Mitigating systemic risks arising from tropical deforestation
How the Tropical Forest Forever Facility can help
Summary
Over the last year, the world has witnessed a series of extreme weather events suggesting that the natural systems that underpin our economies are beginning to fail. Protecting the climate-stabilizing effects of tropical forests must be an element of any strategy to build resilience to such events. Although not every region suffers the immediate and direct effects of tropical deforestation, all are affected by the global systemic risks that it poses to predictable weather patterns, food, water and energy security, public health and safety, and financial stability. Looking ahead, a “super El Niño” year promises to inflict further misery on those affected by the increases in heat waves, droughts, floods, and wildfires associated with such events and to exacerbate systemic risks. Closing the forest finance gap is key to mitigating those risks in the future, and the Tropical Forest Forever Facility could fill a key niche among the most promising solutions for doing so.
The importance of tropical forests to global goals related to climate, biodiversity, and land degradation
Tropical forests play an outsized role in regulating the Earth’s climate, harboring its biodiversity, and supporting the productivity of agricultural and other working lands. Halting and reversing tropical deforestation and land degradation is thus a challenge that cuts across the three Rio Conventions.
Climate. Tropical deforestation causes 11% of annual global greenhouse gas emissions, and conserving and restoring tropical forests offers one of the most cost-effective mitigation options (IPCC, 2019). Ending forest loss must be an important element of any strategy to address the significant systemic risks attributable to greenhouse warming alone. Accordingly, the first Global Stocktake of the UNFCCC emphasized the importance of halting and reversing deforestation and forest degradation by 2030 to meet the goals of the Paris Agreement (UNFCCC, 2023). In addition to their role in global climate mitigation, forests also affect local climate in ways that are important to adaptation by buffering the effects of greenhouse warming such as higher temperatures and extreme weather events (Seymour et al., 2022; Reek et al., 2026).
Biodiversity. The UNCBD’s Global Biodiversity Framework similarly sets 2030 as a target “to bring the loss of areas of high biodiversity importance, including ecosystems of high ecological integrity, close to zero” (CBD, 2022). Tropical forests harbor the preponderance of the Earth’s terrestrial biodiversity, including 62% of terrestrial vertebrate species (Pillay et al., 2021), while requiring less than 10% of global biodiversity finance (Deutz et al., 2020). A recent national security assessment by the U.K. government (2026) describes how the risks of biodiversity loss and ecosystem collapse, including the Amazon and Congo Basin rainforests specifically, threaten global food security.
Desertification and land degradation. Tropical forests are also critical to achieving objectives articulated in the UNCCD 2018–2030 Strategic Framework, including “to combat desertification/land degradation…” and “to mitigate…the effects of drought…” (UNCCD, 2017). As elaborated below, tropical forests influence how moisture travels through the atmosphere and falls as precipitation, and how deforestation can disrupt rainfall patterns in ways that increase the risk of drought.
The importance of tropical forests to climate stability across scales
The importance of tropical forests to global goals is well recognized in global agreements. Less well known, and not yet incorporated into local, national, and international policies, are the complex ways through which tropical forests contribute to climate stability in ways other than through the global carbon cycle.
Deforestation and degradation of tropical forests risk triggering catastrophic climate shifts. Tropical forests are among a set of Earth system components (also including ocean currents and permafrost, for example) that can amplify climate risks through non-linear, irreversible shifts in their functions (Hansen et al., 2026). Potential disruptions include the risks of crossing regional “tipping points” with global consequences, such as the Amazon rainforest converting to a degraded ecosystem with significantly less biodiversity and carbon storage beyond an uncertain threshold of deforestation (Lovejoy and Nobre, 2018), recently estimated to be between 22–28 percent (Wunderling et al., 2026). Short of a single, basin-wide tipping point, more local thresholds are being crossed that reduce resilience and increase the risk of transition to a persistent state of degradation (Brando et al, 2025). Risks include initiating self-perpetuating “cascading impacts” on biophysical or socioeconomic systems, such as when repeated fires reduce the capacity of forests to sequester carbon, or when simultaneous droughts in multiple agricultural breadbaskets affect the global food system (Hansen et al, 2025).
Tropical forests stabilize weather patterns across scales by affecting temperature and rainfall. By evaporating rainfall and transpiring water from below ground, they provide a natural air-conditioning function, with significant cooling effects on local temperature averages and extremes. The rough surface of the forest canopy creates turbulence in wind patterns that lift heat and moisture up and away. These plumes of moisture affect rainfall at continental scales, up to hundreds of kilometers downwind. The moisture also interacts with particulates and atmospheric chemistry to form clouds, which in addition to generating rainfall, reflect sunlight back out into space with a global cooling effect (Lawrence et al., 2022).
Tropical deforestation on average leads to warmer, drier, and less stable conditions (Lawrence and Vandecar, 2015). These effects are in addition to the effects of global greenhouse warming, often compounding the warmer, drier, and less stable conditions attributable to greenhouse warming alone. For example, deforestation in the southern Amazon has been linked to increasing length of the dry season (Leite-Filho et al., 2019). Eastern Amazonia, which has experienced more deforestation compared to western Amazonia, has greater fire risk and carbon emissions, and is now largely a net source of emissions rather than a sink (Gatti et al., 2021).
Deforestation can affect rainfall patterns regionally. For example, rainforest loss in West and Central Africa could affect desertification in the Sahel. According to one study, winds “originating either from the Atlantic and moving north-eastward over and through the forest and vegetation covered regions from the coast on up, as well as those moving into the Sahel from the East, are likely to provide the largest contributions of atmospheric moisture to rainfall in the Sahel” (Ellison & Speranza, 2020).
Deforestation can disrupt rainfall patterns globally. By affecting the Earth’s energy balance, large-scale deforestation or afforestation/reforestation can cause shifts in atmospheric and ocean circulation patterns. These shifts can in turn affect precipitation patterns globally, potentially affecting water security in regions remote from where the land-cover change takes place (Portmann et al., 2022). The El Niño phenomenon discussed further below is an example of the complex interactions among land cover, oceans, and the atmosphere.
