Rising atmospheric aridity weakens global forest cooling benefits: Implications for climate policy and ESG investment

Introduction

Forests are often regarded as "natural solutions" to climate change, regulating local climate through transpiration cooling and shading effects. However, a recent study published in *Nature Climate Change* (Zhang et al., 2026) reveals that the continuous increase in atmospheric dryness is systematically changing the biophysical cooling capacity of forests, with opposite trends across different latitudinal zones. This finding poses new challenges for global climate policies, investment logic for nature-based solutions (NbS), and natural risk management under the ESG framework.

Core Finding: VPD as the Dominant Factor

Using satellite observation data from 2001 to 2023, the researchers quantified the land surface temperature difference between global growing-season forests and adjacent bare land (ΔLSTgs). The results show a significant contrast in the temporal trend of ΔLSTgs globally: the cooling capacity of low-latitude (tropical) forests continues to weaken, while that of high-latitude (boreal and some temperate) forests actually increases.

Through attribution analysis, vapor pressure deficit (VPD)—a key measure of atmospheric dryness—was identified as the primary climatic factor driving this divergent trend, with greater influence than temperature, precipitation, radiation, and other common variables. An increase in VPD means greater atmospheric demand for water, exacerbating plant water stress and thereby affecting transpiration cooling.

Key Regulatory Role of Plant Physiological Strategies

The study further reveals the regulatory effect of forest traits: plant isohydry—the degree to which plants maintain leaf water potential through stomatal regulation—is the most important forest trait that negatively regulates the response intensity of ΔLSTgs to VPD. Low-latitude forests are dominated by isohydric species, which tend to close stomata early under water stress to maintain leaf water potential, quickly weakening transpiration cooling, leading to a decline in cooling benefits as VPD rises. In contrast, high-latitude forests are dominated by anisohydric species, which allow leaf water potential to drop more significantly, keeping stomata open longer, thereby enhancing transpiration cooling when VPD rises moderately.

The key threshold lies in the hydraulic safety margin: low-latitude VPD has already exceeded the local forest's hydraulic safety margin, forcing trees into an "emergency mode"; while high-latitude VPD remains below that safety margin, so the anisohydric strategy can maintain or even enhance cooling function.

Implications for Global Development and Environmental Policy

1. Tropical Forest Cooling "Ceiling"

Low-latitude regions are home to the world's largest tropical rainforests and many developing countries. These forests are central to local climate regulation and global carbon sinks. The weakening of cooling benefits due to rising VPD means that even if forest area remains unchanged or increases, their buffering capacity against extreme heat is declining. This has cascading effects on agriculture, health, and water resources that depend on forest ecosystems. For example, the Amazon and Congo Basins may face higher heat stress risks, thereby affecting food security and public health.### 2. Nature-Based Solutions Need Recalibration

Many countries regard afforestation as a core component of their NDCs (Nationally Determined Contributions) and issue carbon credits based on forests' carbon sequestration and cooling benefits. This study suggests that when assessing the net climate benefits of afforestation projects, it is necessary to consider regional differences and long-term evolution of biophysical effects. Tropical afforestation projects that ignore VPD trends may overestimate their cooling contribution, leading to a "quality" discount on carbon credits. ESG investment institutions should incorporate local VPD trends and hydraulic safety margins into stress tests when evaluating nature-related assets.

3. Climate Finance Should Focus on Adaptation Interventions

In the global climate finance system, forest-related funds mainly flow to REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and carbon sink projects. This study shows that merely protecting or restoring forests is insufficient to ensure cooling functions, as increasing atmospheric dryness may offset part of the benefits. Future financing needs to be complemented by adaptation measures, such as selecting more drought-resistant tree species (optimizing isohydric characteristics), improving landscape hydrology to reduce local VPD, or investing in early warning systems to cope with heatwaves.

4. Unexpected Benefits in High-Latitude Regions

High-latitude forests (e.g., in Siberia, Canada, and Northern Europe) experienced stronger cooling effects with moderate increases in VPD, which may partially slow the Arctic amplification effect. However, this benefit has an upper limit: once VPD continues to rise beyond their hydraulic safety margin, the benefits will reverse. Therefore, in the long term, the overall cooling trend of global forests remains concerning.

ESG Perspective: A New Dimension of Natural Capital Risk

For ESG investors, this study reveals a pathway for "climate physical risks" to translate into "natural capital performance risks." In ESG ratings, the "natural capital performance" of forest assets has traditionally been measured by indicators such as carbon storage, area, and biodiversity. This study suggests adding "ecological hydraulic safety margin" and "VPD response sensitivity" indicators. For example, projects investing in Brazil's Atlantic Forest or Southeast Asia's peat swamp forests may require stricter hydrological management to maintain their climate regulation functions.

Additionally, corporate disclosures should include the exposure of supply chains that rely on forest ecosystem services (e.g., agricultural products, timber, tourism) to changes in VPD. As atmospheric dryness increases, tropical production areas may experience more frequent crop failures and labor heat stress, thereby affecting the operational continuity of multinational corporations.

Direction for Global Governance and CooperationThis finding reinforces the necessity of dynamically integrating forestry policies with climate science. International organizations such as the United Nations Framework Convention on Climate Change (UNFCCC) and the United Nations Convention to Combat Desertification (UNCCD) could consider incorporating forest biophysical cooling indicators into national reporting systems. The World Bank and the Green Climate Fund, when funding afforestation projects, should require VPD scenario analyses. When formulating forest restoration plans, countries in the Global South should prioritize native tree species with strong adaptability to equal water demand, and consider using mixed forests or increasing water bodies to reduce microclimate aridity.

Conclusion

The rise in atmospheric dryness does not uniformly affect the cooling benefits of global forests. The cooling capacity of low-latitude forests is facing systematic weakening, while the temporary enhancement in high-latitude forests masks long-term risks. This finding calls on climate policymakers and investors to move beyond the simple narrative of "forests as coolants" and toward science-based management of hydraulic safety thresholds. In the context of global climate change, the effectiveness boundary conditions of forests as nature-based climate solutions are being redefined. Only by integrating biophysical processes, plant physiological traits, and regional climate trends into comprehensive decision-making can we ensure that forest-based climate investments truly serve the long-term goals of sustainable development.

References

Zhang, C., Su, Y., Liao, Z. et al. Globally constrained forest biophysical cooling benefits under rising atmospheric dryness. *Nature Climate Change* (2026). https://doi.org/10.1038/s41558-026-02677-y