November 17, 2023

The Role of Forests in Climate Action

Forest Insights

Part 1: Forests are more than trees and landscapes are more than forests

Throughout human history, forests have evoked profound emotions. Centuries ago, dense forests were largely seen as frightening and dangerous places. As societies evolved and populations expanded, forests became increasingly exploited for their timber and energy resources, with little regard for their ecological value. Today, forests hold much more worth and there are increasing efforts to include principles and standards in management decisions. Few topics remain as contentious as forests, with debates spanning economic, social, political, and scientific boundaries. People value forests that exist tens of thousands of kilometers away that they will likely never see or experience in real life.

From a climate change perspective, forests play a crucial role in storing vast quantities of carbon and continue to sequester large amounts of CO2 annually. They are a vital component of the global carbon cycle, without which the current climate situation would be considerably worse.

The vastness of forests is matched only by their diversity. This diversity means that there are few fixed rules that can be applied to forests as a whole. Retaining natural forests, restoring degraded forests and replanting areas previously lost is going to be vital to our ongoing efforts to address climate change and restrict biodiversity loss.

Despite these imperatives, substantial areas of forest continue to be lost and degraded globally every year. Numerous efforts have been established that have had local success, but the overall trend is alarming. From a climate mitigation perspective, the past two decades have been filled with talk and promises, but frustratingly has resulted in little action or success. While we rightly celebrate a few success stories, this focus can create a misleading impression that things have improved more than they have.

In this series of papers, we will summarize our decades of experience in carbon management within the land sector and outline our external policies on forests.


The title of this paper series may seem obvious, but coming out of this year’s Climate Week and as we head into another UN Conference of Parties in Dubai, the issue of trees, forests, and landscapes remains confusing for many looking to invest in forest-based climate action. Commitments to restoring forests will be coming thick and fast, and groups will be pitching their programs off at least one of the following three ‘announceables’:

  • Planting ‘x’ number of trees (normally with lots of zeros),
  • Protecting, restoring or reforesting areas ‘y’ hectares of forest (often translated to football fields)
  • Enhancing entire landscapes, including areas of forests.

Within this set of ‘announceables’ will be some additional information on the purpose of the programs, which will range from climate mitigation, carbon credits, protecting and restoring of natural systems, improved forest management, sustainable agriculture, poverty alleviation to pure financial returns. These will be promoted by an equally wide range of organizations from community based programs, through to fully commercial operations focused on wood and fiber products.

Along with these announcements will be a request for investment in them. All investors want to know what the return on investment is, ranging from a pure financial perspective through to the ‘impact’ of investment in broader terms with a focus on reputation and social license.

With such a diverse set of messaging around a similar set of activities, there is little wonder why there is confusion in the market about what each group is actually offering, and how this links to climate action and what the return on investment is and how it can be delivered.

While it can be a challenge to decipher all of these types of announcements, there are a few simple rules and processes that can help you understand the project you are investing in.

In this set of papers we will deal with the most obvious starting point: what are you actually paying for - trees, forests or landscapes - and what is the climate outcome?

Stop paying for ‘numbers’ of trees...

‘Tree number planted’ commitments have always been popular, reaching a zenith with the 1 trillion trees papers and programs of the past four years. Marketing teams in particular love tree numbers because 1) they sound impressive - planting one million trees sounds better than establishing one thousand hectares of forest; 2) people can easily relate to tree planting, and 3) just planting trees is cheap. People also love the idea that they are planting something that they believe will grow and live for centuries and help support life. 

In reality, large, old trees are truly the great survivors. For every tree that reaches 100 years old, hundreds, if not several thousand, do not. Trees compete with other trees, are damaged and killed by disturbances like fire or pests or harvested by humans. The actual number of trees that won’t make it depends on the number of trees at the start, which can range from fewer than 1000 trees per hectare in planted forests to more than 50,000 trees per hectare in naturally regenerating or seeded forests.

Should the tree you paid for reach 100 years of age, it is one of the lucky ones.

So why not just plant fewer trees at the start? The operational science of tree planting is well established, and is supported by three of the very few ‘general laws’ of biology: carrying capacity, sigmoidal growth and self-thinning (Figures 1-3).

The concept of site carrying capacity - that is, the maximum biomass a forest can reach is constrained by the site conditions for the species present - is almost as old as forestry itself. Sites with better site conditions (e.g. more rain, better soil) will typically have a higher maximum biomass than a site with poorer site conditions. The global range is between 50 to >2000 tonnes of biomass per hectare, about half of which is carbon, with most mature forests holding between 200-600 tonnes biomass per hectare.

How a forest grows towards this maximum also depends on multiple factors, but in general growth starts slowly, accelerates to a peak around canopy closure, (when the individual trees start to compete for resources), then slows as it approaches the maximum. This is often referred to as sigmoidal growth.

Some forests may never get near their maximum due to harvesting or disturbances, others may stay there for a long time, but the overall pattern holds true, with disturbances moving the forest between points on the curve.

Carrying capacity and sigmoidal growth help define biomass at points in time, but don’t specify if the biomass is held in many small trees, or a few large ones. Enter the Self-Thinning Law (SLT), one of the most interesting general rules in biology. The SLT dictates the maximum number of individual trees that the total biomass can be held in. Planting a very large number of trees initially, means the forest will reach the self-thinning limit more quickly, and trees will start to die as biomass increases. Alternatively, planting fewer trees means it will take longer for the forest to start thinning out.

Combining these three concepts provides the following rules of thumb:

Planting too many trees on a site will:

  • Increase early growth as the site capacity is reached more quickly,
  • Not change the final potential biomass
  • Lead to greater tree mortality starting at a younger age.

Planting too few trees on a site will:

  • Lead to slower initial growth
  • Not change the sites potential biomass, unless the planting rate is so low that site capacity will never be reached
  • Lead to reduced individual tree mortality in the short term.

Planting rates need to be based on the site conditions and the desired outcome. Rates can vary from fifty trees per hectare for providing shade in cropping systems through to several thousand when needing to rapidly occupy a site. On average, a good rule of thumb for most forest types is between one to two thousand trees per hectare (but there are very good reasons for going lower or much higher in certain circumstances). The key is to balance the cost of planting with growth rates and ensuring the forest will survive, accepting that most trees will not survive the first century. The loss of trees from thinning (partial harvesting) or mortality is fine as planting costs represent a small fraction of the total cost of forest restoration. High-quality site preparation to ensure success combined with ongoing management and monitoring will typically be at least five times the cost of tree planting itself.

The result needs to be a balance of cost and meeting medium to long-term objectives.

Figures showing forest dynamics for a site with high (a) and low (b) planting rates.

Figure 1: Shows carrying capacity and growth for a site - the number of tree planted increases initial growth but not the site capacity.

Figure 2: The Self thinning Law showing mortality of trees starting at a lower site biomass for planting rate (a) but with tree numbers eventually meeting.

Figure 3: All three concepts represented in one figure.

So, why does all this matter to investors?

There are 4 key reasons:

  1. ‘Per tree’ investments create a perverse incentive for groups to plant too many trees on a site. Land is finite and expensive and site preparation is costly, and so groups can resort to overplanting.
  2. Focusing on tree planting rather than establishing a healthy forest means that high-quality site preparation, ongoing monitoring, and remediation activities are ignored, leading to greater failures in the medium-long term.
  3. The carbon removal estimates can be grossly overestimated. Groups that quote tree-level carbon removal estimates (e.g., each tree planted will remove x kg of CO2 in its lifetime) often ignore tree mortality. As most trees will not survive in the long-term, the approach of ‘No trees planted x average tree carbon’ will vastly inflate the true carbon sequestration potential.
  4. The number of trees planted method ignores the site conditions that drive carbon removals. Why, how and where the trees are planted is far more important than the number planted. Add into this the complex interactions of management, disturbances and natural processes on carbon stocks and it is clear that tree numbers are meaningless in this context. 

This is not to say that knowing tree numbers is irrelevant. From a management perspective it is vitally important. Quality developers know the areas they want to establish and the funding they need to do this. With this information they estimate the number of trees they need to to establish new sites and infill areas that have failed in previous years. They conduct survival studies to ensure the planting success and to inform future plantings - knowing what worked and what didn’t and adjusting your practices is the sign of a mature operation. It is easy to underestimate the logistics of arranging millions of trees to be grown in a nursery, preparing sites and getting the trees to those sites and planted.

For investors, the return on investment is the outcome, not the inputs. Knowing that an organization has high-quality systems in place for raising, planting and maintaining trees should provide confidence that the outcome will be achieved, but all these are still just inputs. Those looking at investing in forest restoration projects should be cautious when being pitched individual tree numbers as the main metric, especially when this is being related to carbon removal estimates. The real challenge in establishing forests is not planting the trees, but making sure enough survive to form a functional forest that meets the desired outcomes.

In our next paper, we will be discussing the issues of using forest area and function as a metric for investing in restoration.