Potential
Policy Approaches and Positive Incentives to Reduce Emissions from
Deforestation in Developing Countries
A submission
to the Secretariat of the Framework Convention on Climate Change
1. Introduction
While a small group of countries
have made significant progress in reducing deforestation over the
past decades, global deforestation rates continue to be unacceptably
high. In 2006, the International Tropical Timber Organization concluded
that only 5% of all tropical forests were managed in a sustainable
manner. Unsustainable forest management is the main cause of forest
degradation, while the conversion of forests into agricultural land
is by far the main cause of deforestation. The expansion of large-scale
agro-industrial monocultures for food, fiber and, increasingly, energy
production is both an important direct cause of deforestation and
an important underlying cause of forest loss; the expansion of monocultures
on existing arable land causes cattle ranching and other forms of
agriculture to move towards forest areas and other natural ecosystems.
The UN Framework Convention on
Climate Change (FCCC) obliges all Parties that ratified the Convention
to conserve and enhance forests and other sinks and reservoirs of
greenhouse gases. 1 The FCCC also
obliges developed countries to provide financial assistance to developing
countries to achieve these and other obligations 2.
The Global Environment Facility, which was recently replenished with
3.13 billion US dollars for the coming four years, was chosen as the
interim financial mechanism to channel this financial support. The
Global Environment Facility is in great need of reform, if only because
it currently takes an average of 66 months to decide on medium and
large project proposals. However, it should be emphasized that its
small grants program is widely appreciated as an effective instrument
to support, amongst others, policies to reduce deforestation.
2. The Need to include
all Forms of Deforestation
Deforestation and forest degradation
are both significant causes of greenhouse gas emissions. It should
be noted that the replacement of natural forests by monoculture tree
plantations is considered to be a form of deforestation by those who
foster a definition of forests based on biological science, though
it is formally not defined as deforestation according to the definitions
adopted in the Marrakesh Accords of the Parties to the Kyoto Protocol.
Whether defined as deforestation or forest degradation, the replacement
of natural forests by monoculture plantations is a worldwide trend
that forms a significant source of greenhouse gas emissions. On average,
in tropical areas, plantations store, at best, one-quarter of the
carbon stored by natural forests. It is essential that efforts to
reduce emissions from deforestation address the emissions caused by
the direct or indirect replacement of forests by monoculture plantations.
If the political discussion is limited to deforestation, it would
be important to change the definitions used so that the emissions
caused by this replacement are taken into account.
3. Perverse Incentives:
Policies Triggering Large-scale Leakage
Policies and incentives to reduce
deforestation can only be effective if they address the underlying
causes of forest loss and the macro-effects of forest policies themselves.
Already in 1996, the UN Intergovernmental Panel on Forests recognized
the need to address the underlying causes of deforestation and forest
degradation. In its final recommendations, the Panel encouraged countries
to formulate national strategies in this respect.
If the macro-effects are not
addressed, policies and incentive schemes targeting specific forest
areas will unavoidably lead to “leakage”. The term “leakage”
is quite inappropriate in so far that it suggests a small-scale impact,
while the macro-effects of forest policies can trigger deforestation
trends that are actually larger than the positive impacts of these
policies on specific areas. Schemes to halt logging in one area will
unavoidably promote logging in other areas unless overall timber consumption
and log and pulp processing capacities are diminished, and the development
of infrastructure in these areas can trigger deforestation of much
larger areas than the area originally protected. Schemes that provide
a positive incentive for the expansion of eucalypt, oilpalm and soy
monocultures, tend to promote the expansion of forms of land use that
provide very little labor per hectare of land. Eucalypt plantations,
for example, provide up to 800 times less employment per hectare than
traditional forms of family agriculture. In fact, these forms of land
use replace many small farms. As many of these small farmers will
be forced to move to new, unexploited areas beyond the agricultural
frontier, these schemes trigger a rapid expansion of the agricultural
frontier into forests and other natural ecosystems. The rapidly rising
demand for biofuels is already becoming a major cause of deforestation
in regions like South East Asia, and it is expected to become a major
cause of deforestation and rural depopulation in many other regions
too. Standards that only guarantee that the crop concerned has not
been produced on recently deforested ignore these macro-effects on
forests. Most existing certification initiatives (with the exception
of FSC) even allow genetically modified crops, causing major, unpredictable
environmental and social risks. Especially the use of genetically
modified trees could have devastating impacts on natural forests,
due to the high risk of genetic contamination. The impacts of such
macro-effects on greenhouse emissions are very hard to estimate.
Another more indirect example
of leakage is caused by payments for environmental services (PES)
schemes. These schemes tend to create a perverse “right to deforest”
for landholders, the macro-effect of which tends to be that a country
risks losing most of its forests unless it is able to pay a compensation
for every square meter of existing forests. The Brazilian government
has calculated that a modest payment for environmental services scheme
as implemented by the government of Costa Rica would cost them 5 billion
dollars per year if applied to just a third of the Amazon. If applied
to the entire Amazon, the Atlantic forests and all its other forest
ecosystems, the Brazilian government would have to spend at least
20 billion dollars per year on payments for environmental services
to guarantee halting its forest loss.
4. Cheap and Simple:
the Deforestation Ban
Happily, there are much cheaper
ways to reduce deforestation. In Paraguay, a country plagued by problems
of bad governance and impunity, the government succeeded in reducing
deforestation by at least 85% in the eastern half of the country between
May 2004 and May 2005, thanks to a legally straightforward deforestation
moratorium combined with very modest investments in GIS forest monitoring
technology and systematic law enforcement based on the satellite information
gathered.
In fact, satellite monitoring has made it possible in many countries
to monitor forest law enforcement much more effectively than people
would have dreamt of ten years ago. Deforestation bans already exists
in most European countries, China, Thailand, Costa Rica and many other
countries, and they have proven to be very effective and relatively
cheap policy instruments. In most major forest countries, especially
in Indonesia and Brazil, there is a lively internal political debate
about the possibility of a country-wide deforestation ban, and the
most important NGOs in these countries are strongly in favor of such
a ban.
5. The Need to Safeguard
the Social Sustainability of Forest Policy
Payment for environmental services
schemes and other market-based conservation mechanisms also tend to
create significant negative social impacts, as they further marginalize
women, Indigenous Peoples and other social groups that already have
a marginal position in the market economy. These groups are strongly
dependent on access to the goods and functions of forests and other
ecosystems for their livelihoods, but they often lack the money to
pay for environmental “services”. These groups also have
less marketing skills and formal land titles to compete in such a
market. Carbon trade is specifically detrimental to these groups as
it tends to negatively impact land reform and processes to recognize
Indigenous Peoples’ land rights. The carbon sinks market has
already led to devastating impacts on Indigenous Peoples and local
communities in countries like Ecuador, Brazil and Uganda
3. The positive exceptions of carbon finance that did
contribute positively to community governance have all been the result
of intense public governance and official development aid rather than
market forces. Even an often lauded payment for environmental services
scheme such as the one in Costa Rican is the result of a combined
tax and subsidy system developed and implemented by the Costa Rican
government with the help of large amounts of official development
aid. Meanwhile, the Costa Rican government has failed in its attempts
to sell its scheme on the commercial carbon market, as the price of
a ton carbon saved is about twice as high as the current market price
for carbon sequestration. Without generous donor support and the income
provided by its mandatory fuel tax the Costa Rican scheme would have
ceased many years ago.
While strict public governance
can address many of the negative impacts of payments for environmental
services schemes that are implemented by governments and other public
institutions, most of these socially equitable schemes are commercially
infeasible. In fact, there is no existing example of a socially just
and environmentally sound PES scheme that has been fully financed
through the carbon market or other market-based conservation schemes.
Most schemes promoted as successful examples of PES are classical
combinations of taxes and subsidies with at most 10% additional carbon
finance, and it should be noted that introducing them into international
markets might lead to severe complications with WTO and other trade
rules that prohibit commercial initiatives to be co-financed through
market-distorting subsidies. It should also be emphasized that these
schemes require quite a lot of regulatory and fiscal capacity of governments
to avoid fraud and other socially harmful impacts, while policies
like deforestation bans tend to be much easier to implement thanks
to modern remote sensing technology.
It should be emphasized that
deforestation bans and moratoria should also take into account social
impacts. Shifting cultivation in secondary forests can be a socially
and environmentally sustainable form of land use provided it is applied
within a system of community governance and social checks and balances.
In consultation with Indigenous Peoples and local communities, governments
should allow for exceptions to deforestation bans for activities that
do not lead to long-term degradation of the forests concerned.
6. Positive Social Incentives
versus Perverse Financial Incentives
It is of utmost importance that
incentive schemes are not narrowed down to include only relatively
expensive and socially inequitable payments for environmental services
schemes, but that more innovative forms of incentives like recognizing
land rights and education and awareness building are also promoted.
The discussion on positive incentives tends to be dominated by economic
actors with a strong stake in financial incentives like the forestry
sector and large conservation NGOs, but the most successful policies
that succeeded in halting and reversing deforestation have actually
been based on such social incentives. In those countries where deforestation
was halted it was mainly education, public awareness raising and fostering
the traditional value systems of Indigenous Peoples and local communities
that formed the key to successful forest policy. These policies created
strong social incentives that translated into numerous innovative
community-based forest governance schemes. These social incentives
also formed the main force behind the increased political will of
governments to set and enforce regulations to address corporate and
other free-riders that ignored these community-based forest conservation
schemes. Of course, whether broad public awareness and traditional
value-systems to conserve forests translate into government policy
also depends on sound democratic decision-making. Regretfully, forest
policies are still dictated by special interest groups in many countries.
For that reason, safeguarding genuine democracy and public participation
rights and regulations as laid down in treaties like the Aarhus Convention
is a pre-condition to ensure forest policy responds to the values
of the majority of the population.
7. Conclusion: Policies
and Incentives that Work
Recognizing and safeguarding
Indigenous Peoples’ territorial rights over their own, often
widespread, forest areas, has proven to be a highly effective policy
for reducing deforestation in many countries, including, for example,
Colombia and Panama. The recognition of their territorial rights forms
an important incentive for these Peoples to foster their traditional
sustainable forest management systems. Likewise, community conserved
areas have proven to be an effective and socially just form of forest
conservation in countries like India.
The Mumbai Initiative, an initiative
developed by NGOs and social movements attending the World Social
Forum recommends, amongst others, that “Governments
must ensure an enabling environment for the community governance of
forests.” The Initiative emphasizes that “Indigenous
peoples and other forest dependent communities living in and using
forests for their survival needs are the true protectors and governors
of these forests and enjoy inalienable rights over their forests...The
protection and conservation of forests demand that their rights be
ensured.” It also points out that “The
historical role and positive contribution of women in the governance
and nurturing of forests must be recognised and their full participation
in decision making must be ensured.” The Mumbai Initiative
urges Governments to “ensure that legislation and policies
comply with the above principles.” and it urges “NGOs
and other civil society organizations at national and international
level committed to the conservation of forests and to the protection
of forest peoples' rights” to “have a
supportive role to peoples’ initiatives to govern the forest
and to be accountable to them.” The Initiative highlights
that “Society at large benefiting from the broad range
of products and services provided by forests must support communities
in their efforts to govern and conserve forests.” but
it rejects market-based conservation mechanisms: “The
commodification of nature and forests by corporations, governments,
international institutions and some NGOs is not acceptable.”
4
These principles are supported
by the Global Forest Coalition and many of its members as a set of
principles that provide guidance to effective and socially just policies
and positive incentives. It is recommended that the Parties to the
Framework Convention on Climate Change take these principles into
account when further elaborating policies and positive incentives
to reduce deforestation. Providing well-targeted, predictable and
sufficient financial support to developing countries is an obligation
of developed countries under the FCCC. It should be emphasized in
this respect that it is the quality rather than the quantity of financial
support that determines the success of forest policies. Carbon finance
has already proven to be unsustainable, unpredictable, unstable and
inequitable, causing major financial deficits in regions like Africa,
and among communities and social groups like Indigenous Peoples and
women that are most in need of support for their forest policies.
For that reason it is essential that governments, both in developed
and developing countries, fulfill their obligations under the FCCC,
conserve and enhance forests and other carbon sinks and reservoirs,
and ensure the availability of sufficient official development aid
to enable developing countries to meet these obligations.
The Global Forest Coalition
is a worldwide coalition of NGOs and Indigenous Peoples Organizations
involved in international forest policy. The mission of the Global
Forest Coalition is to reduce poverty amongst, and avoid impoverishment
of, indigenous peoples and other forest-dependent peoples by advocating
the rights of these peoples as a basis for forest policy and addressing
the direct and underlying causes of deforestation and forest degradation.
For more information please visit http://www.wrm.org.uy/GFC
or contact Simone Lovera, Bruselas 2273, Asunción, Paraguay,
tel/fax: 595-21-663654, simonelovera@yahoo.com.
NOTES
1
“All Parties, taking into account their common but differentiated
responsibilities and their specific national and regional development
priorities, objectives and circumstances, shall: ...Promote sustainable
management, and promote and cooperate in the conservation and enhancement,
as appropriate, of sinks and reservoirs of all greenhouse gases not
controlled by the Montreal Protocol, including ..., forests ...”
(FCCC Article 4.1 (d)).
2 “The developed
country Parties and other developed Parties included in Annex II shall
provide new and additional financial resources to meet the agreed
full costs incurred by developing country Parties in complying with
their obligations under Article 12, paragraph 1. They shall also provide
such financial resources, including for the transfer of technology,
needed by the developing country Parties to meet the agreed full incremental
costs of implementing measures that are covered by paragraph 1 of
this Article and that are agreed between a developing country Party
and the international entity or entities referred to in Article 11,
in accordance with that Article. The implementation of these commitments
shall take into account the need for adequacy and predictability in
the flow of funds and the importance of appropriate burden sharing
among the developed country Parties.“ (FCCC Article 4.3)
3 See amongst
others http://www.wrm.org.uy and
Lohmann, L. (ed.) “Carbon Trading, a Critical Conversation about
Climate Change, Privatisation and Power”, published by the Dag
Hammerskjold Foundation, 2006, http://www.dhf.uu.se/pdffiler/DD2006_48_carbon_trading/carbon_trading_web.pdf
4 See also
http://www.wrm.org.uy for the full text of the Mumbai Initiative
and more information about this movement.
