Changing Roles of Forests and Their Cross- Sectoral …...1 Changing Roles of Forests and Their...
Transcript of Changing Roles of Forests and Their Cross- Sectoral …...1 Changing Roles of Forests and Their...
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Changing Roles of Forests and Their Cross- Sectoral Linkages
in the Course of Economic Development
Based on A Paper by Uma Lele, Alain Karsenty, Catherine Benson, Judicaël Fétiveau, Manmohan Agarwal and
Sambuddha Goswami
United Nations Forum on Forests Open-ended Intergovernmental Ad Hoc Expert Group
on Forest Financing, Second meeting (AHEG2)
Vienna, 14-18 January 2013
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Questions Addressed in the Paper
• What are key factors underlying changes in forest cover loss and gain in the last two decades including relationship to other sectors and external factors?
• Is growth and prosperity possible without causing further damage to the environment including to and from forests?
• What is the future of forests given dramatic changes in the global context in the last two decades?
• What implications for policies and investments for more pro-forest outcomes going forward?
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The Good News
• Forest cover loss in 2000-2010 has slowed1 in 35 (mostly developing) countries that constitute well over 90 % of the loss2
• Several middle income developing countries have increased their forest cover
• Tree cover outside the forest sector has increased
• Reduced forest loss/ increased gain… despite accelerated rates of global economic growth, driven by all developing regions
• Share of forest emissions in total global carbon emissions has declined
• These achievements are the result of the efforts of developing countries themselves
• They have occurred without much external financing
1. Compared to the 1990-2000 period 2. FAO 2010
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Factors Explaining Reduced Rate of Forest Loss and Increased Forest Gain in Selected Forest Rich and
Forest Poor Countries
• Brazil • Indonesia • Central Africa
• China • Vietnam • India
Reduced Forest Loss but importing deforestation
Forest Gain More plantation forests but
exporting deforestation
Improved Forest Governance particularly in Brazil, changes in International Markets and
Prices
Tenure rights, Agricultural Productivity Growth, PES (
particularly in China)
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The Bad News
• Net global gain is less impressive because some countries have “exported” their deforestation.
• Initial size of the forest cover and per capita income (closely related to quality of governance) explain most of rate of forest cover loss;
• With accelerated speed of globalization, global trade in forest and agricultural products has increased with increased incentives to deforest.
• Despite some slowing following the great recession in 2008 -- globalization is accompanied by increased FDI, Savings and investment, integration of global commodity, financial , land and foreign exchange markets. The speed may resume over the long haul.
• Demographic pressures, urbanization, and income growth have expanded markets for food and agriculture, and minerals.
• Share of forest emissions in total emissions has declined in part because deforestation has slowed but also because emissions in other sectors have increased
• Biofuels policies and subsidies of developed countries exert pressure on forests through land use changes and have reduced supply of cereals traded on the global markets increasing food prices.
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Importance of Governance
• Barring a few notable exceptions (e.g. Brazil), weak institutions and poor governance remain widespread challenges
• Governance is determined by a complex set of factors including political will, information and knowledge, country capacity and opportunity cost of land use
Governance takes time to improve.
• Gains in governance as well as those in global market forces are reversible.
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Somalia (210)
Lao PDR (163)
Malaysia (82)
Mali (146)
Chad (200)
Mongolia (108)
Uganda (162)
Nepal (184)
Peru (134)
Colombia (132)
Botswana (57)
Angola (179)
Korea,DPR (195)
Ghana (91)
Papua New Guinea (157)
Cambodia (164)
Ethiopia (174)
Zambia (116)
Honduras (149)
Paraguay (156)
Ecuador (143)
Mozambique (117)
Cameroon (171)
Bolivia (129)
Venezuela (188)
Argentina (93)
Congo, DR (207)
Zimbabwe (193)
Mexico (112)
Tanzania (123)
Nigeria (199)
Myanmar (201)
Sudan (208)
Indonesia (136)
Brazil (92)
-3000 -2500 -2000 -1500 -1000 -500 0
Annual Change Rate (1000 ha/yr) (1990-2000)
Top 35 Countries with Collective> 90%+ of Global Forest Loss And Their Ranking in Governance Index (also see slide #8)
Namibia (80)
Somalia (210)
Lao PDR (163)
Mali (146)
Chad (200)
Mongolia (108)
Uganda (162)
Colombia (132)
Malaysia (82)
Ghana (91)
Botswana (57)
Honduras (149)
Peru (134)
Angola (179)
Korea,DPR (195)
Papua New Guinea (157)
Ethiopia (174)
Cambodia (164)
Zambia (116)
Paraguay (156)
Mexico (112)
Ecuador (143)
Mozambique (117)
Cameroon (171)
Argentina (93)
Venezuela (188)
Bolivia (129)
Myanmar (201)
Congo, DR (207)
Zimbabwe (193)
Tanzania (123)
Nigeria (199)
Indonesia (136)
Australia (15)
Brazil (92)
-3000 -2500 -2000 -1500 -1000 -500 0
Annual Change Rate (1000 ha/yr) (2000-2010)
() shows country rank in
governance among 210 countries by composite Governance Index
2011 Constructed by authors using WB governance indicators
() shows country rank among 210 countries by composite Governance Index 2011 Constructed by authors
using WB governance indicators
Source: FRA 2010 and http://info.worldbank.org/governance/wgi/index.asp
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Russian Federation (161)
Germany (21)
Cuba (100)
Australia (15)
Turkey (106)
Uruguay (45)
Belarus (173)
New Zealand (5)
Philippines (138)
Finland (1)
Chile (41)
Italy (76)
France (26)
India (119)
Viet Nam (130)
Spain (51)
United States of America (31)
China (144)
0 500 1000 1500 2000
Poland (50)
Greece (83)
Uruguay (45)
Belarus (173)
Chile (41)
Cuba (100)
Philippines (138)
Bulgaria (94)
France (26)
Norway (3)
Italy (76)
Sweden (4)
Spain (51)
Turkey (106)
Viet Nam (130)
India (119)
United States of America (31)
China (144)
0 500 1000 1500 2000 2500 3000
Top 18 Countries with> 90% of Forest Gain And their Ranking in Governance Index
Source: FRA 2010 and http://info.worldbank.org/governance/wgi/index.asp
Annual Change Rate (1000 ha/yr) (1990-2000)
() shows country rank among 210 countries by composite Governance
Index 2011
() shows country rank among 210 countries by composite Governance Index 2011
Annual Change Rate (1000 ha/yr) (2000-2010)
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Land use changes in the last two decades are part of long run structural transformation of countries
at different stages of development What is Structural Transformation?
1. Declining share of GDP originating in agriculture and (mostly natural) forests,
2. Declining share of employment in agriculture and forestry,
3. Rural-urban migration,
4. Growth of the services and the manufacturing sectors and
5. A demographic transition, i.e., reduction in the population growth rates.
• Differences in labor productivity between the agricultural/forestry/rural sector and non -agricultural sectors narrow as countries develop.
• There is often a huge and even a widening gap in productivities between sectors at early stages of development.
• Magnitude of rural poverty is reflected in the difference between the share of employment in agriculture (including forestry) and its share in GDP at early stages of development.
• With more intensive agriculture and economic development more land becomes available for forest regeneration under a mosaic of land uses .
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Forests have been at the center stage of Climate Change negotiations in the new millennium
• Leading to REDD(+) as a “performance based system” different from traditional forms of aid.
• Based on the principle of “sovereignty”. • Underlying arguments:
Forests play a large role in carbon emissions Developing countries are the major source of carbon
emissions It is seemingly cheaper to reduce carbon emissions in
developing countries than in developed countries It is in the interest of developed countries to compensate
developing countries because (until recently) they were the major sources of GHG emissions leading to climate change
It is in the interest of developed countries to compensate developing countries for forest carbon loss, particularly if there is to be a binding post Kyoto global agreement to reduce carbon emissions.
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Several assumptions underlying REDD+ are being questioned
• Measurable performance is not possible with many institutional dysfunctions
• Binding post Kyoto global agreement/regime is increasingly in doubt,
• A part of weakening multilateralism and rise of bilateralism
• With OECD countries fiscal woes political will to compensate developing countries is weakening
• Without prospects of a binding regime carbon market has collapsed
• The Carbon Market Collapse is leading to Domino effect on mitigation investments as well as overall climate finance resources. (Carbon Finance, WB 2011)
• As Post Kyoto deal has become more distant, developing countries’ share of GHG emissions has increased weakening argument in support of a “moral imperative” for OECD finance.
• Forests’ role in carbon emissions is declining
• REDD is turning out to be difficult to design, implement and finance
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REDD+ Will not be a “quick and cheap” way of curbing GHG Emissions
• Funding REDD through carbon offsets sales is contested by some stakeholders, • Major players (e.g. EU) fear it creates massive amounts of “hot air” depressing carbon
prices even more • Issues of additionality, leakage and permanence… not addressed in a convincing way • Private sector and conservation NGOs push for remunerating project-based activities • But REDD+ has been designed as remunerating countries for their performances, not
projects. • The idea of compensating the Opportunity Costs for keeping forests is theoretically
correct but complex to operationalize • “Opportunity Cost” keeps on changing with new pressures on forest areas (mining,
agribusiness, oil, urbanization) , • Land Tenure Issues (recognition of exclusive rights) are crucial for implementing
incentives (PES) on the field • Meaning of “performance-based” with respect to local governance, “fragile states”
and the limited reach of national public policies is a challenge: • A broader concept of “performance” is needed linked to reform process and
coherence of public policies to address drivers underlying deforestation. • Large and sustained investments in agriculture, land tenure, land-use planning and
governance are required before realizing performance • YET REDD+ offers an opportunity for catalyzing investments for Structural Reforms
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PES helps to demonstrate Interactions between forests and other sectors and their implications
for future action
• PES can be used within REDD+ schemes or as national programs funded through taxes on water or fuel distribution (Costa Rica, Mexico….)
• PES cannot be limited to land use-restricting contracts based on compensation of the opportunity cost of conserving forests:
Leaving poor people in their poverty condition is not desirable
PES should build assets for getting people out of poverty through viable economic alternatives :
PES need to be embedded into rural development policies
• Tenure rights: need to grant local communities and/or households with management and exclusive rights, and the public property of some forested areas should be established by law after consultations with the stakeholders
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REDD+ Needs to Learn from History
• Forests at the Center stage in the 1990s due to heightened concern about biodiversity loss
• The excessive focus on conservation of primary tropical forests and the “logging ban” had a chilling effect on donor investments
• Forests needed an eclectic approach rather than blunt instruments to address forests’ multiple functions-
• To Address Forests’ Multiple Market and Non-Market Values their management calls for a wider understanding of the underlying causes of losses and gains of multiple values and Steps to Address them
• World Bank’s 1991 Forest Strategy was revised to reflect these lessons following OED Evaluation in 2000.
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Implications For the Future
• Strong but often insufficiently appreciated Linkages between forests and the rest of the economy
• They go beyond biodiversity or carbon emissions/sequestration
• Successful Developing Countries pursue a multi-sectoral approach to forest management which includes: Water, food, energy, transport, mining
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Implications for the Future
• Move from a carbon centric” and “conditional carbon performance based financial transfer” approach, where promised finances often do not materialize, but divert attention from key issues,
• Pursue an eclectic/holistic approach to forest management • Help build developing countries’ own information and knowledge,
technology, human, institutional, policy, implementation and M and E capacity
• Promote substantive South –South and South-North Cooperation.
• Build a genuinely multi-stakeholder coalition including particularly the local communities—not just the governments’ action
• Tackle the underlying drivers of deforestation
• Promote joint and sustained investments for “greening” the economy which create gainful employment and incomes.
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Land-use
change black
line: Includes
management-
climate
interactions
Role of Forests in Greenhouse Gas Emissions has declined for good and bad reasons: Forest Carbon Emissions and Rate of loss vary by stages of development and have declined from 2004
to 2010 progress in other sectors is slow! Es
Source: WDR team, based on data from Barker and others 2007 (Figure a) and WRI 2008 (Figures b, c, and d) -- taken from WDR 2010 and for (Figure e) Le Quéré et al. 2012; and Global Carbon Project 2012.
Figure e
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GDP Growths by Region (constant 2000 US$)
(1970-2011)
East Asia & Pacific (developing only) High income
Latin America & Caribbean (developing only) Middle East & North Africa (developing only)
South Asia Sub-Saharan Africa (developing only)
Source: WDI and Global Development Finance, World Bank Note: MENA--data is not available for the year 2011
Global Growth Driven by All Developing Regions since 1990
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DAC Members’ Total Net Resource Flows to Developing Countries (1970-2010)
Note: Net OOF flows were negative in 2000-01, 2003-04 and 2006-07 & 08. Source: http://stats.oecd.org/Index.aspx?DataSetCode=CRSNEW
Private Capital Flows
ODA
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Total Agricultural Products Imports by Region (Import Value in Million$) (Real=Nominal/MUV) (MUV Index
2000=100) (1970-2010)
AFRICA NORTH AMERICA LATIN AMERICA AND CARIBBEAN EAST ASIA SOUTH ASIA SOUTH-EAST ASIA REST OF ASIA EUROPE OCEANIA
Source: FAOSTAT
Faster Growth of Agricultural Products Imports and Exports than Merchandise (1970-2010)
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Total Agricultural Products Exports by Region (Export Value in Million$) (Real=Nominal/MUV) (MUV Index
2000=100) (1970-2010)
AFRICA NORTH AMERICA LATIN AMERICA AND CARIBBEAN EAST ASIA SOUTH ASIA SOUTH-EAST ASIA REST OF ASIA EUROPE OCEANIA
Europe
Asia
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Total Forest Products Imports by Region (Import Value in Million$) (Real=Nominal/MUV) (MUV Index
2000=100) (1970-2011)
AFRICA NORTH AMERICA LATIN AMERICA AND CARIBBEAN EAST ASIA SOUTH ASIA SOUTH-EAST ASIA REST OF ASIA EUROPE OCEANIA
Source: FAOSTAT
Europe and Asia dominate in Faster Growth of Forest Product Trade than Merchandise Trade Index 2000=100) (1970-2011)
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Total Forest Products Exports by Region (Export Value in Million$) (Real=Nominal/MUV) (MUV Index
2000=100) (1970-2011)
AFRICA NORTH AMERICA
LATIN AMERICA AND CARIBBEAN EAST ASIA
SOUTH ASIA SOUTH-EAST ASIA
REST OF ASIA EUROPE
OCEANIA
Europe
Asia
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Total Forest Products Imports (Import Value in Million$) (Real=Nominal/MUV) (MUV Index
2000=100) (1970-2011)
(Brazil, India, Indonesia and China)
Brazil China India Indonesia
Source: FAOSTAT
Growing Role of Brazil, India, Indonesia and China in Forest Trade Total Forest Products Imports and Exports (1970-2011)
0
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Total Forest Products Exports (Export Value in Million$) (Real=Nominal/MUV) (MUV Index
2000=100) (1970-2011)
(Brazil, India, Indonesia and China)
Brazil China India Indonesia
IMPORTS EXPORTS
China is both a major importer and exporter of forest products through
value addition
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Long Term Global Food and Biofuel Challenge will drive land use changes
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Rest of East Asia
and Pacific12%
Europe and
Central Asia0%
Latin America
and the Caribbean
3%
Middle East and
North Africa1%
Rest of South
Asia7%
Sub-Saharan
Africa11%
China
44%
India
22%
1981Population living below $ 1.25 a day=1899.83 mil
Rest of East
Asia and Pacific
10%
Europe and
Central Asia0%
Latin
America and the
Caribbean
3%Middle
East and North Africa
1%Rest of South
Asia8%
Sub-Saharan
Africa16%
China
38%
India
24%
1990Population living below $ 1.25 a day=1818.45 mil
Rest of East Asia
and Pacific8%
Europe and
Central Asia1%
Latin America and
the Caribbean3%
Middle East and
North Africa1%
Rest of
South Asia11%
Sub-Saharan
Africa28%
China
15%
India
33%
2005Population living below $ 1.25 a day=1373.7mil
China’s Poverty Share was the largest of A Much Larger Poverty Incidence in 1981
South Asia 44% and SS Africa 28% of Global Poverty In 2005
Note: The survey years for all the regions except India are 1981, 1990 and 2005 but for
India the survey years are 1977.5, 1987.5 and 2004.5.Data Source:
http://go.worldbank.org/NT2A1XUWP0(PovcalNet); Figure taken from GFAR Paper/ GAT
Report.
Reducing Poverty is a necessary condition for improved management of natural resources
Population living in Poverty below $1.25 a day (1981, 1990 and 2005)
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Number of Undernourished Concentrated in South Asia and SSA 1990-92 VS. 2010-12
Data Source: The State of Food Insecurity in the World 2012.
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Source: FAOSTAT 2012
Total Food Supply by Region (Crops Primary Equivalent + Livestock and Fish Primary Equivalent)
(kcal/capita/day) (1961-2007)
World + (Total) Africa + (Total) Northern America + (Total) Central America + (Total)
South America + (Total) Eastern Asia + (Total) Southern Asia + (Total) South-Eastern Asia + (Total)
Western Asia + (Total) Europe + (Total) Oceania + (Total)
Over and Under Consumption of Food on the Same Planet
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Source: International Water Management Institute analysis done for the Comprehensive Assessment of Water Management in Agriculture using the Watersim model.
Water Scarcity will Increase Food Insecurity Areas of Physical and Economic Water Scarcity
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Demand for PES is growing to protect watersheds: both water quantity and quality
• Relationship between forests and watersheds complex and basin specific
• Huge growth in PES attributable to demand for watershed protection
• Easier to tax urban consumers
• Little Evidence on impacts of PES on forest cover or watershed protection and it is mixed
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External aid to food agriculture and forests had impacts on food price index
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Agricultural TFP Growth Crucial but lagging in South Asia and Sub-Saharan Africa leading to forest clearing
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250
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TFP
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Agricultural TFP Indexes Growths, by Region (1961-2009)
SUB-SAHARAN AFRICA (EXCLUDING SOUTH AFRICA) LAC
SOUTH-EAST ASIA SOUTH ASIA
MENA OCEANIA
Source: Fuglie’s Worksheet 2011
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Difference between the Share of Value Added and Share of Employment in Agriculture (Brazil, India, Indonesia and China) (1980-2009)
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Forests are impacted by choices made in the energy sector
• Poverty determines fuel wood use
• Increased supply of energy is critical for growth and poverty reduction
• Biofuels are a game changer
• …. but other energy choices also affect forests
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Source: Brian Wright and Yang Xie
Food and Energy Real Price Indices (1960-2011)
Food real price index … Energy real price index …
Food and Energy Price Indices Are Increasingly Moving Together
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Source: BP Statistical Review of World Energy (2012)
Total Primary Energy Consumption by Region (Million tonnes oil equivalent)
(1970-2011)
Total North America Total South and Central America Total Europe & Eurasia
Total Middle East Total Africa Total Asia Pacific
How much of East Asia’s Energy “Consumption” meets domestic demand and how much meets world
Total Primary Energy Consumption Has Grown Fastest in East Asia
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1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Source: BP Statistical Review of World Energy (2012)
Carbon Dioxide Emissions by Region (Million tonnes carbon dioxide)
(1965-2011)
Total North America Total S. & Cent. America Total Europe & Eurasia Total Middle East Total Africa Total Asia Pacific
Carbon Emissions TRACK closely with Energy USE in Slide #29
Carbon Dioxide Emissions by Region
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Source: WDI and Global Development Finance, World Bank
Energy use per $1,000 GDP (constant 2005 PPP) by Region (kg of oil equivalent)
(1980-2009)
East Asia & Pacific (developing only) High income
Latin America & Caribbean (developing only) Middle East & North Africa (developing only)
Energy use per $1,000 GDP has been declining fastest in Asia, but not as rapidly in other Regions
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Data Source: WDI and Global Development Finance, World Bank
Energy use per capita remains low in developing regions relative to developed regions but is growing rapidly…
energy choices matter
High income countries
Developing countries
Kgs of oil equvalent per capita
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Europe has less polluting total primary energy consumption than other regions
Shares By Fuel Types (2011)
Source: BP Statistical Review of World Energy (2012)
Coal and oil dominate energy consumption
Coal + oil 81% 48% 56%
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'00
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Fuel Wood Consumption (1996-2008)
AFRICA ASIA OCEANIA EUROPE NORTH AND CENTRAL AMERICA SOUTH AMERICA
Source: Adapted from the FAO State of the World Reports, 1997-2011
Poverty and Fuel Wood Go Hand in Hand: Asia and SSA dominate in fuel wood use
40 Source: IRENA 2012
Hydro power: both good news and bad for forests It increases power supply, reduces pressure on fuel
wood, but can damage watersheds
World Hydropower Technical Potential
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Forests and Health
• Growing interaction between wildlife and humans has been resulting in spread of infectious diseases from animal to humans – not only a public health issue, but also an economic one. e.g. HIV AIDS, Ebola and malaria
• Forests and forest products are a major source of formal and informal medicines
• But progress on developing countries realizing pharmaceutical values has been limited
• Recreational value
• Forests are an important source of mental and physical well being, hence recreational uses of forests should emphasize enhanced benefits, minimum damage to forests.
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Forests and Transport
• Roads and deforestation are closely linked
• Assess likely impacts of roads on forest conversion before investments are made in roads
• Consider alternatives—e.g. railroads, which are more benign on forests
• Increase emission standards
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Forests and Mining
• Mining in some cases is second largest threat to large intact forests
• In other cases small localized damage
• Mining can be followed by promotion of reforestation or conversion of forest fragments with natural regeneration
• Safeguards developed by the World Bank and other international organizations are intended to minimize harm to forests and to forest-dependent people. But they also increase transaction costs and reputational risks of investments involving forests
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Thank You