Plant diverse tree species to spread risk in climate crisis, study says
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Uncertainty over climate and economy means ‘investment portfolio’ approach needed, researchers say

  
Mon 3 Mar 2025 15.00 EST  
Last modified on Tue 4 Mar 2025 05.29 EST

An “investment portfolio approach” needs to be applied to large-scale tree planting across the world to reduce the risks of the wrong species being planted in the wrong place, economists have said.

Countries have made ambitious pledges to plant billions of trees to remove greenhouse gases and tackle global heating. The UK has committed to plant 30,000 hectares (74,000 acres) of trees each year by 2025 and maintain the rate until 2050, the European Commission has pledged to plant 3bn trees across member states by 2030, and the US under the previous administration committed to planting 1bn trees by the same date.

But the types of trees that are needed, and where to plant them, are decisions that have to be made now, though future conditions remain uncertain.

The study suggests the risks of future tree planting and the economic risk of its failure could be mitigated by adopting the approach of financial investors, who spread risk across a portfolio of companies by choosing assets like stocks, bonds, and commodities to strike an efficient balance.

Environmental economists at Exeter University say there are significant risks of converting farmland to forests in a future of climate change and economic uncertainty, such as large-scale tree planting displacing agriculture and affecting food security, depending on where it takes place.

But an “investment portfolio approach” to tree planting, which combines climate risk with economic risk, is the best, most cost-effective way of removing carbon if careful choices are made about which trees to plant where, the researchers said.

Frankie Cho, a PhD graduate from the University of Exeter and the lead author of the study, said: “One problem is that, because it is unclear what countries round the world will do to tackle climate change, we don’t know how challenging the climate will be in the future.

“If climate change is extreme, broadleaf trees in the southern UK offer the best carbon removal – but that’s prime farmland and could be really costly under certain economic futures.

“If climate change is milder, planting conifers on less productive land makes more sense, but those trees will not grow well if conditions are more extreme. The problem is that we don’t know what the future holds and can’t be certain which type of trees we need to plant and where.”

Diversifying species and locations for tree planting would minimise the danger of betting on the wrong future, ensuring tree-planting decisions remain resilient in the face of uncertain future climatic and economic conditions, the study,  in Proceedings of the National Academy of Sciences, says.

Cho said previous studies have examined the risks posed by either climate or economic variables in isolation, but the risks were inherently interdependent and correlated. The new study took the UK as a model and examined economic risks and climate uncertainties to create a planting portfolio which took both uncertainties into consideration.



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In the study, the researchers wrote: “Trees of one species are planted in a given location because they tend to give good returns under future conditions in which trees planted in another location give poor returns, and vice versa.

“The planting strategy is a portfolio in the sense that it includes planting of both these varieties and thereby limits exposure to downside risk, the possibility of returns falling below a certain threshold.”

Brett Day, a professor of environmental economics at the University of Exeter and also an author of the study, said: “We don’t have any other option that can remove carbon from the atmosphere at the scale and cost that we need to meet our net zero targets. While tree-planting carries risks, our study shows that, if done strategically, it remains the best solution we have.”

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