Forests store massive amounts of carbon — roughly 50% more than is found in the atmosphere.
Deforestation and the Global Carbon Cycle 
Deforestation increases the amount of carbon dioxide (CO2) and other trace gases in the atmosphere. The plants and soil of tropical forests hold 460-575 billion metric tons of carbon worldwide with each acre of tropical forest storing about 180 metric tons of carbon. When a forest is cut and burned to establish cropland and pastures, the carbon that was stored in the tree trunks (wood is about 50% carbon) joins with oxygen and is released into the atmosphere as CO2.
The loss of forests has a profound effect on the global carbon cycle. From 1850 to 1990, deforestation worldwide (including the United States) released 122 billion metric tons of carbon into the atmosphere, with the current rate being approximately 1.6 billion metric tons per year. In comparison, fossil fuel burning (coal, oil, and gas) releases about 6 billion metric tons per year, so it is clear that deforestation makes a significant contribution to the increasing CO2 in the atmosphere. Releasing CO2 into the atmosphere enhances the greenhouse effect, and could contribute to an increase in global temperatures. Source
South America suffered the largest net loss of forests between 2000 and 2005 at around 4.3 million hectares per year, followed by Africa, which lost four million hectares annually.
The world currently loses approximately 32 million acres of forest cover a year. Africa, Latin America and the Caribbean are currently the regions with the highest losses.
Researchers from the FAO, which releases an annual survey of the world’s forests, have found that enormous forest tracts are still disappearing from the developing world. In fact, a global report from the United Nations has revealed that progress in forest management in the industrial world is rapidly being overwhelmed by accelerating deforestation in the developing world.
The report’s authors found that improved legislation and conservation practices within the industrial world had led to the net loss of forests decreasing over the last decade from 22 million acres to 17 million acres.
Europe has the record when it comes to preserving its forests with some countries even showing an increase in their forest cover. In the United States and Canada forest cover is considered to be stable.
In contrast, forests in the developing world still suffer from widespread deforestation primarily caused by unregulated slash and burn farming practices and uncontrolled forest fires. Source
Deforestation of developing countries is a threat to life worldwide
Deforestation may have profound effects on global climate and cause the extinction of thousands of species annually. The majority of pharmaceutical drugs produced in the world today are derived from natural sources many of which are found only in forests. This is why stopping deforestation in the tropics has become an international movement.
The causes of deforestation are complex
A competitive global economy drives the need for money in economically challenged tropical countries. At the national level, governments sell logging concessions to raise money for projects, to pay international debt, or to develop industry.The logging companies seek to harvest the forest and make profit from the sales of pulp and valuable hardwoods.
Deforestation by a peasant farmer is often done to raise crops for self-subsistence, and is driven by the basic human need for food. In a tropical rain forest, nearly all of the life-sustaining nutrients are found in the plants and trees, not in the ground as in a northern, or temperate forest. When the plants and trees are cut down to sow the land, farmers usually burn the tree trunks to release the nutrients necessary for a fertile soil. When the rains come, they wash away most of the nutrients, leaving the soil much less fertile. In as little as 3 years, the ground is no longer capable of supporting crops.
When the fertility of the ground decreases, farmers seek other areas to clear and plant, abandoning the nutrient-deficient soil. The area previously farmed is left to grow back to a rain forest. However, just as the crops did not grow well because of low nutrients, the forest will grow back just as slow because of poor nutrients. After the land is abandoned, the forest may take up to 50 years to grow back.
There are other reasons for deforestation, such as to construct towns or dams which flood large areas. Yet, these latter cases constitute only a very small part of the total deforestation.
Because the loss of forests is driven by a complex group of factors, the solutions are equally complex. Simple solutions that do not address the nature of world economics and forest ecology have little chance of succeeding. The future requires solutions based on solving the economic crises of countries holding forests, as well as improvement of the living conditions of the poor people often responsible for deforestation.
State of the World?s Forests 2007
This seventh edition of State of the World?s Forests examines progress towards sustainable forest management. Part I reviews progress region by region. Each regional report is structured according to the seven thematic elements of sustainable forest management agreed by international fora as a framework for sustainable forest management: extent of forest resources; biological diversity; forest health and vitality; productive functions of forest resources; protective functions of forest resources; socio-economic functions; and legal, policy and institutional framework. These summaries are based on the most current information available, including new data, more comprehensive than ever, from the Global Forest Resources Assessment 2005 (FRA 2005).
Part II presents selected issues in the forest sector, probing the state of knowledge or recent activities in 18 topics of interest to forestry. Climate change, forest landscape restoration, forest tenure, invasive species, wildlife management and wood energy are just a sampling of the subjects covered.
State of the World?s Forests 2007 can be found at this link. 