Innovative Financing For Sustainable Forest Management

Joshi, Mahendra (1998)
UNDP Programme on Forests (PROFOR)

The financing - from existing as well as yet to be identified sources-committed to global sustainable forestry is the focus of this paper. This financing in the forestry sector includes the costs of creating, managing, and conserving forest resources, and establishing facilities for the production and marketing of forest products and services. In developing countries, investments are required not only for forest resource development (e.g., plantations, silvicultural operations, natural forest management, etc.) and the forest products industry, but also for national forestry institution-building (administration, policy, law, planning, national and local capacity, etc.), research, education and extension, and market development.

This paper reviews the financing situation, summarises initiatives and issues in financing since the United Nations Conference on Environment and Development in 1992, and highlights opportunities for and constraints on mobilising investments in the forestry sector. It also describes some innovations already in place in different countries through domestic public, domestic private, foreign (international) public, and foreign private sources of investments. Emerging concepts of global environmental revenue-generating mechanisms applicable to forestry financing are explored, as well as public-private cooperation in leveraging new funding sources for sustainable forest management.