Economic benefits of saving the Rainforests

Oct 24 2020



Updated December 20, 2022 / Originally published October 24, 2020

Our planet is ringed with breathtaking, richly biodiverse tropical forests – from the Congo in Africa to forests throughout equatorial Asian and Pacific nations to the iconic Amazon in South America. But despite their critical roles in sustaining life and slowing climate change, nearly all are at risk. Luckily, swift action and innovation have the power to save these biomes from the brink if we act before it's too late. 

Deforestation takes place to turn forests into agricultural land for the production of commodities like palm oil and cattle, for mining, or to make way for new infrastructures like roads and dams. These land use changes are made under the false pretense that they will benefit local communities with jobs and drive economic growth.“Wealthy nations drive demand for tropical timber, and cash-strapped governments often grant logging concessions at a fraction of the land’s true volume,” National Geographic explains.

These are short-term economic gains to cutting down this irreplaceable and incredible natural resource, but it’s a false economy. World-leading rainforest conservation expert and EVP of Biodiversity and Conservation at XPRIZE, Peter Houlihan, believes that if we don’t act now to protect our rainforests, we will forever face the consequences. 

“So many aspects of deforestation and rainforest degradation around the world do not look at future, long-term benefits of preservation,” he explains. “There’s a misconception about rainforests being undervalued, and that’s not the case at all – their value is recognized but it is over-exploited for short-term gains in totally unsustainable ways. Humanity needs to be investing in the future of our planet for all life on earth, including our own species.” 

But what can we do about it? “What we need to get at is sustainable, long-term solutions that value keeping tropical forests standing,” presses Houlihan. “Humans have the intelligence and creativity to solve complex challenges and innovate. The true challenge is if the willingness to overcome greed and commit to our collective survival is great enough and swift enough to course correct in time. Never in the history of the evolution of the world has one species driven a mass extinction; without reversing course, we will surely seal our own fate of extinction.”

In 2020, the Amazon hit the highest rates on record, and it is predicted that, at the current rate of deforestation, we will reach the Amazon’s tipping point by 2030. Rainforests once covered 14% of the world’s landmass. Now they cover less than 6%. 

During years of researching on the ground in rainforests, Houlihan has seen how the building of roads and bridges, pitched as an infrastructure gain to local communities, are usually for the benefit of companies and governments – often foreign companies and governments – to mine, extract and poach valuable resources. “It is colonialism.” These injustices recall the colonialist practices that first stole the land from the local Indigenous people who were, and still are, guardians of the forests and have practiced the best traditional methods for sustainable use and are the most effective stewards of 80% of the planet’s biodiversity.

Houlihan has witnessed firsthand how quickly financial factors are being placed over future economic benefits, and critical research concurs. “The forest should unambiguously be saved when measured in a purely economic sense,” urges one key study on the economics of the Amazon from 2018. Conducted by economists and agricultural engineers, the research found that the economic benefit of the Amazon Rainforest, if it is conserved, would be $8.2 billion a year. 

The study took many factors and variables into account. It looked at the financial benefits of sustainable industries in the Amazon, like rubber tree farming and Brazil nut farming. It also found that tearing down the rainforest would have significant impacts on economies long term by decreasing rainfall and could cost a staggering $422 million in annual loss to agriculture.

Yet the costs of projected climate change don’t stop there. Despite being less than 10% of the world's landmass, rainforests are – unequivocally – at the heart of the battle against climate change. As carbon sinks, rainforests slow climate change by removing carbon from the atmosphere and storing it in their trees. Deforestation contributes to climate change, and climate change costs governments.

“This is becoming more evident every single year,” Houlihan tells us. “Right now, fires from California to the Tundra to the Amazon to the Pantanal are costing state and national governments billions of dollars. Droughts caused by climate change are making areas more fire-prone in dry seasons. Rainforest fires are occurring annually in Brazil and parts of the Congo Basin, while places like Borneo in Southeast Asia are engulfed in flames.” We can think of the increasing number and intensity of cyclones and Atlantic Hurricanes here, too, he says, as well as their ensuing costs to people’s livelihoods. 

A thoughtful and well-strategized global commitment to preserving rainforests wouldn’t only protect the plethora of life within them but the people hit hardest by these climate shifts – people in the Global South, in coastal areas, on islands, as well as people in farming and agriculture industries, who feel the disastrous effects of a changing climate first and worst.

Houlihan also cites the current global pandemic as yet another massive cost of deforestation. “The more rainforests are deforested and opened up in terms of access, and the more population growth expands in proximity to these environments, the more that future generations will be exposed to future pandemics.” 

Peter Daszak, president of EcoHealth Alliance, a US-based non-profit dedicated to analyzing and preventing pandemics, elaborates on this in the Guardian: “One-third of emerging diseases are the product of these rapid changes in land use, as people are pushed into contact with wildlife they would once have rarely encountered.”

Ultimately, says Houlihan, ecological tipping points beyond which ecosystems like rainforests will collapse have been predicted for decades; “it is a matter of global security and resilience that we save them.” Particularly as rainforests contain scientific insights that are being lost before they can even be revealed. 

The good news is that it’s not too late to change the course of history. We are at a fork in the road, and our actions today could change the future for the better for these ecosystems. 

This December, after a two-year delay due to the pandemic, the United Nations Biodiversity Conference of the Parties to the UN Convention on Biological Diversity (COP15) convened in Montreal. The negotiations culminated in an audacious Global Biodiversity Framework – a strategic foundation that outlines the pathway forward to more sustainable, equitable, and successful conservation of biodiversity. 

XPRIZE Rainforest looks to reward those who are working on improving conservation methods and our understanding of rainforest ecosystems by incentivizing their tremendous passion for protecting our planet’s tropical forests through innovative ideas. 

Specifically, XPRIZE Rainforest is challenging the world’s innovators to co-design and co-create new technologies to rapidly and autonomously catalog diverse forms of life within rainforests.  “Biodiversity investment frameworks, such as the Global Biodiversity Framework, require accurate and timely biodiversity assessments as a means to measure project success and satisfy the impact needs of donors and investors, “ shares XPRIZE Rainforest Technical Lead Kev Marriott. 

Marriott also stresses the need for the solutions developed in the competition for not just biodiversity but human rights as well: “The solutions that will be produced by the competing XPRIZE Rainforest teams will assist with the implementation and evaluation of these biodiversity investment frameworks by enabling rapid biodiversity assessments, providing baseline assessments and near real-time data on the positive impacts of conservation or restoration programs and the negative impacts of harmful/extractive activities and encroachment on protected or Indigenous-owned lands.”

We are watching our planet’s rainforests disappear right before our eyes, and acting now is imperative to protecting the rest of our rainforests and the communities of people living within them. But there is hope to be found in the goals set forth by the leaders at COP15 and the innovators, guardians, and conservationists of all backgrounds and skillsets who are persevering through the persistent challenges facing biodiversity to understand and protect tropical forests and their abundance of life before the clock runs out.