How the world's forests became a climate battleground

A mature tropical forest is one of the most productive carbon-capture systems on Earth. Trees absorb carbon dioxide as they grow, storing it in wood, roots, and soil. The world's tropical forests together hold more carbon than has been emitted by burning fossil fuels in the past two centuries. That makes their fate one of the most consequential variables in global climate projections, and it explains why forest cover has moved from an environmental concern to a geopolitical one.

Where the world's forests are, and where they are disappearing

The largest continuous tropical forest systems are in the Amazon basin of South America, the Congo basin of central Africa, and the islands of Southeast Asia, particularly Indonesia and Malaysia. Together these three regions hold the majority of the world's tropical forest carbon. Deforestation rates vary by region and by year, driven by the economics of agriculture, cattle ranching, timber, and mining. Conversion of forest to soy farmland or cattle pasture in the Amazon, palm oil plantations in Southeast Asia, and charcoal production in the Congo are among the dominant drivers.

Temperate and boreal forests in the northern hemisphere have actually grown in area in recent decades as farmland was abandoned in parts of Europe and North America. But these forests store less carbon per hectare than tropical systems and are increasingly vulnerable to wildfires as temperatures rise.

How forests became a carbon accounting question

Under international climate agreements, countries are expected to account for land use changes, including forest cover, in their national greenhouse gas inventories. This opened the door to a market logic: if standing forest has a calculable carbon value, then preserving it could generate credits that other parties could purchase to offset their emissions. The voluntary carbon market and government-backed mechanisms under the United Nations Framework Convention on Climate Change both operate on this principle.

The mechanics have proven contentious. Measuring exactly how much carbon a given forest patch stores, and how much would be released if it were cleared, requires satellite data, field surveys, and agreed methodologies. Verification is expensive and sometimes disputed. There have been documented cases where carbon credits were issued for forests that were never at serious risk of being cleared, meaning the claimed climate benefit did not materialise.

The sovereignty tension

Forest nations resist the framing that their trees are a global public good for which they must forgo development. Brazil, Indonesia, and Democratic Republic of Congo have each at different times pushed back on what they characterise as wealthy countries wanting to lock up their forests while having already cleared their own. The counter-offer from the international community has been financial: payments for ecosystem services, development finance, and debt-for-nature swaps. The amounts on offer have consistently fallen short of what forest nations say would be needed to make conservation economically competitive with clearing.

What it means for Australia

Australia is both a user of forest carbon credits in its domestic climate policy and a country with significant native forest cover of its own. The Australian carbon credit unit scheme includes methodologies for avoided deforestation and reforestation. Australia also has diplomatic interests in the forest debate through its relationships with Indonesia and Pacific island nations, many of which depend on intact ecosystems. As a major agricultural exporter, Australia watches how deforestation regulations in Europe, which restrict imports linked to forest clearing, reshape global commodity trade.

The bottom line

Forests sit at the intersection of climate, sovereignty, and development finance, and no international mechanism has yet resolved the tension between their global value as carbon stores and the local economic pressures that drive their removal.

This article was compiled by AI and screened before publishing. See our editorial standards.