How to ensure trees are our ally in the battle against climate change

From spruce and pine to beech, oak and birch, trees cover a third of Germany's land mass. 

A healthy picture, it seems, until you discover that 2 million hectares, or almost 20 per cent of the country's forests and woodlands, now suffer from heat, droughts, pests and wildfires, threatening their very existence.¹

In the central region, more than half of the forested areas is severely damaged, compared with just 9 per cent in 2017.²

Worryingly, Germany is not alone. Forests are degrading rapidly in many parts of the world, affecting their ability to store carbon and even turning some into a net source of emissions.

Normally, trees absorb carbon as they grow and release it when they die. But the demise of trees – whether it is through forest fires or decomposition – means they are releasing more planet-warming gas than they capture.

The problem has seen scientists, environmental activists, landowners and forestry practitioners come together to make calls to protect and restore forested regions.

But that’s where the agreement ends. These groups are divided – in some cases, fiercely – over how best to return forests to health.

“We are at a tipping point. Due to climate change and mismanagement, some forest biomes are starting to release more carbon into the atmosphere than they sequester,” says Christoph Butz, senior investment manager for thematic equities at Pictet Asset Management.

“This is leading to a big debate between ‘preserving forests’ and ‘working forests’.”

Many conservationists prefer a progressive concept of rewilding
– leaving forests alone and letting nature take its course.

Originally developed in the 1990s, this approach has gained popularity in recent years, but has also caused a controversy following the failure of some high-profile rewilding projects.

The alternative is to “work” the forests.

This involves actively and sustainably managing forests. The aims are twofold: to provide a steady and revenue-generating supply of wood while enhancing timberlands' ability to absorb carbon and offer up other ecosystem services, such as water filtration, soil regeneration, and flood defence.

"You have to do something"

Both strategies have merits and shortcomings, depending on a forest's location, its ecological characteristics, the animals and plants that inhabit it and whether its wood is used for commercial purposes. 

For example, protecting original forests as nature reserves, in equatorial areas or in boreal forest biomes helps protect and restore naturally-functioning ecosystems and increase their carbon storage capacity.

“Some primary forests should be protected forever and never be touched,” Butz says.

“It might even make sense to put some selected forests areas, which are managed today, under protection, for instance to build an ecological bridge between existing forest reserves or to preserve certain outstanding ecological qualities."

But it doesn’t mean a blanket rewilding of all the forests – which some rewilders advocate – makes the most environmental sense.

"To cease forestry on land which has been sustainably managed for centuries is counterproductive," Butz adds.

Applying laisser-faire techniques in the wrong place can destroy forests altogether. That is exactly what happened to the woodlands in the Harz Mountains in northern Germany.

After suffering severe deforestatiaon in the middle of the 20th century, the Harz became a protcted monculture forest of spruce, the only species available in sufficient quantities after the Second World War.

Over the years, however, climate change and droughts created the perfect conditions for bark beetles to thrive. As nature took its course, these sesame seed-sized beetles invaded the Harz forest and destroyed more than 10,000 hectares –or nearly 90 per cent – of spruce woods in just a few years, transforming the area to a moon-like landscape.

“Trees have three ways to react to changing conditions. They can migrate, adapt or get extinct. When you set aside a forest, we can put it on a long road to stable ecosystems but there’s a risk that it gets affected by insects or any kind of disturbances,” says Michael Köhl, professor of world forestry at the University of Hamburg.

“But do we really want to wait 200 years? You have to do something to restore forests. We need to avoid a repeat of the Harz Mountains,” adds Köhl, who is a member of Pictet AM's Thematic Advisory Board.

Trees as a carbon sink

In contrast to rewilding, sustainable forest management takes a pro-active approach in the safeguarding of forest ecosystems.

It often involves measures such as planting species better adapted to the local conditions, mixed-species plantation, pre-harvest thinning, and controlling competing vegetation support the health of forests and maintains the growth potential of the trees.

It can be beneficial on two fronts. First, it helps create a more effective carbon sink. Research has shown that a sustainably managed forest typically absorbs more carbon and makes greater contribution to climate mitigation (see chart).

Trees typically sequester more carbon when annual growth is at its greatest, normally at the age of 20-60 years.

“Young and middle-aged forest absorb the most carbon. In a managed forest, trees are younger on average as they’re cut before their natural senescence when they might become a source of carbon. So managed forests which are regenerated regularly bind more carbon,” Butz says.

“From this perspective, it really does not make sense to let the currently managed forests just grow, as some people advocate, because the net carbon benefit would definitely be smaller.”

Managed forestry also helps reduce the risk of forest fires – an increasingly major cause of tree loss in the world which is becoming more intense and widespread as recent events in California have shown.

An active carbon pump

A second benefit to managed forests is that they also produce sustainable raw materials that replace fossil or energy-intensive products, such as plastic, concrete and aluminium, providing an additional climate benefit that is called the substitution effect.

In a simulation study of the Hamburg metropolitan region, Köhl and other researchers have found that the “working forests” approach of opening the entire forest area to harvesting activities offset the highest amount of carbon between 2020 and 2100.

“Forest management can optimise carbon sequestration while at the same time providing timber for use in various harvested wood products,” Köhl says.

“Forests should not be seen exclusively as a passive sink but as an active pump.”

It is hard to overstate the importance of trees in the world's fight against climate change, especially as global temperatures are threatening to rise at least 2.5C on average above pre-industrial levels this century, far above the Paris Agreement goals.

Protecting forested areas, therefore, should be no binary choice between rewilding and sustainable forestry management. Both targeted conservation efforts and managed forestry are necessary for the net zero future.