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Tropical forests are at the heart of the climate system, serving simultaneously as critical regulators of carbon, biodiversity, and water regime. Understanding the full nature of this interdependence requires moving beyond broad statements to examine how exactly forests influence—and are influenced by—the global climate. This chapter examines the multiple functions tropical forests perform and outlines how reframing the forest–climate nexus can strengthen both climate action and forest management.

Carbon Dynamics: From Net Emitters to Net Sinks

Forests are vital to the planet’s carbon balance. Intact forests function as carbon sinks, absorbing CO₂ from the atmosphere through photosynthesis. In doing so, they help mitigate climate change by storing billions of tons of CO₂. Nevertheless, this balance can be easily disrupted. When forests are degraded or cleared, they release stored carbon back into the atmosphere, becoming net carbon sources. In fact, land-use change, particularly deforestation, significantly contributes to global GHG emissions (IPCC 2022).

This dual role of forests—as both sinks and sources—depends on human action. Land-use decisions, such as expanding agriculture or infrastructure into forested areas, lead to carbon loss. In contrast, conservation and restoration efforts can turn forests into a powerful climate solution by enhancing their capacity to store carbon.

Contrary to common belief, meeting global food demand does not require further deforestation. Research shows that the current agricultural footprint, if managed efficiently, is sufficient to sustain the global population (Souza and Assunção 2020). Statistics from the Food and Agriculture Organization of the United Nations (FAOSTAT) indicate that despite the observed increase in agricultural production, the global agricultural area has remained stable over the past two decades. This reinforces that forest loss is not required to meet growing demand, but a consequence of policy and market failures.

While climate change brings new threats that can weaken forest resilience, it also amplifies the urgency of forest restoration. This relationship underscores the importance of protecting existing forests and restoring degraded ones. Restored forests not only capture lost carbon but also improve biodiversity, water cycles, and local livelihoods. Among all nature-based climate solutions, forest protection and restoration remain the most scalable and cost-effective options for carbon removal (Assunção et al. 2025).

Whether forests ultimately amplify the climate crisis or help solve it, will be determined by choices made today.

Biodiversity: Tropical Forests as Global Hotspots

Tropical forests are home to more than 50% of all terrestrial species, making them the most biodiverse ecosystems on Earth (Pillay et al. 2021). This biodiversity is not only valuable in itself; it plays a critical functional role in maintaining forest resilience and supporting key ecosystem services, including carbon sequestration, water regulation, and soil fertility (Myers et al. 2000).

Many of these forests fall within biodiversity hotspots: 36 globally recognized regions where exceptional concentrations of endemic species are under severe threat from human activity. These hotspots cover just 2.5% of Earth’s land surface, yet they support more than 35% of the ecosystem services that vulnerable populations rely on for survival, such as clean water, food, and climate regulation (Conservation International nd). Because they represent both biological richness and human dependence, protecting these areas yields outsized benefits for both nature and people.

Biodiversity enhances ecosystem resilience, enabling forests to better withstand climate stress while continuing to deliver essential functions. Diverse species and genetic variation help ecosystems adapt to shocks and recover from disturbance. Conversely, biodiversity loss undermines these functions, weakening the capacity of forests to store carbon and regulate water cycles (Myers et al. 2000).

Beyond ecological benefits, biodiversity has profound cultural and economic value. Communities in and around tropical forests depend on a wide array of forest products—nuts, fruits, medicinal plants, rubber, and timber—for their livelihoods and traditions.

Importantly, biodiversity restoration and climate mitigation are mutually reinforcing goals. Well-designed natural regeneration using native species can recover up to 90% of original species richness, significantly outperforming monoculture plantations in ecological function and resilience (Rozendaal et al. 2019). Protecting existing and restoring degraded forests, especially in biodiversity hotspots, offers a high-impact pathway for achieving both climate and development goals.

Water and Climate Regulation: Forests as Climate Stabilizers

In addition to their role in carbon storage and biodiversity conservation, tropical forests are fundamental to sustaining the water cycle at multiple scales. Vegetation in these forests continuously recycles moisture through evapotranspiration—the process by which water is transferred from soil and plants into the atmosphere—influencing rainfall distribution both locally and across distant regions (Salati et al. 1979; Aragão 2012; Beveridge et al. 2024). This moisture recycling acts as a climatic bridge between ecosystems, meaning that environmental degradation in one area can disrupt rainfall and ecological balance in others.

Such interdependence renders tropical forests particularly vulnerable to cascading effects. For instance, when large areas of forest are lost in the eastern Amazon, the resulting reduction in atmospheric moisture can impair the resilience of downwind forests, increasing their likelihood of degradation (Lovejoy and Nobre 2018). Araujo (2023) estimates that forest degradation amplifies its reach, often doubling the area of impact through these moisture feedback loops. Alarmingly, some parts of the Amazon already show signs of becoming net carbon emitters rather than sinks, highlighting the destabilizing influence of these hydrological disruptions (Gatti et al. 2021). Flores et al. (2024) further warn that a large portion of the biome could soon reach a critical threshold of exposure to such risks.

The consequences are not confined to the forest alone. Declines in rainfall linked to deforestation have been shown to lower agricultural productivity in downwind areas (Leite-Filho et al. 2021; Spracklen, Arnold and Taylor 2012; Araujo 2023), while also undermining hydropower generation, which is heavily dependent on predictable water flows (Stickler et al. 2013; Araujo 2024; Araujo and Mourão 2023). These water-cycle disruptions carry wide-ranging economic and social implications, underscoring the need to protect forest integrity as a matter of regional climate and resource security.

Social and Development Benefits: Forests and Human Well‑being

Beyond their ecological and climate value, tropical forests are deeply intertwined with human well-being and development. Forests support the livelihoods of over 1.6 billion people worldwide, particularly in rural areas, by providing food, medicine, fuel, timber, fiber, and income-generating opportunities through both formal and informal markets (Grima et al. 2023). For many communities, especially Indigenous Peoples and traditional populations, forests are not just a source of material sustenance, but also the foundation of cultural identity, spiritual life, and social cohesion (UNEP 2021).

In their landmark study, Levis et al. (2017) analyzed data from thousands of forest plots across the Amazon and found that many of the region’s most abundant tree species—including Brazil nut, cacao, and certain palms—were historically cultivated and dispersed by Indigenous peoples. This research challenges the notion of the Amazon as a “pristine wilderness” and instead demonstrates that human management has been integral to the structure and diversity of the forest over millennia. This aligns with archaeological evidence that the Amazon once supported millions of people who actively managed species and landscapes, fundamentally contributing to the forests we observe today (Neves 2016).

Forest protection can deliver significant co-benefits for development. When well-managed, conservation and restoration efforts can strengthen local economies by supporting sustainable value chains, including non-timber forest products, community forestry, ecotourism, and forest-compatible agriculture (FAO et al. 2023). These approaches, when aligned with the rights and knowledge of local communities, offer more inclusive and resilient development pathways (Agrawal et al. 2009)

Evidence also shows that forests are critical to advancing climate justice and social equity. Indigenous and local communities often act as effective stewards of biodiversity and carbon stocks—managing at least 36% of intact forests globally—yet these areas remain among the most vulnerable to deforestation, land grabbing, and climate impacts (IPCC 2022). Recognizing land tenure rights, ensuring access to benefit-sharing mechanisms, and investing in community-led forest governance are therefore essential not only for conservation outcomes, but also for social and economic justice (FAO 2024).

As countries seek to align environmental priorities with poverty reduction and rural development goals, protecting forests can serve as a strategic tool—one that bridges global climate action with local well-being and long-term development.

Forests and Adaptation

Forests are central to the climate agenda not only for their role in mitigation—absorbing and storing carbon—but also for their capacity to support adaptation. This dual role can be understood as adaptation for forests, which refers to measures that help forests remain resilient under climate stress, and forests for adaptation, which highlights the services forests provide to strengthen the resilience of societies and economies.

Adaptation for forests refers to the strategies, practices and policies that help forest ecosystems—and the people who depend on them—adjust to the impacts of climate change while maintaining their ecological, economic, and social functions. They aim to address the growing vulnerabilities that forests face from droughts, pests, shifting species ranges, and wildfires. Strategies such as fire management, controlling invasive species, conserving genetic and species diversity, and creating more resilient plantations ensure that forests continue to thrive and provide essential ecosystem services in a changing climate (Keenan 2015).

Forests for adaptation emphasizes the critical role forests play in helping people, communities and economies adapt to the impacts of climate change by regulating water cycles, protecting soils, reducing the risks of floods and droughts, and providing food, fuel, and other products that serve as safety nets in times of crisis. These services are indispensable for sectors that are particularly climate-sensitive, such as agriculture, water management, and energy. A striking example is the Amazon’s “flying rivers,” the massive transport of moisture generated by forests that sustains rainfall regimes across South America. Deforestation disrupts this system, with consequences for agriculture, water security, and hydropower (Araujo 2024). Preserving forests thus becomes an adaptation measure in itself, ensuring stable water flows, reducing sedimentation, and safeguarding the reliability of hydropower generation.

Taken together, these perspectives form the basis of forest-based adaptation, an approach that brings together sustainable forest management, conservation, restoration, and afforestation to strengthen resilience. Beyond helping societies cope with climate impacts, forest-based adaptation also generates mitigation co-benefits and contributes directly to most of the Sustainable Development Goals (Libert-Amico et al. 2022).

The Forest‑Climate Nexus

Tropical forests and the global climate system are bound by a deeply reciprocal relationship. Forests influence climate by storing vast amounts of carbon, shaping rainfall patterns through evapotranspiration, and regulating surface temperatures. At the same time, they are increasingly vulnerable to the impacts of climate change, including higher temperatures, shifting rainfall regimes, prolonged droughts, and more frequent wildfires. This two-way dynamic means that forest loss accelerates climate change, while climate change erodes forest resilience. Understanding this forest-climate nexus is central to this report, which explores how tropical forests can contribute to climate mitigation and adaptation and inform effective policy and finance strategies.

Forests are among the most scalable and cost-effective climate solutions available today. They absorb roughly one-third of annual CO₂e emissions from human activity and are critical to achieving global climate targets. Protecting standing forests conserves immense carbon stocks, while large-scale restoration through natural regeneration and restoration can deliver immediate, low-cost carbon removals.

The climate agenda, in turn, can provide enabling conditions for stronger forest protection. Well-structured climate finance and policy mechanisms can channel significant resources to conservation and restoration, create long-term incentives for sustainable management, and reduce political and economic risks. By aligning forest and climate strategies, under the forest-climate nexus, countries can establish a reinforcing cycle in which climate action protects forests, and forests advance climate goals.

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