The Food and Agriculture Organization of the United Nations (FAO) has warned that the global economy could lose between $878 billion and $6.3 trillion annually if countries fail to restore degraded ecosystems. This represents between 2% and 8.3% of annual global GDP, depending on the scope of valuation. The warning is contained in the State of the World’s Forests (SOFO) 2026 report.
The report identifies forest and landscape restoration as a high-impact investment capable of addressing food security, biodiversity loss, climate change, and other development challenges. Restoring more than one billion hectares of degraded land could generate about $1.8 trillion annually in benefits through enhanced biodiversity, improved water regulation, and healthier soils.
According to the report, investing $2.6 trillion over 15 years in land degradation and drought mitigation could generate an eight-to-one social return. This underscores the economic cost of delaying restoration. Under favourable conditions, restoration could generate returns of up to $30 for every $1 invested.
FAO Director-General, QU Dongyu, emphasized that forest and landscape restoration is more than an environmental priority – it is a strategic investment in resilient agrifood systems and rural development. He warned that the window for action is narrowing and delayed or poorly designed restoration will increase long-term costs, exacerbate inequalities, and risk locking landscapes into unsustainable trajectories.
Forests currently cover 4.14 billion hectares, representing about 32% of the Earth’s land surface, and store an estimated 714 giga tons of carbon. They also provide habitat for up to 80% of the world’s terrestrial biodiversity. Forests play a major role in food and livelihoods, with nearly one-third of the global population depending on forests and trees for food security and income.
However, an estimated 489 million hectares of forest were lost between 1990 and 2025 through deforestation, while more than 460 million hectares of forests are degraded worldwide. Overall, about 1.56 billion hectares of land are degraded, driven by population growth, land-use change, and rising demand for natural resources.
The FAO report highlights that governments in 91 countries and areas have pledged more than 190 million hectares for forest restoration. Yet only 206.5 million hectares of forests are currently under restoration, indicating a significant gap between global commitments and implementation. Restoration could create jobs, revive production systems, and support more resilient economic growth, improving well-being and strengthening social cohesion.
Key points
- The global economy could lose $878 billion to $6.3 trillion annually if countries fail to restore degraded ecosystems.
- Restoring more than one billion hectares of degraded land could generate about $1.8 trillion annually in benefits.
- Investing $2.6 trillion over 15 years in land degradation and drought mitigation could generate an eight-to-one social return.
