According to this paper, one cause of climate change is forest degradation. Worldwide 22 hectares of forest are degraded every minute. Innovative financing instruments and mechanisms to finance forest restoration and mitigating climate change are important. This paper a assesses the level and impact of forest degradation and forest restoration in India, translates carbon pollution level into mitigating CC, measures the willingness of consumers to compensate for climate change and discusses innovative financial instruments and mechanisms to finance sustainable forest restoration in India.