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By Iain Henderson, UNEP Finance Initiative
A long, long time ago, in an age when the REDD+ acronyms that both comfort and confuse were but a twinkle in negotiators’ eyes, the world was a very different place. This was the ‘pre-smartphone period’. This was a world without Twitter, or Facebook, and it was one where ‘text neck’ had yet to enter the medical lexicon.
It was in this bygone era in the late 1990s that I started my first job. Twice a day, I joined an anonymous tide of millions traversing London on the Underground, or ‘Tube’, as it is known.
Casual observers of the British will notice that when cast into an intimate space with strangers – such as on the Tube at rush hour – the stereotypical Brit will often ignore those around him or her, and stoically stare upwards in silence.
Capitalising on this trait, and without the distraction of smartphones, head high adverts lined the inside of the Tube carriages, as they still do. One advert that remains seared in my memory 15 years later was for a company that prided itself on its innovation and lateral thinking.
The advert began that at the peak of the 1960s space race with the Soviet Union, America spent millions of dollars developing a ballpoint pen that astronauts could use in orbit. The demands of space travel required that the pen should work in near zero gravity conditions, upside down and at extreme temperatures. After years of toil, the Americans succeeded in creating just such a pen having crushed each and every obstacle in their path thanks to the most brilliant minds of their generation and a multi-million dollar R&D budget. On the other side of the Atlantic, the Soviet Union simultaneously solved the conundrum of writing in space. Their cosmonauts would carry pencils.
Ignoring the inconvenient truth that the legend behind this advert is an urban myth, it has some interesting lessons for REDD+. The column inches devoted to the design and function of financial mechanisms like the Green Climate Fund seemingly increase with every passing month. These mechanisms will channel new and additional funds – about which there is justified and historical concern – required to plug the various ‘financing gaps’ we are all aware of in development circles. The international community is essentially working furiously on the design of a development ballpoint pen that at times feels like it needs to be all things to all people.
But aren’t we overlooking something? Is it possible that we aren’t spending enough time looking at the ‘pencils’?
A new report commissioned by UNEP analyses the nature and scale of agricultural commodity subsidies and examines how they can shape the prevailing investment climate, which in turn might positively or negatively influence forest loss. These subsidies are the instruments that already affect capital flows in landscapes by influencing behaviour through price, legality or information. Arguably, given that these incentives already exist, they can be thought of as ‘pencils’ in the context of REDD+.
Several key points stand out from the report on a topic I have little doubt will be one of growing interest for the REDD+ community. The most significant message for me, however, is one of opportunity.
The authors highlight the vast gulf between REDD+ finance and agricultural subsidies provided through a range of government tools in the two countries profiled – Brazil and Indonesia. Annual domestic agricultural subsidies for commodities often associated with historical deforestation exceed REDD+ finance by factors of 70 and 164 times, respectively.
Despite these vast multiples, it would appear that this is not an area many countries have been able to look at in the development of their REDD+ plans to date. Based on the assumption that these huge flows will probably have a far greater impact on private sector behaviour in a landscape than REDD+ funds used in isolation, it is suggested that REDD+ funds could be used to help identify and potentially reform existing subsidies that are working against development objectives, creating a significant multiplier effect.
This is a clear opportunity to try and generate a ‘double dividend’ by redirecting resources that currently might have unintended negative consequences with regards to REDD+ objectives. This opportunity exists as some subsidies will, to paraphrase UNEP Goodwill Ambassador Pavan Sukhdev, have been designed to deal with yesterday’s priorities, which might not be entirely aligned with today’s objectives or tomorrow’s problems.
As with many development challenges, however, reforming subsidies is arguably easier in the rarefied world of economic theory and perfect markets than in life as the report points out. Subsidies are hard to identify and even harder to estimate. The research team only managed to quantify around half of the relevant subsidies they found. Subsides are also rarely commodity-specific and manifest themselves in many different ways under many different names (e.g., aid, incentives, support, aid, fiscal instruments, etc.) which adds another layer of complexity to the challenge.
However, if these hurdles can be overcome, the report alludes to well-designed subsidies being an important tool in the policy-maker toolbox. This has already started to happen, and the report provides encouraging examples of subsidy reforms that support REDD+ in both countries profiled. The next step for UNEP and the UN-REDD Programme will be to take the analysis to a deeper level and explore in finer detail how subsidies could be reformed for (almost) everyone’s benefits and for significant forest and climate gains. Indonesia has volunteered to go this next step and during the Tropical Landscape Summit called for by the Indonesia Investment Coordinating Board on 27/28 April, the Government will start its scrutiny of counter-productive land-use subsidies. The topic will also be on the agenda at the Global Landscape Forum event on investment in London on June 10/11.
The key message I gleaned from reading this stimulating report is that while it is vital to continue to focus on the important race to develop the ballpoint pen in REDD+, let’s not forget the pencils.
The ‘Subsidies to key commodities driving forest loss’ report can be downloaded here.
Bio: Iain Henderson joined the UNEP Finance Initiative (UNEP FI) in Geneva in 2012 and leads their work on REDD+ and Sustainable Land Use. He was previously an investment banker for over a decade in London and more recently worked for WWF on sustainable finance in Hong Kong. He is part of the UNEP team working on private sector engagement under the UN-REDD Programme and is a member of the World Economic Forum’s Global Agenda Council on Forests.
This article was originally posted on Landscapes.org. Click here to read it.
(Ver el texto en español más abajo)
By Patricia Toquica, UN-REDD Programme Knowledge Management Specialist for Latin America and the Caribbean, with contributions from Leandro Fernandez, Argentina’s Government REDD+ Focal Point, and Marco Chiu, UN-REDD Programme Regional Technical Advisor.
A significant step forward in the preparation phase to reduce emissions from deforestation and forest degradation (REDD+) can be expected in Argentina thanks to successful coordination between the country’s government, the UN-REDD Programme and the Forest Carbon Partnership Facility (FCPF).
In many countries, one government team is often in charge of coordinating work related to the United Nations Framework Convention on Climate Change, the UN-REDD Programme and the FCPF. Yet for partner countries, this poses challenges in terms of coordinating processes, project documents and requirements from each of the Programmes, sometimes resulting in duplication of efforts.
In several REDD+ forums in Latin America and the Caribbean (LAC), countries have spoken of the need for effective coordination to optimize financial and human resources, streamline processes and enable further progress towards common goals of the REDD+ readiness phase.
An example of effective coordination in this regard was recently initiated in Argentina. Following meetings among the government and representatives of the UN-REDD Programme and FCPF, it was agreed that a common work plan would be developed, a single project unit created and that the main elements would be identified for a conceptual framework around Strategic Environmental and Social Assessment (SESA) and Stakeholder Engagement in the context of REDD+. This framework was developed on the basis of a common approach for the development of the country’s future REDD+ National Strategy.
These agreements in Argentina have been helpful in clarifying other topics and led to content edits of the country’s R-PP (Readiness Preparation Proposal). Beyond Argentina, this coordination will be also beneficial for countries such as Paraguay and Honduras, as well as other Latin American and Caribbean countries that are mobilizing resources for REDD+ programmes in the readiness or implementation phases. Like Argentina, these countries must reduce transaction costs and define, to the greatest extent possible, common conceptual and methodological approaches to support programmes with similar objectives. Argentina’s experience
After joining the UN-REDD Programme in 2010, Argentina was invited to apply for funding through the National Programme modality in June 2013. The country is currently in final negotiations to sign the project document that will give way to the implementation of REDD+ activities. With the FCPF, the Argentine government is also in the last administrative steps for signing the grant agreement. It is expected that implementation of the two programs will start in 2015 and be developed in coordination among the government, the UN-REDD Programme and FCPF.
In 2014, during the design phase of the activities that the UN-REDD Programme and FCPF will support in Argentina, several factors contributed to a favorable collaboration among stakeholders. These included political will, openness for discussions on technical issues, and a willingness to find solutions to the challenges encountered. Two editions of UN-REDD Programme targeted support have also strengthened capacities to create an environmental and social Safeguards Information System and allowed for a platform to be set up to disseminate information for the National Forest Monitoring System.
In June 2014, the UN-REDD Programme Policy Board accepted Argentina’s proposal and allocated approximately US$ 3.8 million for its National Programme. From then on, both the UN-REDD Programme and the FCPF expressed their intention to coordinate actions. A preliminary agreement was subsequently reached to share information and work plans in order to avoid the duplication of efforts.
In October 2014, a joint mission and trilateral meeting took place with government focal points and representatives from the UN-REDD Programme and the FCPF to work on stakeholder engagement – achieving substantial progress. A common conceptual framework for the SESA and complementary activities was defined, while the stakeholder engagement processes was agreed on by the government and UN-REDD Programme. This framework builds on a specific proposal for the creation of a REDD+ National Strategy. SESA will be developed gradually in way that allows for inputs to be taken into account while the strategy progresses. Work on stakeholder engagement cannot be disconnected from the SESA process, it was furthermore agreed, with critical moments and actions defined for avoiding this.
A further key agreement reached in Argentina will see a single project operating unit work with both the UN-REDD Programme and the FCPF. The unit already has a draft organigram, while roles and functions have been identified to serve the initial objectives.
Finally, the general elements for a joint UN-REDD Programme-FCPF workplan on SESA and stakeholder engagement was drawn up.This is an unprecedented milestone for the REDD+ programme in the region and will not only allow for more efficient organization but will also facilitate progress in how resources for REDD+ are managed in the country.
Exitosa coordinación en Argentina en preparación para REDD+
Un avance significativo se anticipa la fase de preparación para reducir las emisiones por deforestación y degradación de bosques (REDD+) en Argentina tras la coordinación establecida entre el gobierno y los programas ONU-REDD y FCPF.
En muchos países el mismo equipo y recursos humanos de las entidades de Estado, usualmente se encargan de los temas relacionados con la Convención Marco de Naciones Unidas sobre Cambio Climático, el programa ONU-REDD y el Fondo Cooperativo para el Carbono de los Bosques del Banco Mundial (FCPF por sus siglas en inglés).
Desde la perspectiva de los países socios, esto supone retos en la coordinación de procesos, documentos de proyecto y requerimientos de cada uno de los programas, causando en ocasiones duplicación de esfuerzos y requisitos. En varios foros sobre REDD+ los países en Latinoamérica y El Caribe han mencionado la necesidad de lograr una efectiva coordinación para optimizar recursos financieros y humanos, agilizar procesos y permitir un mayor avance en objetivos comunes durante el desarrollo de la fase de preparación para REDD+.
Un ejemplo de una efectiva coordinación fue iniciada recientemente en Argentina, donde tras reuniones tripartitas entre el gobierno y representantes de los programas ONU-REDD y FCPF se acordó desarrollar un plan de trabajo general, crear una unidad de proyecto común, así como establecer los elementos generales de un marco conceptual conjunto en torno a los temas de Evaluación Estratégica Social y Ambiental e Involucramiento de Actores (más conocidos como SESA y SE por sus siglas en inglés) en el marco de REDD+. Dicho marco conceptual fue elaborado teniendo como base un enfoque común para el desarrollo de la futura Estrategia Nacional REDD+ del país.
Estos acuerdos en Argentina han permitido clarificar otros temas, que han sido extendidos a ediciones en el contenido del R-PP (Readiness Preparation Proposal por sus siglas en inglés) del país.
Este logro será muy beneficioso no sólo para Argentina, sino también para países como Paraguay y Honduras por ejemplo, así como otros en la región de Latinoamérica y El Caribe que están gestionando su involucramiento formal para movilizar recursos bajo los programas de preparación para REDD+ o que están ya en fase de implementación de las actividades de preparación. Al igual que Argentina, estos países tienen la necesidad de reducir los costos de transacción y definir, tanto como sea posible, enfoques conceptuales y metodológicos comunes con los programas de apoyo de objetivos similares.
La experiencia de Argentina
Argentina es miembro del Programa ONU-REDD desde el 2010 y en junio de 2013 fue invitado para postular a financiamiento mediante la modalidad de Programas Nacionales. Actualmente se encuentra en las gestiones finales para la firma del documento de proyecto que dará paso a la implementación de las actividades de preparación para REDD+. Con el FCPF, el Gobierno argentino aún se encuentra también en los últimos pasos administrativos para la firma del acuerdo de donación. Se espera que la implementación de los dos programas inicie en 2015 y se desarrolle de manera coordinada entre el Gobierno, el Programa ONU-REDD y el FCPF.
Durante la fase de diseño de las actividades que el Programa ONU-REDD y el FCPF apoyarán en Argentina, en 2014 se evidenció un entorno de colaboración favorable entre las partes involucradas, incluyendo factores como voluntad política; apertura para discusión de aspectos técnicos; y una buena disposición de las partes para encontrar soluciones a los desafíos encontrados. Asimismo, dos apoyos dirigidos (Targeted Support) del Programa ONU-REDD han fortalecido las capacidades en torno a la creación de un sistema de información de salvaguardas ambientales y sociales y permitido la construcción de una plataforma de difusión de la información del Sistema Nacional de Monitoreo de Bosques, integrando información social, registro de planes y proyectos en el terreno y otros datos asociados a la información forestal.
Es en junio de 2014 que la Junta Normativa del Programa ONU-REDD acepta la propuesta de Argentina y asigna aproximadamente US$ 3.8 millones para su Programa Nacional. Desde entonces se hace manifiesta, junto con el FCPF, la intención de coordinar acciones y se establece un preacuerdo de compartir información y planes de trabajo con el fin de evitar la duplicación de esfuerzos.
En octubre de 2014 se lleva a cabo una misión conjunta y reunión trilateral entre los puntos focales del Gobierno de Argentina a cargo del tema, y representantes del Programa ONU-REDD y el FCPF en torno al trabajo de involucramiento de actores. En la misma, se logró un substancial avance al definir un marco conceptual común para la Evaluación Estratégica Social y Ambiental (SESA por sus siglas en inglés) y actividades complementarias tanto de este proceso como en el de involucramiento de actores que el Gobierno argentino había acordado con el Programa ONU-REDD. Este marco, toma como base una propuesta específica para el desarrollo de la Estrategia Nacional REDD+, a través de la cual, se acuerda desarrollar SESA de manera paulatina, a medida que se desarrolla dicha Estrategia y de manera que provea insumos para el afinamiento de esta última. Igualmente, se acuerda que el trabajo en involucramiento de actores, no puede ser desconectado del proceso SESA y se definen los momentos y acciones críticas para ese efecto.
Así mismo, un acuerdo fundamental que se logró dentro de este marco en el caso de Argentina es el de trabajar con una sola unidad operativa del proyecto, tanto para el Programa ONU-REDD como para el FCPF. Esta unidad cuenta ya con un borrador de organigrama, así como roles y funciones que sirven para alimentar los objetivos iniciales de estos acuerdos.
Finalmente, también se consiguió establecer de manera general los elementos para desarrollar un plan de trabajo común entre el FCPF y el Programa ONU-REDD, hito sin precedentes en el programa REDD+ en la región, en las áreas de SESA e involucramiento de actores, aspecto altamente relevante pues no sólo apunta a una más eficiente organización sino que facilitará el avance en la gestión de los recursos de preparación para REDD+ en el país.
There are grounds for cautious optimism as world governments intensify their efforts to achieve a global agreement on climate change at the UNFCCC Conference of the Parties 21 (COP21) which will be held at the end of this year in Paris. These efforts could lead to a global deal aimed at effectively tackling climate change and, with it, address not only greenhouse gas (GHG) emissions that result from the combustion of fossil fuels, but also emissions due to deforestation and forest degradation.
One reason for optimism includes the recent agreement between China and the United States, which heralds the importance of global decarbonization by the world’s two largest GHG emitters and ensures that both assume a leading role in these efforts. Equally encouraging is the current determination among rich countries to adequately provide capital to the Green Climate Fund (GCF), with a view of supporting developing countries in embarking on “climate-compatible” – meaning low-carbon and climate-resilient – development paths.
Ultimately, success in Paris will largely depend on progress and agreement on the issue of climate finance, as well as the prospect of mobilizing it at the pace and scale required. Equally, lasting, sustainable success in accomplishing REDD+ objectives will depend on the availability of financial resources required to effectively shift land-use behaviour from conventional, high-deforestation patterns towards smarter, more sustainable, low-deforestation patterns that support livelihoods and green growth.
In the financial arena, there is now more than ever a shared understanding that in order to tackle climate change – and with it REDD+ and sustainable land-use challenges – a major mobilization, or “re-channeling”, of private finance will be required. The underlying rationale is simple: tackling climate change, of which REDD+ is a significant component, requires a transformation of common business practices in the private sector. This in turn requires unprecedented investment at a scale which can and should only be financed privately.
It should, however, be noted that this does not make the role of public finance any less important. The misconception of a rivalry between public and private finance has inhibited progress in these discussions for a long time. Mobilizing private finance of the right scale requires bold public action, be it of a regulatory, legislative, and/or jurisdictional nature. All public action, in turn, requires both public investment and finance. However, as is often the case, public finance is scarce.
Therefore, for both the UNFCCC and GCF, a central question on REDD+ finance should be focused on how scarce public finance can best be used to achieve the greatest possible impact in terms of verified reductions or removals of forest carbon. For the reasons mentioned above, it is clear that the notion of unlocking private REDD+ finance will have to play a central role one way or another. The good news is that both the GCF’s mandate and its emerging design are explicitly geared towards this thinking. This is made clear by the existence of a Private Sector Facility as well as a Private Sector Advisory Group. The question again is “how?”. What are the “interventions” that the GCF should take, the instruments, facilities and mechanisms it should deploy, to achieve an unlocking of private REDD+ finance?
International negotiations have started to yield encouraging answers but many more are needed. In finding answers, the following aspects/questions should be taken into consideration:
Results-based payments are essential for a business case for private REDD+ investment
Private finance, mostly in the form of debt and equity, will always be available for activities that offer a competitive rate of risk and return. In fact, due to this reason, commercial land-use actors often have no difficulty in securing finance to implement such activities that contribute to deforestation or forest degradation. What is wrong then with the risk-return ratio of activities that reduce deforestation? One immediate impediment is that activities at the very core of REDD+, namely the simple act of leaving a forest standing (basic “forest conservation”), often generates no, or an unattractive, direct return compared to many alternative land uses (e.g. agriculture, mining, real estate development). There will never be “naturally occurring” financial revenues and with them a “naturally occurring” financial return associated with conserving forests. An exception may perhaps be found in business models based on ecotourism and non-timber forest products. The consequence is simple: “no revenue” equates to “no return”, which equates to “no entrepreneurial interest in pursuing the activity”, which ultimately equates to no demand for debt or equity investment. From the perspective of commercial land-use actors, no clear business case exists for REDD+ captured by traditional economic measures — at least for forest conservation REDD+ activities.
It should be noted that a robust business case articulated in a language that resonates with the relevant stakeholder is important to more than just commercial land-use actors. National governments of developing countries are likely to share this sentiment and their train of thought will be similar: that “no revenue” equates to “no jobs-creation”, and to “no tax generation”, and to “no poverty alleviation”. It is obvious that this local perception is in stark contrast to the more international perspective that an overwhelming economic case for effective climate change mitigation and the protection of tropical forests globally exists.
Tension does exist between the interests of the global community in a stable climate and the priority of developing countries to alleviate poverty by rapid economic growth through the full exploitation of natural resources including land surface. This tension, when coupled with the absence of a naturally occurring financial return on forest conservation, becomes quite telling with regards to interventions that the GCF should prioritize when aiming to unlock not only private financial flows of debt and equity for REDD+, but — even more importantly — private sector entrepreneurial initiatives. It becomes hard to conceive an international financial framework for REDD+ that is not built around a robust global mechanism for results-based payments. Such payments would then be funded by the wealthier countries in the Climate Convention and disbursed to developing forest countries that demonstrate positive REDD+ performance. Ultimately, they would provide the basis from which financial revenues for forest conservation (and the required lessening of agriculture- and commodity-related pressures on forest frontiers) could be derived, and financial returns for commercial actors generated, which, in turn, would unlock private-sector engagement and investment in REDD+.
Results-based payments are necessary but likely to be insufficient
This highlights the relevance and appropriateness of both theUNFCCC’s Warsaw Framework on REDD+ as well as the subsequent Logic Model for REDD+ Results-based Payments for the GCF, from the perspective of a mobilization of private REDD+ finance. But while it is true that a reliable and efficient system of ex-post results-based payments is a necessary condition for the required paradigm shift in commercial land-use patterns, it is unlikely to be a sufficient condition.
The reasons for this include, firstly, the risk side of the equation (given that performance-based payments only address the return side of the equation). Secondly, the fact that addressing, more systemically, commodity-related drivers of deforestation may require a greater array of public interventions to remove a greater and complex array of barriers in developing countries, beyond the mere prospect of there being results-based payments at the end of the tunnel. Lastly, one has to put into perspective the overall volumes of performance-based payments required in the REDD+ space. In the past, these have been estimated at roughly US$ 20 – 40 billion per year, which is several times the total capital that, for instance, the GCF has secured to-date from donor governments or the cumulative scale of REDD+ finance pledged to date (which is around US$ 9 billion).
Prohibitive risks associated with commercial REDD+ activities can easily inhibit private sector investment even in the presence of financial revenues associated with them. Examples of risks that are typical of investments in many developing countries are overall country and political risks, currency risks and, importantly, policy and regulatory risks, including those associated with land-use and REDD+ related policy frameworks nationally. The latter will be of particular potential detriment to private investment, given that it will be precisely through such national policy frameworks that international results-based payments will, in a second step, be passed on to the implementers of the underlying REDD+ activities on the ground, including private sector actors and financiers. If these frameworks are perceived to be opaque and risky, then private investment will not flow, whether an international system for results-based payments is in place or not. Therefore, helping mitigate, reduce and transfer such risks should be a complementary objective of the GCF, especially through its Private Sector Facility. This could occur by replicating, or by expanding and strengthening existing instruments such as those provided by the multilateral investment guarantee agency, and by tailoring those to the needs of land-use actors in the private sector and their investors.
The need for a nuanced discussion on financial needs for REDD+, barriers to private finance and the required public interventions
Lastly, there are, beyond risk and return, many other barriers that keep commercial land-use actors from changing behavior. These barriers also prevent the providers of capital from re-channeling investment from unsustainable to sustainable business models, and they will be different from one activity type to another. Barriers faced by the proponents of reforestation and afforestation activities are likely to be different from those faced by actors working towards land-efficiency gains in agricultural production, which are in turn likely to be different from those embracing sustainable approaches to forest management. Understanding and considering these nuances is important when designing public interventions aimed at removing barriers. One of UNEP Finance Initiative’s 2015 objectives in the REDD+ and land-use domain sheds light in this area, having developed a study on Demystifying private REDD+ finance — to be published later this year as a follow-up report to the first iteration titled Demystifying private climate finance launched at COP21 in Lima.
By Tim Christophersen, UNEP Senior Programme Officer, Forests and Climate Change and UN-REDD Programme Management Board member.
(this post originally appeared on http://www.landscapes.org)
Nature has developed powerful carbon sequestration machines: they are called trees. And we are now at the point where just reducing emissions will not be enough,” said Tine Sundtoft, Norway’s Minister of Climate and Environment, at the Bonn Challenge Ministerial meeting on 20 and 21 March 2015. “We must actively remove carbon out of the atmosphere. Forest restoration is the most cost-effective carbon capture option we have”. Ms Sundtoft’s call for more forests and trees in the fight against climate change was echoed by meeting participants from around the world. Brazil, China, Colombia, Costa Rica, El Salvador, Ethiopia, Guatemala, Indonesia, Liberia and the Republic of Korea provided detailed insights into their restoration actions. Already 61.5 million hectares have been taken under active restoration since the first Bonn Challenge meeting in 2011, with further pledges in the pipeline. The target was recently made even more ambitious in the New York Declaration on Forests which added another 200 million hectares to be restored by 2030, putting the total envisaged total area at 350 million ha, equivalent to the size of India. Achieving this target could remove up to 1.7 gigatons of CO2 from the atmosphere every year and create well over 80 billion USD per year in ecosystem services.
I have been following the Global Partnership on Forest Landscape Restoration for eight years, and we have made some progress. But what we saw at the Bonn Challenge meeting last week was truly a game-changer. The world has finally woken up to the fact that the magnitude of the climate crisis requires equally large and comprehensive responses, which must include the way we manage ecosystems. Planting trees to restore degraded landscapes is not only a mitigation effort: it helps enhance the ecosystem services people desperately need to adapt to a hotter and water-stressed world. Powerful examples of successful restoration from Ethiopia, China, and Tanzania show socio-economic transformations towards a green economy triggered by large-scale landscape restoration.
Participants in Bonn were reminded about the historic precedent of the economic, ecological and social re-birth of South Korea from when forest cover was less than half of what it is today and the country experienced soil erosion, malnutrition and drought. In the 1950s, Korea looked similar to how Haiti looks today: a once lush country turned into a near-desert, barely able to feed its population. The turning point in Korea was a nation-wide concerted forest restoration effort. Today, Korea has a forest cover of 65 per cent of its land mass, worth over 100 billion USD in ecosystem services or about 10 per cent of the Gross Domestic Product. In the process of the decade-long and centrally controlled restoration effort, hundreds of thousands of jobs were created and agricultural output grew more than four per cent each year.
However, it is important to note that the Korea example would proceed very differently today. We now live in a world where participatory approaches have largely replaced top-down and command-and-control actions and where the awareness of the right to Free, Prior and Informed Consent (FPIC) has been growing in the wake of REDD+ efforts. This is a huge opportunity, because forest landscape restoration that builds on the aspirations and contributions from local communities will be even more durable and more easily attract external and local investments.
Broad and inclusive restoration approaches are emerging in many countries. In Brazil, new legislation is under way to restore 12.5 million hectares within 20 years and create up to 190,000 new jobs in the process. In El Salvador, the Government has pledged to restore over half of all land area following a detailed LIDAR assessment of its forest baseline. They see landscape restoration as an essential investment into ‘natural infrastructure’ for sustainable development.
Political vision and leadership in both these examples is key. El Salvador has set up a ‘sustainability cabinet’ including the Ministries of the Interior, Tourism, Environment, Agriculture and others to collaborate on making investment decisions and developing legislation for sustainable development. And Brazil is contributing to all relevant global commitments with their restoration efforts, on biodiversity, climate change, and desertification. While these efforts are encouraging, the international community is often not yet ready to respond to such efforts in an equally well-coordinated way, and with adequate financial support. The emerging Sustainable Development Goals (SDGs) give us a unique window to demonstrate the contribution of well-managed forests and landscapes to poverty eradication, food and energy security, and a green economy.
Linking forest landscape restoration with REDD+ is becoming increasingly important. The large and growing body of experience with REDD+ safeguards and stakeholder engagement and planning cost-effective actions can and should be a foundation for restoration efforts. In Uganda, the UN-REDD Programme and IUCN aim to fully integrate forest landscape restoration efforts with national REDD+ planning and implementation. The results will be made available to all 58 UN-REDD partner countries, with a view to ensure the international community helps developing countries to integrate land use and climate change. . This would also make for a stronger business case for further public and private sector investments.
UNEP, CIFOR and other partners will convene 150-200 of the world’s leading experts from private, corporate, finance and other sectors in London on June 10 2015 to make a strong case for investments into sustainable land use and forestry. A clear signal of coordination from the UN and other bilateral actors on forests and REDD+ and a close alignment with the SDGs would certainly support a strong business case.
About the author:
Tim Christophersen is the lead expert of the United Nations Environment Programme (UNEP) on Forests and Climate Change. He is a member of the Management Group of the UN-REDD Programme, a collaborative effort of the Food and Agriculture Organization of the United Nations (FAO), the United Nations Development Programme (UNDP) and UNEP, which is currently supporting 58 developing countries in REDD+ readiness and implementation.
Thais Juvenal-Linhares, UN-REDD Programme Secretariat Senior Programme Office highlights the value of forests in celebration of International Day of Forests, 21 March 2015.
(This speech was delivered on 20 March 2015 at the Forests for Food / Food for Forests Conference in Geneva)
“Thank you very much for the invitation to participate at such important celebration for all of us working on the forests and sustainability agenda.
The UN-REDD Progamme is the United Nations Collaborative Programme for Reducing Emissions from Deforestation and Forest Degradation in developing countries, jointly delivered by FAO, UNDP and UNEP. The Programme launched in 2008, and has grown from an initial nine pilot countries to 58 partner countries as of today. It counts on contributions from six donors: Norway, European Union, Denmark, Spain, Japan and Luxembourg, and has mobilized US$ 245 million. By working through development of normative work and direct technical support to countries, the UN-REDD Programme has been able to contribute to raising awareness of the multiple benefits that can be derived from forest protection — beyond climate change mitigation, and its importance for sustainable livelihoods and development.
The Programme works with countries around six work areas focused on protecting and valuing standing forests and addressing all dimensions of sustainable forest management, from monitoring and measurement to governance and green economy. REDD+ has been instrumental in galvanizing interest and support to tropical forests and mobilize technical and financial resources.
Work on drivers of deforestation is one of the most challenging within REDD+. It demands a a good understanding of the social and economic forces that lead to deforestation, which are often outside the forest sector and the particular tropical country where deforestation takes place. So what can be done?
First, we need to better understand what are the drivers of deforestation. These are different from country to country and manifest with varied power intensities. It is clear that agriculture is a very important one as it is estimated that 80 per cent of deforestation is driven by agriculture.
Second, we need to work at the country level to strengthen forest laws; enhance forest governance in transparent and inclusive ways to reconcile social, environmental and economic needs; and build capacity in sustainable forest management, landscape management and agroforestry. Addressing the supply side drivers is fundamental but not sufficient to curb deforestation at the needed pace.
Third, we need to address the demand side. By strengthening global governance through certification and organized consumer actions, as well as adopting legislation enforcing supply from sustainable sources, the main consumer countries and the large commodity-based businesses can accelerate deforestation reduction.
It is not easy however to progress towards such strengthened global forest governance. Among the main challenges is the risk of condemning developing countries to a development model that does not meet their needs. Striking the right balance between growth and commodity production, with adequate transfer of technology and knowledge for increased productivity and sustainability needs to be concomitant to actions on the demand side. Minimizing transaction costs and affording the cost of premiums for streamlining best practices is fundamental. Fully sustainable supply chains will have a cost and market impacts should be neutralized by gains in other parts or production and commercialization process. Finally global goals should be defined by consensus among producers and consumers, avoiding any perception of trade barriers or dumping.
There are many initiatives on the demand side that have already demonstrated some visible effects on reducing deforestation. The UN-REDD Programme is working with developing countries and the private sector to facilitate the adoption of supply side measures that can make supply chains greener while delivering benefits for local communities and indigenous peoples, reconciling the needs of food security and forest conservation.
(This article originally appeared in the February 2015 issue of the InFO News, the newsletter of FAO’s Forest team).
Tiina Vahanen, Associate Secretary-General, XIV World Forestry Congress
When the world’s foresters and forest supporters come together for the XIV World Forestry Congress in Durban in September, they will have a unique opportunity to highlight the urgent need to give forests credit for the true value they provide.
Increasingly, the role that forests play in mitigating climate change is being publicly recognized, and governments and companies alike are pledging to reduce deforestation and restore forests. But we must not lose sight of the fact that more than a billion people depend on forests for their livelihoods, nor that the continued, sustainable use of the world’s forests is vital for rural development.
Decreasing deforestation is not enough: we also need to commit to increasing investment in forests, both to ensure their role as a renewable source of forest products and as a means to lift rural populations out of poverty. Countries need to recognize and strengthen the multiple ways in which forests contribute to national economies, putting a price on the sometimes invisible, non-cash benefits that forests provide for people’s livelihoods, food, shelter and energy needs. Moreover, committing resources to developing and sharing knowledge is increasingly critical to fully capitalize on those benefits.
For this reason, investing in forests as an investment in people is the cross-cutting focus of the XIV World Forestry Congress. In addition, six sub-themes will highlight the role of forests in sustaining life, acting as buffers against environmental change and inspiring new technologies and products, as well as the need to integrate forests and other land uses and to improve forest monitoring and governance.
Preparations for the Congress by the Republic of South Africa and FAO are well under way, with an inspiring programme that includes special events on climate change, fuel wood, innovation and investment, water, wildlife and youth, as well as the launch of a new Global Forest Resources Assessment report.
Our hope is that the Congress in Durban will be the most dynamic and inclusive yet, with broad participation from governments, universities, civil society, the private sector and individuals with a personal interest. In particular, we are working to ensure that the voices of young people, women and local communities will be heard.
To this end, the Congress sessions will be more interactive than ever before, with interviews, debates, cuttingedge discussions with skilled moderators and innovative uses of social media to stimulate and engage a wide range of participants. We are delighted to report that the call for abstracts has resulted in over 2000 submissions from around the world, including – for the first time – proposals for videos demonstrating the successes and challenges of work going on in the field.
Ultimately, the Congress will be judged on its outcomes. Among these we expect exciting new collaborative partnerships and networks, and the exchange of a great deal of invaluable experience, ideas and knowledge. The Congress will also issue a set of key messages that we hope will be instrumental in strengthening the role of forests and forestry in sustainable development, in underscoring forestry’s contribution to the implementation of the new post 2015 agenda, and in paving the road to a new climate change agreement at the UNFCCC COP21 in Paris in December.
I hope as many of you as possible will join us in Durban to add your voice to the vital task of defining a lasting vision for the sustainable future of forests and forestry.
Follow the XIV World Forestry Congress:
Congress homepage: www.fao.org/forestry/wfc
Twitter hashtag: #WFC2015
“While the comparatively few corporate pioneers are reducing their dependency and impacts on the environment, quantifying environmental risks in monetary terms may be necessary to convince the majority of corporations that do comparatively little to follow suit.”
Over the past few years I’ve visited numerous corporate sustainability conferences around themes such as water, REDD+, climate change and biodiversity. The same corporate leaders are often present at such meetings such as Coca Cola, Unilever, Akzo Nobel, Rabobank. These and other leaders regularly top indices such as the Dow Jones Sustainability Index (DJSI), which measure the environmental, social and economic sustainability of their direct business operations and increasingly also indirect impacts through their supply chains. But what about their sector peers?
There are around 45,000 listed, publicly owned companies globally and an unknown number of privately owned companies. The DJSI World Index includes 309 best-in-class companies out of a total sample of 2500 largest companies in the S&P Global Broad Market IndexSM. Other data and index providers typically track around 3000 companies, which mean that ‘only’ 5-6% of all listed companies are being tracked on their environmental and social performance, and that less than 1% can be considered ‘best-in-class’ in terms of their environmental and social performance. This shows there is a need to track the 80-90% of listed companies (notwithstanding the countless privately owned small and medium enterprises).
But why do some companies take environmental issues serious, but the majority don’t? The reasons differ within and between private sectors, but can include pressure of non-governmental organisations, shifting consumer preferences for sustainably sourced products, investor demand, and stricter environmental and social regulatory requirements by governments around disclosure, procurement and certification. To date it has proved to be difficult to calculate the (lack of) efforts that companies are conducting to reduce their environmental impact and dependency in monetary terms. But – apart from government regulation – developing methods that directly price corporate environmental risks in terms of higher or lower costs or earnings may be a major way to convince the larger majority to follow suit.
Pricing environmental risk: what does that mean?
Many companies directly or indirectly either depend on environmental services such as water, fish, timber, etc or impact the environment through deforestation, greenhouse gas emissions, water and air pollution, etc. Corporate environmental risks are related to the probability of any of these impacts or dependencies to affect standard financial metrics such as EBIT (Earnings Before Interest and Tax) and costs. Ultimately, the value of a company – whether publicly listed or privately owned – should be adjusted for the financially material environmental risk in Profit & Loss (P&L) statements, corporate balance sheets and in the share price. This could and should both be in positive and negative sense in order to stimulate innovation.
Is pricing a panacea?
No! Tropical deforestation and forest degradation, depletion of fishing stocks and degradation of coral reefs are serious environmental concerns but it may be too technically difficult in some cases to price the risks for companies that are affected by it, or it may turn out that the risks are not significantly material for a company to adjust its business model. At the same time, building models to price climate change risks through ’carbon budgets’ for fossil fuel companies what CarbonTracker andBloomberg are doing or have done, or pricing water risk for corporate bonds or public equities what the NCD, GIZ and Bloomberg are working on, may eventually stimulate or convince a greater number of companies to reduce environmental impacts and dependencies.
(This blog post is produced by the UN-REDD Programme’s regional office for Asia Pacific in a series of Go-REDD+ monthly articles)
REDD+ is a mechanism under the UNFCCC, and for this reason, it is the decisions of the Conference of the Parties (CoP) to the UNFCCC that guides all of us in designing, developing and implementing national REDD+ programmes. It is therefore essential that we have a good understanding of exactly what the CoP decisions mean. However, for anyone wanting to educate themselves on CoP decisions, there are a couple of significant barriers to overcome or questions to answer.
Firstly, which CoP decisions mention REDD+? Most CoP meetings reach a large number of decisions, and only a few, at most, will be relevant to REDD+. Secondly, as anyone who has tried to read a CoP decision will know, CoP decisions are written in a rather strange, stylized language that is difficult to follow, even for native English speakers, unless you have been immersed in the UNFCCC process for some time. Here’s an example, from Decision 14/CP.19:
“The CoP … Decides that, consistent with decision 1/CP.16 and decision 2/CP.17, annex III, the data and information referred to in paragraph 3 above should be provided through the biennial update reports by Parties, taking into consideration the additional flexibility given to the least developed countries and small island developing States.”
What does this mean? As the majority of us have not been immersed in the process, it is extremely difficult to work out what exactly this is referring to – requiring a reader to refer back to two previous decisions as well as to text earlier in the same decision.
Fortunately, the REDD+ Cambodia Programme, with support from the UN-REDD Programme, has produced a handy publication that helps to overcome both of these barriers, The Road from Bali to Warsaw: Collection of COP Decisions on REDD+.
Thirteen CoP decisions from CoP-13 (Bali) in 2007 to CoP-19 (Warsaw) in 2013 are included in the publication. These are all of the CoP decisions directly related to REDD+. But, in addition to bringing all the decisions together in one publication, with the full text of each decision reproduced, the value of the publication comes from the fact that each decision is preceded by a box which summarizes what it means in “normal” English. So, going back to the example quoted above, the box that precedes Decision 14/CP.19 explains that it is the data and information used for the estimation of anthropogenic forest-related emissions and removals that should be reported through the biennial update reports, and that the data needs to be transparent and consistent over time, including with the established REL/RL.
Also, by having all decisions compiled in a searchable document, it is possible to quickly and painlessly check on all decisions related to a particular issue. So, for example, if you are interested in all decisions related to safeguards, it is a simple matter to discover that you need to study Decisions 1/CP.16, 2/CP.17, 12/CP.17, 9/CP.19, 11/CP.19, and 12/CP.19.
Even for those of us who work full time on REDD+, it is necessary from time to time to remind ourselves of exactly what the CoP has decided. Having everything in a single publication can therefore save a lot of time and effort. The Road from Bali to Warsaw is an invaluable resource for anyone involved with REDD+ to understand exactly what the international community is expecting when it comes to implementing REDD+.
(Additional resource: The UNFCCC has also produced this Decisions booklet on REDD+.)
Helen Clark, UNDP Administrator, addresses participants of the 2015 World Economic Forum in Davos, Switzerland. UNDP is one of the collaborating UN agencies of the UN-REDD Programme, together with FAO and UNEP.
I thank Jeff for the introduction, and thanks to the World Economic Forum for organizing this important session.
I am pleased to have this opportunity to address this diverse group of leaders, from such a wide range of sectors, on the critical importance of reducing tropical deforestation related to key agricultural commodities. This cross-sectoral dialogue and collaboration is crucial to build on the momentum of the last year and successfully address deforestation.
Since our Davos Forests session last year, I have been very pleased to witness the growing global partnership around addressing deforestation, both as a climate change issue and a development issue.
Importantly, forest countries have made substantial progress on developing and implementing forest strategies, with support from the international community; Parties to the Climate Convention reached significant agreements on how REDD+ will work; and the Open Working Group on Sustainable Development Goals has included new forest targets in its proposal for the new development agenda.
Dozens of major players in the palm oil industry have also committed to eliminating deforestation and human rights violations from their supply chains. As a result, the percentage of the world’s palm oil trade covered by sustainability commitments has grown from fifteen per cent to over ninety per in the past fourteen months – an unprecedented and inspiring achievement. I know that our Forest session right here in Davos last year contributed significantly to this accomplishment.
This sense of momentum, partnership, and action, was also evident at the UN Climate Summit in New York last September, when a global coalition of countries, states, companies, indigenous peoples, and NGOs announced the New York Declaration on Forests. This Declaration set out an unprecedented public-private commitment to halve deforestation worldwide by 2020 and end it by 2030.
Since September, the number of endorsers of the Declaration has grown to 177, and I take this opportunity to thank those who helped drive this process, many of whom are here today: Prime Minister Solberg of Norway; David MacLennan, CEO, Cargill; Paul Polman, CEO, Unilever; Abdon Nababan of AMAN; Ollanta Moises Humala Tasso, President of Peru; Joko Widodo, President of Indonesia; and many others.
As the New Climate Economy Report shows, policies which reduce deforestation can stimulate economic growth and development, spurring agricultural productivity, eliminating rent-seeking behavior, and accelerating the clarification of land rights – thereby reducing social conflict and associated risks to investment.
Commodity production without deforestation can be a win for the climate, and for inclusive development and economic growth, and for smallholder famers and indigenous peoples. But – we will only see these wins achieved if we all act together. We have before us a collective action challenge which requires a global public-private partnership in response. Only if we all do our parts can we achieve these wins.
To build on 2014’s progress, and ensure that 2015 is an equally promising year for the world’s forests, the private sector needs to continue to build on and expand the substantial commitments made over the past year.
At the same time, it is critical that governments and the international community also step up and commit to doing their part. In particular, the international community needs to commit to providing adequate, sustainable, and predictable payments for REDD+ results at a large scale.
With momentum building, the agenda for 2015 must address several key challenges. I urge all of us over the course of this afternoon to consider the following questions:
• What must we do to trigger further commitments to deforestation-free sourcing of other agricultural commodities (beyond palm oil) during 2015? What would it take to have the soy, paper & pulp, and beef sectors in a similar position to palm oil by next year’s Climate Change conference in Paris?
• What must we do to ensure that these commitments are implemented on the ground, and that they contribute to national agendas for economic growth and sustainable and equitable development?
• What must we do to ensure that the all-too-often economically marginalized rural populations benefit from these transformations – particularly smallholder farmers and indigenous peoples?
My thanks again to the World Economic Forum for organizing this session, and for your valuable assistance last year in the preparation for the Climate Summit, and to all of you for being here.
The UN system is committed to working with you to continue to advance the Forests agenda, and to carry forward this spirit of progress and collaboration to Paris and beyond.
(This blog post originally appeared on the UNDP’s blog).
As world leaders and heads of business descend on Davos this week for the World Economic Forum, discussions on the crucial role of forests in tackling climate change while helping sustain over 1.6 billion forest dependent people remain key in 2015 – a bellwether year for climate change and sustainable development.
UNDP Administrator Helen Clark will open the session “Reducing Tropical Deforestation Related to Key Agricultural Commodities” in Davos with expected participation from President Ollanta Moises Humala Tasso of Peru; Laurent Fabius, Minister of Foreign Affairs and International Development of France; CEO’s Marc Bolland of Marks and Spencer and David M. MacLennan of Cargill; and Jeremy Goon, Chief Sustainability Officer of palm oil giant Wilmar.
“Forest conservation is critical to climate change mitigation. Our forests absorb carbon dioxide and provide a range of other services, but when cleared they become a significant source of greenhouse gas emissions,” Helen Clark said, speaking ahead of the event.
Over thirteen million hectares of forests are cleared annually, around three times the area of Switzerland – contributing up to 20 percent of global emissions, and threatening economic progress and human well-being.
With a global climate agreement due to be finalized at the Paris Climate Conference at the end of the year and forests to be included in the Sustainable Development Goals to be adopted by UN member states in September, Helen Clark says 2015 matters like no other year since the turn of the century.
Referring to the UN Climate Summit hosted by UN Secretary General Ban Ki-moon in September 2014, as well as recent unprecedented progress advancing deforestation free supply chains, she said “we need to maintain and build upon the momentum made last year,” the year scientists have marked as the warmest on record.
The Climate Summit’s forests action area, which UNDP facilitated, saw the launch of theNew York Declaration on Forests – a ground-breaking partnership of companies, governments, civil society and indigenous peoples pledging to halve forest loss by 2020 and end it by 2030.
Addressing deforestation promises multiple wins – for the climate, for inclusive development and economic growth, for smallholder famers and indigenous peoples – but only if all sectors act together.
Keeping all sectors engaged is crucial and Davos is the key ground for this to take place. Last year, participants at the Davos session on forests focused on advancing deforestation-free supply chains. As a result, 2014 saw the percentage of global palm oil trade covered by ‘deforestation-free’ commitments grow to over 90 percent – an unprecedented accomplishment.
With leaders such as Norwegian Prime Minister Erna Solberg, Unilever CEO, Paul Polman and Abdon Nababan, Secretary-General, Indigenous Peoples’ Alliance of Indonesia (AMAN) in attendance this year, delegates will discuss how ‘deforestation-free’ commitments might be expanded to cover new commodities and new companies, and examine how smallholder farmers and indigenous peoples can benefit from the implementation of these commitments.
“It is hoped that the private sector will build and expand on the significant commitments already made to achieve deforestation-free supply chains. Governments and other must also commit to playing their necessary roles to that end,” Helen Clark said.