The world forests are dangerously underfunded, with a staggering $216 billion annual finance gap that must be filled by 2030 to meet global climate, biodiversity, and land restoration goals, according to the State of Finance for Forests (SFF) 2025 report titled Unlock. Unleash. The report warns that current funding levels are far from sufficient to meet the targets set under the Rio Conventions and calls for tripling annual investments in forests from $84 billion in 2023 to $300 billion by 2030.
Public funding continues to dominate global forest finance, accounting for 91% of total investments, while private finance contributes less than 10%. The report highlights the need for a major shift toward private and blended financing to close the growing gap. It estimates that by 2050, annual investments will need to rise further to nearly $498 billion to sustain long-term forest conservation and restoration efforts.
“Achieving global climate, biodiversity, and land degradation neutrality requires a massive scaling-up of nature-based solutions (NbS) and forest investments,” the report said. It called for expanding protected and restored forest areas by an additional one billion hectares by 2030 and 1.8 billion hectares by 2050.
Governments remain the primary funders of forests, with domestic spending contributing $75 billion of the total $84 billion in 2023. Only $2.9 billion came from international public finance, of which around 80% was in the form of concessional official development assistance (ODA).
India ranked among the top 15 recipients of international forest finance, receiving $81 million in 2023. However, its domestic expenditure on forests and related sectors stood at $7.1 billion significantly higher than external support. India’s spending ranked third globally after China ($19.4 billion) and the United States ($11.7 billion). The report noted that India’s public domestic spending primarily supports agriculture and forestry, underlining the critical role of national financing in tropical forest nations.
Despite this, only 17% of total global domestic government spending on forests is directed toward tropical forest countries, even though these regions host the most critical biodiversity hotspots. The report estimated that by 2030, tropical forest nations will need $67 billion annually for key nature-based solutions such as avoided deforestation, reforestation, agroforestry, and protection of forest peatlands.
Protecting intact tropical forests remains among the most cost-effective climate strategies, the report noted, as it delivers immediate emission reductions and helps meet the global goal of halting deforestation by 2030. Restoration efforts alone will require around $33 billion annually to regenerate degraded land, while agroforestry will need $18 billion each year to integrate trees into agricultural landscapes and support rural livelihoods.
The voluntary carbon market (VCM) a major source of forest-related finance, has seen volatile trends rising from $320 million in 2019 to $2.1 billion in 2021 before falling sharply to $755 million by 2023. Despite the downturn, forest-related carbon projects continue to dominate, accounting for about half of the total VCM transaction value. In 2023, combined finance flows from voluntary and compliance carbon markets totaled $1.3 billion, with REDD+, afforestation, and reforestation credits making up nearly half the share.
However, the report warned that harmful financial flows continue to undermine forest conservation. Private financial institutions have provided $8.9 trillion in active financing to companies with high deforestation risks as of November 2024, while environmentally harmful agricultural subsidies reached $406 billion in 2023.
The report concludes that reversing forest loss and degradation will require aligning financial systems with climate and nature goals mobilizing both public and private capital at unprecedented scales.