Rural development strategies often neglected forests in the past, but in the last two decades the attitude of policy makers and the interests of public and private inves-tors have changed considerably. Although the forestry sector has inherent charac-teristics that increase the complexity of investments, forest financing has grown in importance and became a focal point for the implementation of rural development policies. More than 600 different major financial actors invest in forestry world-wide. They are conventionally distinguished as private, i.e. profit oriented inves-tors, or public, i.e. development oriented investors. As regards finance instruments in use, they could be distinguished as conventional (i.e. also utilized outside for-estry), or innovative ones (i.e. forestry-specific). According to UNEP figures, USD 64 billion have recently been invested in the forest sector every year, but global need for funding for sustainable forest management is estimated by the Col-laborative Partnership on Forestry to be between USD 70 and USD 160 billion per year. While direct public sector investments in forestry played a decisive role in the past, recent figures show that they are generally stable or declining, especially with regard to bilateral flows. At the same time private sector direct investments are on the increase, but they remain concentrated in a few countries. In the near future private forest investments will probably be mainly in planted forests. A consequent global shift in the industrial wood supply from temperate to tropical zones and from the Northern to Southern hemisphere is predicted by several stud-ies. Financial flows for investments in the timber sector will shift accordingly: this progress is not free of social and environmental risks. While the forestry sector presents new business opportunities for private operators, specific international and national policy tools for the governance of the changes are greatly needed.

Financing forests for rural development

PETTENELLA, DAVIDE MATTEO;MASIERO, MAURO
2013

Abstract

Rural development strategies often neglected forests in the past, but in the last two decades the attitude of policy makers and the interests of public and private inves-tors have changed considerably. Although the forestry sector has inherent charac-teristics that increase the complexity of investments, forest financing has grown in importance and became a focal point for the implementation of rural development policies. More than 600 different major financial actors invest in forestry world-wide. They are conventionally distinguished as private, i.e. profit oriented inves-tors, or public, i.e. development oriented investors. As regards finance instruments in use, they could be distinguished as conventional (i.e. also utilized outside for-estry), or innovative ones (i.e. forestry-specific). According to UNEP figures, USD 64 billion have recently been invested in the forest sector every year, but global need for funding for sustainable forest management is estimated by the Col-laborative Partnership on Forestry to be between USD 70 and USD 160 billion per year. While direct public sector investments in forestry played a decisive role in the past, recent figures show that they are generally stable or declining, especially with regard to bilateral flows. At the same time private sector direct investments are on the increase, but they remain concentrated in a few countries. In the near future private forest investments will probably be mainly in planted forests. A consequent global shift in the industrial wood supply from temperate to tropical zones and from the Northern to Southern hemisphere is predicted by several stud-ies. Financial flows for investments in the timber sector will shift accordingly: this progress is not free of social and environmental risks. While the forestry sector presents new business opportunities for private operators, specific international and national policy tools for the governance of the changes are greatly needed.
2013
Forests and rural development
9783642414046
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11577/3041966
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