DEFORESTATION: GETTING TO THE ROOT OF THE PROBLEM Agriculture – both commercial and subsistence – remains Exhibit 2: Deforestation in tropical and subtropical the greatest threat to forests as shown in Exhibit 2. forests by cause Commercial agricultural activities include exports of cotton, soy and palm oil, while subsistence agriculture 45% refers to meeting the needs of local communities. This 40% data shows that despite e昀昀orts and improvements on 40% several fronts, forests remain under threat. 35% 33% 30% 25% DID YOU KNOW? 20% Palm oil is one of the main drivers of global 15% deforestation with 85% of this commodity produced 10% 10% 10% in Malaysia and Indonesia, causing a signi昀椀cant 7% 5% and localised issue. Recent research suggested that 0% deforestation due to palm oil had peaked in 2016 and 12 then fallen below 2004 levels. However, this appears Commercial Subsistence Urban Infrastructure Mining to have been driven by weak pricing. The rising in昀氀ation agriculture agriculture expansion of 2022 has renewed interest in expanding the supply of palm oil. Pricing is now half of that year’s peak, but Source: FAO, The State of the World Forest 2020 the focus is now to ensure any new plantations are both environmentally and socially sustainable. Evidence 13 points towards a slow improvement in this situation. Five important roles of forests 3. Ecosystem balance: forests are critical to maintaining the important balance and diversity The role of forests is critical and multi-faceted. This has of ecosystems. Around 60,000 tree species, 68% implications for climate change, biodiversity issues, and the of mammal species, and 75% of bird species 14 support of communities. are living in the world’s forests. Disappearing forests are taking many species to the brink of 1.Water management: the risks associated extinction. The loss would be catastrophic on with the destruction of forests include higher its own, but a decline in biodiversity can have land erosion, reduced soil fertility, and increased material 昀椀nancial impacts. This is especially 昀氀ooding. Land erosion can impact neighbouring true for industry sectors like pharmaceuticals, waterways resulting in marine pollution, further materials, and chemicals where innovation is pressuring local biodiversity and communities. dependent on a diverse mix of animal and plant species. 2. Carbon absorption: healthy forests are natural carbon sinks – they absorb carbon dioxide 4. Social inclusion: many communities depend from the atmosphere through photosynthesis on forests for their livelihood, culture and way which is then captured in the trees and forest of life. Deforestation can risk a community’s soil. In contrast, degraded forests can be a income and health, posing a physical risk from source of carbon emissions. Protecting forests the impact of extreme events such as 昀氀ooding. is critical as 昀椀res or even decaying wood will result in the release of stored carbon back into 5. Disease prevention: the removal of forests the atmosphere. Sustaining forests to allow can lead to closer interactions between wild for their role as net absorbers of carbon is vital animals and humans. This could increase the for achieving decarbonisation targets and risk of viruses and diseases spreading and the 15 supporting the collective global goal of a clean introduction of new epidemics. energy transition. 3