Friends will be aware that I am a fan of "green" carbon sequestration, allowing nature to store some of the carbon we emit from our industrial and agricultural activities. The reasons are threefold. Firstly, my pragmatic assessment is that reaching Net Zero, both in the UK and globally, will require some carbon sequestration. Secondly, "green" routes are preferable to "grey" routes (i.e. hard infrastructure such as CCS – carbon capture and storage), given the co-benefits of natural sequestration in terms of bio-diversity and health, both physical and mental. Thirdly, the economic case for using nature to help us is robust. Taken together, necessity, quality of life, and attractive economic returns make for a strong investment case.   

So, as both reforestation (repairing and enlarging existing forests) and afforestation (growing new forests) may have a role to play in saving our planet, should we just grow lots of trees and be done with our climate concerns? Before we rush out with the spade and the seeds, there are various complexities to consider.

Firstly, any credible Net Zero equilibrium should ensure that the need for offsetting emissions (green or grey) is as small as economically possible in the first place. Before we consider reforestation or afforestation, we need to put a stop to the rampant deforestation of the planet. Cutting down fewer existing trees allows mature forests to maintain carbon stores built up over centuries, from the dawn of the Industrial Revolution. The starting place is to put away the saw.  

Secondly, even if we manage to halt deforestation and limit the need for sequestration by decarbonising large parts of the global economy, both reforestation and afforestation can only be part of the offsetting solution. My aide-memoire is that a well-organised global tree growth programme might eventually remove 50-100GtC (billions of tons of carbon) in total from the atmosphere, versus annual emissions of over 10GtC, so, for context, perhaps a decade’s worth of emissions. 

Forests can be our friends when it comes to creating a sustainable future, helping to control the climate, as well as providing shelter, shade, flood protection, habitats for wildlife, and beauty itself.

Thirdly, there are a set of other challenges that pervade reforestation and afforestation in practice. In general, reforestation has fewer risks than afforestation, as implanting new tree species into an environment needs care and may bring unanticipated consequences. Beyond that, critical issues include location (especially local climate) and existing soil conditions (within any forest ecosystem, a large proportion of the storage of carbon is actually in the soil rather than the trees’ leaves, branches, trunk and roots – a rule of thumb I use is a 70:30 split in a temperate zone such as the UK).  

In terms of location, it is intuitive that a tropical area like the Amazon rainforest could support large reforestation and afforestation with significant and rapid carbon capture potential. It is less intuitive that in a Nordic snow-bound context, planting additional trees without care might conceivably lead to increased global warming, not less.  

Snow-covered land reflects short-wave sunlight directly back to space, helping to cool the earth. Afforestation of areas with tall dark trees piercing or replacing the snow cover would darken the overall land surface, absorbing additional heat from the sun, rather than reflecting it. As this absorbed energy is emitted back to the atmosphere as infrared radiation, it actually contributes to the greenhouse effect and global warming, ceteris paribus.

In terms of local soil conditions, an example of the need for care in forest planning in the UK and Ireland relates to peatland, an excellent store of carbon. Draining this for tree-planting would simply imply a net release of carbon into the atmosphere.  

The overall message is that Net Zero must be seen in the context of the broader biosphere and our relationship with nature. Forests can be our friends when it comes to creating a sustainable future, helping to control the climate, as well as providing shelter, shade, flood protection, habitats for wildlife, and beauty itself. However, it is important not to abuse friendships. The earth would be both lonely and dangerous without nature as our friend.

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Disclaimer: The blog does not aim to give investment advice, but is designed to afford relevant longer-term context to investors, encouraging a broad perspective where uncertainty is high and a spirit of learning is important. The views expressed are those of the author, not those of Investec.