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Tropical forests harbor a significant portion of global biodiversity and are a critical component of the climate system. Reducing deforestation and forest degradation contributes to global climate‐change mitigation efforts, yet emissions and removals from forest dynamics are still poorly quantified. We reviewed the main challenges to estimate changes in carbon stocks and biodiversity due to degradation and recovery of tropical forests, focusing on three main areas: (1) the combination of field surveys and remote sensing; (2) evaluation of biodiversity and carbon values under a unified strategy; and (3) research efforts needed to understand and quantify forest degradation and recovery. The improvement of models and estimates of changes of forest carbon can foster process‐oriented monitoring of forest dynamics, including different variables and using spatially explicit algorithms that account for regional and local …