Making private investments work for tropical forests

March 13, 2013
Dominic Elson

etfernSeventythree contributed an article for issue 54 of European Tropical Forest Research Network Journal (ETFRN). This issue brings together 23 articles that analyse concrete examples of various private actors along the tropical forest-finance chain (small, medium and large forest entrepreneurs and intermediary and advisory organisations). The experience of these frontrunners presents a compelling case for revisiting business as usual. As policy-makers and private actors refine their strategy for seizing opportunities and managing the risks associated with emerging forest-related markets, these articles demonstrate that overall economic, social and environmental benefits can be reaped if investments are targeted correctly.

Dominic Elson wrote the article ‘Rethinking investment in locally controlled forestry’, where he describes the parallels between an ambitious locally controlled natural forest business in Papua (Indonesia), and the history of family forestry in Sweden. He draws on data gathered during a field trip to Sweden in 2012, along with his extensive experience of community forestry in Papua Province.

The abstract is below, and ETFRN Issue 54 can be downloaded from the ETFRN site.


Locally controlled enterprises are a good way to achieve sustainable economic and financial returns from forests.

The Forests Dialogue (TFD) has facilitated nine dialogues throughout the world, with more than 300 participants from many different backgrounds. These initiatives tackle the challenges facing locally controlled forestry and determine how more investors can be encouraged to take a serious interest in the sector. It is the first time that investors and forest rights-holders have come together to discuss these issues in such detail. The culmination of this work is a detailed guide for investment in sustainable local forest enterprises (Elson 2012a).

This article applies some of the key concepts presented in the guide to two case studies. These case studies illustrate the challenges to investing in locally controlled forestry and the potential solutions. The guide itself provides much more detail on design- ing investment models, the process of building a business and the ingredients for success.

The term forestry refers here to small- and medium-sized forest enterprises (sMFEs). Experience shows that building this enterprise sector is both the means by which locally controlled forestry will be possible, and the only way in which it can be financially, environmentally and socially sustainable.

Download the journal