to confront the escalating impacts of climate change, CBA19 stood as a powerful reminder: meaningful adaptation starts with the people on the frontlines. Their voices must lead the way. 

The post Recife Hosts Landmark Global Gathering on Climate Adaptation: Reflections from CBA19 appeared first on Forest Trends.

After years of development, one might have expected a risk classification tool robust enough to help companies navigate the complex terrain of global sourcing. Instead, the rankings are poised to mislead businesses into thinking certain countries are “low risk” when the realities on the ground tell a very different story.

A Narrow Lens on Risk

At the heart of the problem is the methodology. The EUDR sets out dual requirements: products placed on or exported from the EU market must be both “deforestation-free” and “produced in compliance with the laws of the country of origin.”

However, the EC’s benchmarking appears to focus overwhelmingly on deforestation metrics and existing EU political sanctions—giving little attention to equally critical issues like governance, corruption, and law enforcement capacity. Findings from Forest Trends’ Illicit Harvest, Complicit Goods report further underscore the problem: illegal deforestation and associated commodity trade are widespread in many countries currently labeled as “low” or “standard” risk according to the EC scores. In fact, estimates suggest there is up to 50–90% illegal deforestation in some tropical countries—a level of illegality that cannot be ignored when assessing risk.

This is not a minor oversight. More than a decade of implementing laws like the EU Timber Regulation, US Lacey Act, and Australia’s Illegal Logging Prohibition Act has shown that corruption, weak governance, and limited enforcement capacity are some of the clearest signals of risk—and essential for directing enforcement efforts where they matter most.

Who’s High Risk? Only the Diplomatically Convenient

Surprisingly, only Russia, Belarus, Myanmar, and North Korea were classified as “high risk.” These are all countries already under EU Council sanctions for other reasons, making them politically safe choices with little chance of diplomatic blowback.

Meanwhile, countries with long-standing forest governance concerns—Congo, Central African Republic, Papua New Guinea, South Sudan, Solomon Islands—were all marked as low risk, grouped alongside the likes of Finland, Norway, and the United States. The result is not just misleading—it actively undermines the regulation’s credibility.

Re-Export Hubs and Laundering Loopholes

The inconsistencies continue when it comes to global trade hubs. The risk of laundering and obfuscating origin is real and well documented. Major re-export centers like China, India, and Singapore also receive low-risk labels, despite their documented roles in transshipment processing, and/or re-exporting high-risk materials in ways that obscure original country of harvest. Even more striking is that Turkey and Kazakhstan, which the EC itself has flagged for laundering banned Russian-origin plywood, remain listed as low risk—a troubling disconnect. Without stronger safeguards, the current country classifications could further incentivize this kind of circumvention.

A Better Lens: Forest Trends’ IDAT Risk Scores

To help importers and enforcement agencies,  Forest Trends developed the Illegal Deforestation and Associated Trade (IDAT) Risk scores in 2017, which offer a more comprehensive view of risk by incorporating indicators of governance quality, corruption, law enforcement capacity, and conflict from credible sources, such as the World Bank, UN agencies, the Economist Intelligence Unit, and other global governance and environmental data providers. Combined with commodity-specific legal risk data, this approach yields a clearer picture of where due diligence should be strongest. Despite their diverse origins, these indices show strong alignment in relative country rankings.

The 2025 IDAT Risk scores classify 104 countries as high risk, 54 as medium risk, and 53 as low risk. These classifications offer a sharper, more grounded assessment of supply chains.

Tales of Two Risk Scores: EC vs Forest Trends’ Scores

The Republic of the Congo is labeled “low risk” under the EC’s EUDR benchmarks, yet Forest Trends’ IDAT Risk scores assess it as high risk due to persistent governance weaknesses and its World Bank designation as a state with high fragility. Forest loss surged 150% in 2024, largely driven by illegal logging and unsustainable land use—closely tied to governance and institutional breakdowns. These are not the signs of a low-risk sourcing environment.

Transshipment hubs are overlooked by the EUDR benchmarks, despite the substantial role they play in today’s complex global supply chains. Re-export hubs like China and Vietnam, both classified as low risk, are in fact major importers and processors of raw materials from high-risk countries—often obscuring true origin and complicating verification efforts. Even more concerning, the EC itself has launched investigations into rising imports of banned Russian birch plywood entering through Turkey and Kazakhstan— also countries labeled low risk by the EUDR but higher risk by Forest Trends’ IDAT Risk scores. These gaps suggest that the current classifications will incentivize transshipment and laundering through countries deemed low risk.

The Bottom Line on the EC Scores: Handle with Caution

For a regulation meant to be a gold standard for global deforestation-free supply chains, this first round of benchmarking is a missed opportunity. Without a fuller picture that includes governance, legality, and institutional risk, companies would do well to treat these rankings with caution. Due diligence remains their responsibility—and in many cases, the risks run deeper than the EC’s classifications suggest.

Relying solely on EUDR benchmarks could weaken the very enforcement system they aim to support. To be effective, enforcement and due diligence must be guided by a broader set of indicators—governance scores, conflict risk, corruption levels, and transshipment patterns.

Because even if a country is rated low risk on deforestation, it doesn’t mean it’s low risk on legality. Due diligence and enforcement targeting must be guided by a fuller picture.

The post EUDR Country Benchmarking Misses the Mark: Why Governance, Legality, and Circumvention Risks Matter appeared first on Forest Trends.

Since 2020, we have proudly partnered with the Arbor Day Foundation to plant 1.3 million trees to-date across 1,200 hectares in Brazil, with efforts underway to surpass two million next year. And this isn’t just any ordinary tree planting: our efforts prioritize Indigenous peoples and local communities (IPs & LCs) as key partners, honoring their crucial, longstanding role as forest guardians with traditional knowledge. We work directly with 22 Indigenous peoples across the Amazon and Atlantic Rainforest regions, in addition to family farmers, local cooperatives, and NGOs, to plant diverse mixes of native seeds and seedlings and restore Brazil’s critical ecosystems. These efforts have resulted in more than seven tons of planted seeds, 500,000 planted seedlings, and over 250 hectares of direct sowing in the Amazon and Atlantic Rainforests. 

In celebration of International Forest Day on March 21st, we are reflecting on some of the unique benefits of this partnership and our non-traditional approach to tree planting. Here are seven important benefits of agroforestry you might not have known about: 

1. Increased food security 

Instead of a plantation-style approach, our replanting efforts with the Arbor Day Foundation and IPs & LCs focus on agroforestry, which involves replanting a diverse mix of native trees and plants and incorporating them into agricultural systems. Forests naturally provide essential food sources like fruits, seeds, nuts, and vegetables. Replanting with biodiversity in mind increases the availability of this food for communities and families living on the land.  

2. Recognition of traditional knowledge and practices 

An especially promising technique we use with our partners is called muvuca, which is a traditional replanting method that involves the direct seeding of native plant mixes. The seed mix includes a combination of fast-growing species, like leguminous species such as beans, as well as shrub and tree species that emerge in the medium and long term as part of a mature forest. 

Muvuca also mimics and restores the way landscapes naturally grow. Soils contain a “seed bank” that remains dormant until conditions are right. Using muvuca helps to restore this seed bank and support forest restoration in the long term.

Muvuca is also more efficient than relying only on seedlings. Seedlings take much longer to individually plant and care for, while with muvuca, seeds can quickly be scattered over large areas of land either by hand or with machinery. As we work with the Arbor Day Foundation and partners on the ground to replant 1,200 hectares, muvuca can help us reach this goal faster.  

For an in-depth look at how muvuca works, we’ve just launched a new video in partnership with the Arbor Day Foundation HERE.

3. Improved water quality and quantity 

Planting more trees gives surrounding communities access to cleaner water. As water flows through the soil, plant roots and other microbes in the soil filter out pollutants. When forests are clearcut, the soil becomes unhealthy and is unable to complete this natural service. By planting trees, we are also restoring soil health and ensuring local communities have clean water to drink and grow food. 

Ecological restoration also enhances soil structure and increases its capacity to retain and infiltrate rainwater. This process reduces surface runoff and erosion, allowing more water to recharge groundwater aquifers and feed natural springs. Over time, this can help restore degraded watersheds, contributing to the recovery of stream flows and increasing the availability of water for local communities. 

4. Greater biodiversity  

Agroforestry techniques add important biodiversity back into the forest, both by physically planting a wide variety of trees, but also by creating habitat for native species. Biodiverse landscapes (those with a greater variety of plants, animals, insects, and microbes) are better equipped to withstand climate extremes like droughts and floods. They also support food security; strengthen the economy by providing raw materials for products like wood and paper, food, medicines, lotions and soaps, and clothing; and increase availability of medicines essential for human health—40 percent of which come from nature. 

5. Income for IPs & LCs and other communities 

In addition to harvesting forest products from replanting to use themselves—either for food, medicine, or artisanal products—what is planted through agroforestry systems can also provide new economic opportunities. We plant high-value forest products like açaí, Brazil nuts, and cacao that fetch higher prices in regional and global markets, providing an important source of sustainable income. 

Not only that, but we pay communities for the seeds and seedlings they produce and collect from their lands. This provides another forest-friendly livelihood opportunity and has often resulted in literal “seed money” for communities to launch more formal seed collection businesses. This is also where the benefits circle back around: increasing local capacity for seed collection and plant nurseries helps create a wider network of seed and seedling suppliers for replanting at an even larger scale. 

6. Self-sustaining, resilient communities  

With increased food security and sustainable economic opportunities, communities become well positioned to sustain themselves, their lands, and their families in the long-term, as well as contributing to economic networks on a broader scale. Part of our strategy with the Arbor Day Foundation is to strengthen the capacity of Indigenous peoples, local and afro descendent communities, and family farmers to develop strong, forest-based initiatives of their choosing that align with their cultures and worldviews. In addition to purchasing seeds from communities, we also work with them on trainings, such as satellite monitoring or entrepreneurial skills, and other forms of knowledge sharing. 

When they don’t have to worry about basic needs, communities can also put more time and energy into monitoring their territories. Increased monitoring means communities stand a better chance at eliminating threats to their territories such as illegal logging. They can also conduct more frequent assessments of ecosystem health and biodiversity. 

7. More carbon is absorbed, stored, and converted into oxygen 

Last, but certainly not least, tree planting helps to restore the lungs of our planet. Over half of all carbon stored around the globe is in forests. Not only is this good for the climate, but trees convert carbon dioxide into the oxygen we need to breathe. Some even clean toxins from the air. In fact, a single tree can give four people enough oxygen for an entire day—thank a tree today! 

While this project is part of our broader commitment to restoring Brazil’s critical ecosystems, the cascading impact planting trees can have on economic resilience, biodiversity, food security, and traditional knowledge is significant. This not only drives systemic change by promoting sustainable value chains, but it ensures that conservation and economic growth go hand-in-hand. As a result, our work goes beyond just planting trees. It serves as a model for how large-scale reforestation can be both environmentally and socially transformative. 

Beto Borges is the Director of Forest Trends’ Communities and Territorial Governance Initiative. Ernesto Sanchez Andrade is the Project Development Manager, International at the Arbor Day Foundation.

The post Restoring Forests, Strengthening Communities appeared first on Forest Trends.

Here’s why. In his January 15, 2025 opening remarks before the Senate Foreign Relations Committee, Secretary of State Marco Rubio put it this way:  

 “Every dollar we spend, every program we fund, every policy we pursue must be justified by the answer to one of three questions: Does it make America safer?  Does it make America stronger?  Does it make America more prosperous?” 

One of the most effective ways to answer all three of these questions with a resounding yes is to recalibrate markets to respect nature’s real value. In many parts of the world, we are taking resources from the planet faster than they can be replenished, putting economies on a dead-end path and increasing conflicts over scarce resources. We can use American aid dollars to change how economies interact with nature—whether our water use, the way we grow our food, or our relationship with wildfire. Not only is this aid core to the American ethos of caring about others in need, but this new normal would also create significant benefits that Secretary Rubio wants to see. 

As a team working on forest conservation and sustainable resource management to benefit local communities around the world, some underestimate the power of foreign aid to achieve all of these things. There’s a persistent idea that aid is solely charity rather than an investment with a high return. But our experience on the ground shows how smart foreign assistance serves as a powerful tool that unquestionably makes America, and the world for that matter, safer, stronger, and more prosperous. 

The tools we use – an emphasis on cost-effective nature-based solutions; public-private partnerships; market-based approaches to environmental problems; a focus on building resilient and self-sufficient local communities – have proven to serve multiple US interests while empowering local communities. Here is what we have learned that is highly applicable now. 

At the most basic level, Forest Trends programs help families in rural areas develop sustainable livelihoods tied to keeping forests and landscapes healthy. This gives these communities an economically sustainable future, mitigating the need to migrate. Forest Trends is, by design, a small organization. We focus on building strong, local partnerships that can sustain themselves for the long term. This localization approach – putting local communities in the driver’s seat – creates lasting solutions and more resilient communities because people become invested in conservation and sustainability when it benefits them.  

Here’s where it gets interesting from a foreign policy perspective: when rural families can make a good living from protecting natural resources, they become far less vulnerable to criminal organizations involved in illegal logging or other illicit activities.  

By the same token, when we crack down on illegal trade in timber and other commodities, we remove a major income source for criminal enterprises. We’ve seen how this directly supports US security interests by reducing instability and supporting peacebuilding in strategically important regions, such as Latin America. 

We have also long championed market-based financial incentives for conservation, through carbon markets, payments for ecosystem services, and sustainable supply chain initiatives. These tools offer a carrot to the stick of cracking down on illegal trade. And markets are innovative; over the last 25 years, we’ve seen that when you get the incentive structure right, you unlock a flood of new ways to make sustainable natural resource management more effective, more efficient, and economically fruitful.  

The data we collect backs this up. Our work tracking illegal timber trade shows how criminal networks threatening both environmental and national security can be disrupted through supply chain transparency and accountability. When companies and governments ensure legal, sustainable timber sourcing, it supports rule of law while protecting American businesses from unfair competition. 

Our work on water risk illustrates another key point about stability. When we help communities cooperate to protect shared water resources through improved governance, local capacity, and market mechanisms like water funds, it reduces risks of competition and conflict over increasingly scarce supplies. This matters because water scarcity is a growing driver of instability in many regions, leading to forced migration and conflict.  

These market-like approaches also leverage USAID investments, multiplying taxpayer dollars’ impact by catalyzing private sector investment. An initial $52M joint investments by USAID and the Government of Canada in Peru has resulted in a roughly $400M+ water security project pipeline being paid for by Peruvian water users, public disaster risk mitigation funds, and private companies. This work represents market transformation – the opposite of creating endless aid dependency. 

Indigenous and local communities are crucial partners in our work. We’ve seen time and again that when given proper rights and economic opportunities, they are often the most effective forest guardians. Creating mechanisms for these communities to benefit economically from conservation helps preserve both crucial ecosystems and traditional ways of life. 

Looking ahead, we believe these market-based approaches will become even more important as we seek to mobilize private capital to address issues like water shortages and stress, forest fires, and loss of biodiversity. Building the infrastructure for innovative, legal, and fair markets helps channel private investment toward solutions that benefit both local communities and global stability. This meets America’s priority of having fewer conflicts to manage, and it creates stronger global partnerships. It’s also aligned with our country’s moral identity.

For American companies we work with, these programs help ensure sustainable, legal supply chains for forest products while demonstrating business and environmental leadership, as consumers and investors increasingly demand sustainability. 

The bottom line we’ve learned from our work: smart foreign aid focused on putting an economic engine between conservation and ecological restoration delivers multiple benefits that serve US interests. By empowering local communities, strengthening legal markets, and creating sustainable economic opportunities, we help build the kind of stable, prosperous world that makes America safer and stronger.  

The post Why Foreign Aid Makes Smart Foreign Policy: A View from the Forest appeared first on Forest Trends.

The European Union’s Green New Deal and other environmental regulations are creating opportunities for North American timber producers. Europe needs to reduce its local timber production by approximately 132 million cubic meters over the next decade to meet The EU Green Deal. This reduction will force Europe to seek alternative timber sources, with North America positioned to capture the largest share (38 percent) of this displaced demand, followed by South America (25 percent) and Asia (19 percent).[1]

The EU’s timber supply gap should naturally favor US producers, as North American timber operations typically maintain high standards of forest governance and environmental compliance. In contrast, timber from regions like Asia, Africa, South America, and often re-exported from China often carries higher risks of illegal harvesting, poor forest governance, corruption, and in some cases, links to transnational organized crime — all of which would send up red flags for violations of the EU Timber Regulation (EUTR) and forthcoming EU Deforestation Regulation.

Russian timber threatens to undermine US producers.

However, a flood of illegal Russian timber entering European markets is undermining this trade opening — despite apparent violations of both European sanctions and the EUTR. Several timber species naturally occur in both North America and Russia (such as oak, birch, and pine), making it easy for traders to mislabel Russian timber as North American-sourced material. Russian birch is frequently documented as American white birch or paper birch to circumvent regulations like the US Lacey Act and EUTR, which specifically prohibit the trade in illegally sourced timber products. This illegal Russian timber trade operates through sophisticated laundering operations and circumvention is hard to detected as they re-export from countries such as China, Turkey, Kazakhstan, and Georgia.

Despite sanctions against Russian products, more than €1.5 billion worth of Russian timber has been smuggled into the European Union since June 2022.[2] This illegal trade involves all 27 EU member states and represents approximately 500,000 cubic meters (m³) of timber products, including furniture, flooring, toys, and construction materials. Even major American corporations are unwittingly involved, with illegal Russian wood products finding their way into flooring used by prominent hotel chains including Radisson, Hilton, and Marriott. Earthsight estimates that more than 700 m³ of plywood alone enters European ports daily through third-party countries.[3]

Russian exports of timber products to EU27+European Free Trade Association (EFTA) by trade value

Illegal logging in Russia is widespread.

The scale of illegal logging in Russia is staggering, with estimates suggesting 15-50 percent of all timber harvested in Russia may be illegal. [4] Illegal logging in Russia devastates vast tracts of pristine boreal forest, particularly targeting valuable species like Korean pine and Mongolian oak, which can take centuries to reach maturity. This uncontrolled harvesting fragments critical wildlife habitats home to endangered species like the Amur tiger and Far Eastern leopard, and it removes millions of cubic meters of wood from protected areas. Beyond environmental damage, illegal logging also displaces indigenous communities who rely on forest resources for their traditional ways of life, destroying sacred sites and undermining their cultural heritage and economic survival.

The ripple effects extend globally as this illegal timber enters international markets through elaborate laundering schemes, fueling corruption, enabling organized crime networks, and creating unfair competition that undermines legal and sustainable forestry operations worldwide. This undercuts US producers’ pricing and ability to expand their market access.

Illegal Russian timber can cause market distortion and negative economic impacts for US producers of verified legal and sustainable wood products.

Key consequences include:

1. Price suppression: Illegal Russian timber enters markets at artificially low prices, undercutting legitimate US producers who operate under strict regulatory compliance.
2. Reduced market share: Despite favorable EU policies, US producers that can demonstrate their products as legal and sustainable struggle to capture their expected share of the European market.
3. Unfair playing field: Legal and sustainable US operators cannot compete with the illegal operators that are cutting corners and avoiding compliance with their own national laws and regulations.
4. Investment uncertainty: The unfavorable market conditions created by illegal competition discourage investment in US timber operations. 

Key recommendations based on these findings:

Immediate Actions

1. Encourage Europe, China, and other manufacturing hubs to enhance Supply Chain Verification by implementing stronger mechanisms to verify timber origin, particularly for species common to both North America and Russia.
2. Increase market education by supporting European buyers’ understanding of the risks of accepting timber from third-party countries known to be laundering Russian material.
3. Bolster regulatory coordination between US and EU enforcement agencies to better track and prevent timber laundering.

Long-term Solutions

1. Improve species-specific tracking by improving systems to authenticate the origin of commonly laundered species like birch, pine, and oak.
2. Invest in tracking technologies to create verifiable chains of custody.
3. Create preferential market access mechanisms for verified legal timber sources.

[1] Europe’s Costly Fix: Tackling it’s 132M Cubic Metre Timber Shortfall | Wood Central

[2] https://www.earthsight.org.uk/news/blood-stained-birch-press

[3] https://www.earthsight.org.uk/blood-stained-birch

[4] https://crsreports.congress.gov/product/pdf/IF/IF11114

The post New Opportunities for US Timber Producers Undermined by Illegal Trade from Russia appeared first on Forest Trends.

There is no single or simple solution to the environmental crisis. Transformation of our economic system is required. We must find ways to do less environmental harm by adopting low-carbon, renewable, circular and regenerative products and practices. At the same time, we need to invest much more in inclusive conservation and restoration of nature, for the benefit of all.

The Katoomba Group is a global network of people working to mobilise public funding and private capital to conserve and restore nature in ways that empower Indigenous and local communities. Established in Australia in early 2000 under the leadership of Forest Trends, the Katoomba Group has met 28 times in 16 countries since then. Participants come from international agencies, national and local governments, businesses big and small, public and private financial institutions, Indigenous and local community groups, non-profit and scientific organisations. Group members participate in an individual capacity and not as representatives of the organisations with which they are affiliated.

For its 25th anniversary, the Katoomba Group reconvened where it all began, with a Conference on ‘Real Value for Nature’ on 3 October 2024, at Taronga Zoo Sydney. This was followed by an expert workshop in Katoomba, in the Blue Mountains from 4-6 October, where participants from Australia and around the world reviewed progress in mobilising markets and finance for nature and people over the past 25 years, identified lessons learned, and mapped priorities for the coming years.

It was fitting to host these gatherings in Australia, where Aboriginal and Torres Strait Islander Peoples have continuously cared for the environment for millennia, as the oldest living culture in the world. The participants paid their respects to Elders past and present, and collectively committed to deeper listening to Aboriginal and Torres Strait and other Indigenous voices globally. We also committed to comprehensive and continuous involvement of Indigenous peoples in all aspects of our work.

Key messages from the Katoomba Group meetings in Australia to the Global Nature Positive Summit and related processes are set out below:

1. Indigenous Peoples must be leaders in the transition to Nature Positive economies[1]. This is true everywhere but especially in Australia, where there is growing recognition of the deep knowledge and ability of Indigenous communities to guide the conservation, restoration and management of nature for the benefit of everyone.
2. International meetings scheduled over the next three years offer an opportunity to renew existing commitments and increase ambition, while also strengthening synergies between multilateral environmental agreements, notably the CBD, the UNFCCC, and the UNCCD. Australia’s leadership on the Nature Positive agenda is an important contribution to global environmental policy processes, but only if it is backed by integrated action on the ground.
4. A Nature Positive future requires accelerated reductions in greenhouse gas emissions and increased carbon removals, to enable a rapid transition to a net zero emissions economy by 2050 or earlier. The net zero transition must be grounded in the Environmental Mitigation Hierarchy, which prioritises the avoidance and reduction in harm at source. The transition also requires extended responsibility for emissions, wherever they occur; credible carbon accounting; increased transparency and consistent disclosures; as well as high integrity, independent verification of emissions and mitigation actions.
5. Progress towards a Nature Positive economy requires urgent action to protect threatened terrestrial and aquatic ecosystems from harmful activities, such as deforestation. We call on the governments of Australia and New South Wales, as co-hosts of the Global Nature Positive Summit, to reform outdated environmental policy frameworks, establish truly independent Environmental Protection Authorities, and ensure sufficient funding to deliver actionable, robust and timely information on changing environmental conditions.
6. Stronger protections for nature must be in place in order to deploy human and financial capital in a credible way for conservation and restoration. Governance and finance for nature conservation and restoration must go beyond merely halting degradation to facilitate a rapid transition to a Nature Positive economy that restores ecosystem functions and balance and renews human connections to nature in an integrated way.
7. Markets and financing for climate and nature are key mechanisms to support the transition to a nature positive economy. To deliver their full potential, market-based mechanisms must be integrated, transparent and subject to robust social safeguards that ensure Free Prior and Informed and Continuing Consent, as well as equitable benefit-sharing arrangements.
8. Indigenous peoples, local communities, farmers and smallholders are critical partners in delivering a Nature Positive future. They must be supported to lead and own carbon and nature finance and market ventures in ways that create new jobs, enhance resilience and secure our food systems. Benefits for nature and people should not be seen as “co-benefits” of environmental finance, but as “core benefits” that underpin all investment decisions.
9. Robust accounting and disclosures of environmental impacts and dependencies by public and private entities is necessary to drive the rapid redeployment of finance to support more equitable, climate-friendly and nature positive outcomes. Countries should move quickly to establish mandatory reporting, aligned with the recommendations of the TCFD and TNFD.

As a contribution to the agenda set out above, members of the Katoomba Group meeting in Australia agreed to a range of new initiatives, including:

• Support Indigenous leadership and youth engagement in environmental finance, notably the National Indigenous Environmental Research Network launched by NAILSMA in Australia.
• Develop coordinated positions and inputs to multilateral environmental agreements and related initiatives, notably the TNFD and the Greenhouse Gas Protocol, including the timely release of a Removals Standard that aligns with IPCC accounting for forestry.
• Identify opportunities to raise new and additional private finance for nature, such as buyers’ roundtables, advanced market commitments, treating ecosystems as public utilities, etc.
• Build awareness and capacity for natural capital accounting in business and provide timely data on natural capital impacts and finance initiatives for nature, starting in Australia.
• Communicate and engage stakeholders everywhere on the potential, limitations and opportunities to strengthen market-based tools for nature.

Given the urgency of winding down fossil fuel extraction and consumption, we call on Australia and other countries to ensure that all fossil fuel projects pay a major share of revenues into sovereign funds, with the proceeds used to protect, enhance and restore nature. Precedents for this can be found around the world, including the Alaska Permanent Fund and the Land and Water Conservation fund in the US, Norway’s sovereign wealth fund and others. Australia should establish similar funding arrangements, with a substantial share of revenues channelled via Indigenous peoples, who are likely to be among the most affected by climate change and also among the best stewards of nature.

[1] This statement uses the term ‘nature positive’ as articulated by the Nature Positive Initiative (https://www.naturepositive.org/app/uploads/2024/02/The-Definition-of-Nature-Positive.pdf).

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In 2023, Blue Carbon, a Dubai-based company, signed a Memorandum of Understanding with the Liberian government for exclusive rights to generate and sell carbon credits on approximately 2.5 million acres of Liberia’s forests. Concerns were immediately raised about the lack of transparency, impact on local communities, customary land rights, and the Government of Liberia’s legal framework for issuing, selling, or taxing carbon credits. Critics argued that the Blue Carbon deal potentially violated several key laws in Liberia, including the Constitution. 

Also in 2023, Forest Trends released the Liberia Forest Concession Review (Phase II), a report evaluating the legal compliance of Liberia’s forest concessions. The Review found widespread non-compliance across all stakeholders. After a legal analysis of 11 companies and more than four public consultations, it found that companies did not meet basic legal requirements; that Liberia’s Forestry Development Authority (FDA) was illegally issuing logging licenses; that communities affected by logging have only received at most 15 percent of the compensation they are owed; and that grossly inadequate record-keeping by the FDA have made it impossible to ensure legal compliance in the forestry sector. 

With these findings, the Forest Concession Review recommended a suspension on all new forestry licenses—for any uses, including carbon—until the FDA can demonstrate their ability to manage the forestry sector and enforce Liberia’s own laws. This begins by ensuring the existing operators are brought into compliance. The suspension must also be paired with massive improvement in the FDA’s management of Liberia’s forestry sector. If not, existing operations could be replaced with concessions that continue to exploit Liberia’s forests. 

Based on these recommendations, we are glad to see the NCCSC consider a temporary halt on carbon trading. The light our report sheds on the state of Liberia’s forestry sector should heighten concerns about carbon credit deals that do not clearly outline methodology, community benefit-sharing mechanisms, or other safeguards for communities and forests. A forestry sector without a system to track and enforce forest activities all but invites a free-for-all for potential bad actors. Strong forestry governance is critical to reduce illegal logging, improve community benefit-sharing mechanisms, and increase sustainable management of Liberia’s forests. And as countries work toward decisions on Article 6, good governance will be a vital part of making a national carbon market system work for forests, communities, and governments. 

The post A first step toward high-integrity carbon credits in Liberia appeared first on Forest Trends.

This conversation has been edited and condensed from its original version.

Beto Borges: I appreciate you taking the time for this conversation, André. Reducing deforestation is top-of-mind for countries around the world right now, especially with the EU’s new Deforestation Regulation (EUDR), which aims to eliminate all deforestation – legal or not – from the supply chains of agricultural products entering EU countries.

I think Brazil is in a unique position. It is a major source of key agricultural products often linked to deforestation, like beef and soy, yet Brazil’s new government under President Lula and Minister of the Environment, Marina Silva, have also had immense success reducing deforestation rates since they took office at the beginning of 2023. I’d love to hear about some of your strategies for protecting Brazil’s critical forest landscapes, with particular emphasis on what this all means as you’re thinking about the EUDR going into effect at the end of this year.

In fact, I understand you recently had a press conference with Minister Silva where you shared some of Brazil’s latest data on deforestation reduction. What did you all speak about there?

Secretary Lima: Yes. Brazil’s National Institute for Space Research works with our Ministry of Science, Technology, and Information to estimate deforestation rates by analyzing satellite imagery. We recently published data showing an almost 22 percent reduction in deforestation rates in the Amazon from August 2022-July 2023 compared to the same previous period (August 2021-July 2022). It’s also important to note that when this government came into power in January 2023, deforestation rates were increasing by 55 percent. So, in six months, we not only stopped the increase, but reversed it.

Our data also indicate that this drop has continued since July of last year, showing a 55 percent decrease in the deforestation rate in the Amazon from August 2023-April 2024 compared to the same previous period (August 2022-April 2023). These numbers are a positive signal that our current policies are having a significant impact in the Amazon as we work towards our goal of zero deforestation by 2030.

Beto Borges: That’s wonderful to hear, André. Congratulations.

Secretary Lima: Thank you, Beto. However, there are some concerning aspects of these data, too. In the Cerrado, which is a tropical savanna and another critical biome for biodiversity and carbon sequestration, deforestation rates are increasing. From August 2023 to April 2024, deforestation rose 27 percent. This biome is where we want to focus our efforts next.

The element of legal versus illegal deforestation comes into play here as well. The amount of deforestation allowed varies in different biomes in Brazil. For example, in the Amazon, Brazil’s forestry legislation designates 50 percent of all land as protected, meaning no deforestation is allowed. In the other 50 percent, we require that all landowners, including local and indigenous communities, preserve at least 80 percent of their land. So, we can usually infer that much of the deforestation happening in the Amazon is illegal.

In the Cerrado, on the other hand, under 15 percent of lands are protected, and Brazil allows up to 80 percent legal deforestation on private lands. The agricultural sector has a strong presence here as well. It is critical to prevent further land degradation in the Cerrado, which is experiencing the brunt of climate change in Brazil. Between higher temperatures, stronger droughts, and increased fire risk, it’s a lose-lose situation for both the environment and the farmers who depend on it for their livelihoods. Given the EUDR’s strict limitation on even legal deforestation for agricultural production, it can be an important tool to help disincentivize what is still considered legal deforestation in Brazil and encourage more sustainable agricultural production.

Beto Borges: You bring up illegal versus legal deforestation. The EUDR skips over illegal deforestation, going straight for all deforestation. In my work at Forest Trends, we support a combined approach, where best practice is to eliminate illegal deforestation while encouraging sustainable forest management. This raises the floor, forcing laggards to step up and countries to begin a larger shift towards more sustainable supply chains. From here, it’s easier to aim for zero deforestation, while at the same time providing support to local producers as they shift their livelihoods.

I’d be interested to hear your take on this. What does your path to zero deforestation look like?

Secretary Lima: Thank you, Beto. That is an important distinction. In Brazil, we believe illegal deforestation is a pillar of zero deforestation. If we are going to get to zero, we need to strongly combat illegal deforestation. Many of those in the government view the EUDR as something imposed on us without any consultation or open dialogue, putting a burden on Brazilian production. This administration is extremely motivated to put a stop to all deforestation, and the EUDR interferes with our sovereignty to do so on our own, based on what is best for our people.

To reach zero deforestation, we need both legal and economic tools. That means enforcing laws against illegal deforestation, while also using economic incentives like direct payments, payments for ecosystem services, and project- and jurisdictional-based REDD+ to discourage legal deforestation.

That said, I do think the EUDR will support our work towards zero deforestation by shifting economic incentives. The way our agricultural systems are set up, there is currently a lot of economic pressure to deforest in Brazil and across the world. But when a major importer of Brazilian products won’t buy anything linked to deforestation, it removes that pressure to deforest. This will greatly support supply chain transparency and rural landowners to comply with Brazilian environmental legislation.

Let me give an example of how these legal and economic tools can work together using a common situation in Brazil: a person or company will buy a plot of public land on the cheap, or illegally acquire it, and then deforest to profit from the timber sale. Once it has been cleared, they will often raise livestock on it, and then sell the land to grow more agricultural products, like soy. Now there is an entire chain of products over several years all linked to deforestation on the same plot of land.

However, to establish a cattle ranch on deforested land, people need a permit. Something we’re already doing internally is preventing permits from being given to anyone who has deforested illegally. In this situation, the EUDR is an excellent complement. While we are squeezing out illegal deforestation, the EUDR acts as an additional incentive against legal deforestation. The Ministry of Environment’s goal is that we will one day no longer issue cattle permits for even legally deforested land.

Beto Borges: That’s a great point, André. I see how the EUDR can complement some of the deforestation policies Brazil already has in place. I also want to raise a common critique of the EUDR: that it leaves smallholder farmers unsupported. How will the legislation affect Brazil’s small-scale producers who may not have the resources to shift towards more sustainable land management, or who may feel pressure to deforest to support themselves?

Secretary Lima: Thank you for raising that point, Beto. This is a problem we are facing. Let’s look at the cattle supply chain, for example, which accounts for almost 70 percent of deforestation in Brazil.

Livestock farming happens in three phases often carried out by separate smallholders: breeding, raising the cattle, and slaughter. Traceability between these three phases still has many challenges, and the EUDR will require clear visibility into each of these phases. Much of the breeding is done by smallholders, many of whom are lacking financial support or technical assistance and are often operating on deforested land. Even if the smallholders breeding cattle stop deforesting, they can’t control the smallholders who are raising and slaughtering the cattle. If one part of the supply chain deforests, the rest of it suffers.

Beto Borges: Does Brazil have any strategies in place to better position local producers to comply with the EUDR?

Secretary Lima: One program we currently have in place is called the Union with Municipalities to Reduce Deforestation and Forest Fires in the Amazon. The program was created by the Ministry of Environment in partnership with the National Institute for Colonization and Agrarian Reform, the Ministry of Agrarian Development, and the National Rural Extension Agency. We identified 70 priority municipalities for reducing deforestation and invited them to join this program. Currently, 48 of the 70 priority municipalities have joined.

Local municipalities part of the Union will receive funding, technical assistance, and support building sustainable livelihoods in exchange for reducing their deforestation rates. We are also working to ensure land titles for local, smallholder farmers. Legal acknowledgement of their lands is a critical first step to support better land management and keep out encroaching deforestation.

For example, the municipality of Lábrea in the state of Amazonas has typically had some of the highest deforestation rates in the Amazon. However, there was also a major drop in deforestation here from 2022-2023. We are working to have them join the Union, where, in addition to funding and technical assistance, we will support the development of a governance system to help communities protect their lands and maintain good land management practices long term.

The goal of this program is two-fold: first, we want to create positive associations with reducing deforestation. Beto, you mentioned local communities who often feel pressure to deforest to support themselves. One avenue is regulation, like the EUDR, which punishes those who deforest. Instead, we want to reward those who don’t, because keeping forests standing means they will receive essential livelihood support. We’re reframing the idea that deforesting is most profitable, when in fact, not doing so can have just as many benefits, if not more.

Second, putting these structures in place at the local level can help ensure longevity. When local people are driving the change, equipped with the capacity to maintain sustainable livelihoods, their ability to support themselves can transcend national administration changes.

Beto Borges: This is an excellent strategy, and one we are very familiar with at Forest Trends. In Brazil, we work with local and indigenous partners to build local economic initiatives that provide stable livelihoods while being forest friendly. In this way, we are shifting entire value chains to not depend on deforestation.

Secretary Lima: Yes, if we are truly going to eliminate deforestation, we must change the economic incentives behind it. It’s not enough just to pass an import regulation. Shifting the economic system behind deforestation means people will choose to keep their forests standing, and not just because a regulation is forcing them too. We also need international investments to make the regulation effective, including direct support for smallholders and finance for other mechanisms like REDD+ and the Tropical Forests Forever fund. Eliminating deforestation in the Amazon and Brazil’s other biodiversity hotspots is essential for global climate goals, not just for Brazil. It is a goal we must work together to achieve.

Beto Borges: Yes, André. Thank you so much for your time today. Wishing you success in your work.

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