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Forests in a

June 2011

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What is a Green Economy?

 A Green Economy is one that results inincreased human well-being and socialequity, while significantly reducingenvironmental risks and ecologicalscarcities. 

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Why a Green Economy?

•  A Green Economy is an economic vehicle for sustainabledevelopment

•  A Green Economy has strategies to end the persistence

of poverty• !t is a central theme of "io#2$

• !t is a new economic paradigm that can drive growth ofincome and %obs, while reducing environmental risk and

scarcity

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Forests in a Green Economy

• &orests are a critical link in the transition to a greeneconomy

• 'he International Year of Forests 2011 and WorldEnvironment Day, are unprecedented opportunities forgovernments, civil society and business to promoteforests as critical contributions to a green economytransition via sustainable management, forestconservation and payment schemes

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Forests in a Green Economy

'he ()E* report+

• *rovides a roadmap for greening the forest sector thatwill contribute to the discourse in the lead up to "io#2$

• .ets out options for policy makers to enable atransformation of the forest sector

• E/amines the conditions for significantly increasinginvestments in forests and the underlying goods andservices forests provide

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Why Forests?

• &orests generate income andprovide employment

• &orests provide nutrition,reduce vulnerability anddiminish energy scarcity

• 'rends in deforestation arestill alarmingly high

• 'he current approach tomanagement of forests is a0frontier1 approach

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In a Green Economy

• *ublic and private investments in forests are catalyedand supported by targeted policy reforms, regulationchanges and capacity building

• &orests are managed and invested in as an asset classand are important factors of production

• !nternational mechanisms increase investments inforests

• &orest management hinges critically on an effective andtransparent accounting system

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Investments in the Forest !ector 

• 'he Green Economy "eportsuggests that an averageannual additional investment of"!# $0 %illion is required tohalve global deforestation by

2$3$, and increasereforestation and afforestationby 1$0 &er cent by 2$4$,relative to business as usual56A(7

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Investments in the Forest !ector 

• 'argeted investments in forestscould generate about 10 million new %obs around the world

• 8ost of this increase occurs via anincrease in small and medium sied

enterprises• !n the forest sector, '0()0 &er cent 

of the enterprises are small andmedium sied

• .8Es currently provide more than

*0 &er cent of forest sectoremployment in many countries

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Ena%lin+ ,onditions

"ole of the Internationalcommunity

•  Agree on an international"E99# scheme

• Generate knowledge on forestecosystem services

• .timulate engagement fromthe commercial financial sector 

• "e-invest income from

royalties and ta/es into theforest sector 

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Ena%lin+ ,onditions

"ole of  Governments

• Guarantee adequate returnson risk-ad%usted investment

• 9evise transparent and

efficient procedures•  Agree on a national vision for

ways and means in whichforests can contribute todevelopment

• Employ market-basedinstruments to promote greeninvestment and innovation

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Ena%lin+ ,onditions

"ole of -usiness and FinancialInstitutions

• !nvesting in forest pro%ects

• *roviding independent, easily

accessible and verifiable riskassessments

• :everaging resources andproviding debt finance

• !nsuring and guaranteeing

investment and risks particular tothe forest sector 

•  Applying conventional financialinstruments to the forest sector 

&.; ;anada

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!uccess !tories

• India < 'he country recently approved a national mission for aGreen !ndia

• Ja&an < 'he 8etropolitan Government 6ureau of =aterworks in'okyo manages forests in the upper reaches of the 'ama "iver to

increase recharge capacity• ,osta ica / &orest related interventions have led to economicgrowth and a dramatic increase in forest cover 6y 2$>$, it hadrecovered up to 4> per cent of the country1s land area

• ietnam - 'he restoration of natural mangrove forests at the cost of

(.? >> million resulted in annual savings of (.? @3 million in seadyke maintenance

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ayment for Ecosystem !ervices

*ayment for Ecosystem .ervices 5*E.7

• oluntary transactions which compensate ecosystemservice providers 5for instance forest landowners7 forproviding watershed protection, carbon storage,

recreation, biodiversity or other ecosystem services

Ecuador  ( 'he local government in thetown of *imampiro pays "! #(#12 perhectare per year to a small group of

farmers to conserve forest and naturalgrassland in the area surrounding thetown1s water source

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EDD3

• "educing Emissions from 9eforestation and &orest9egradation 5"E99#7 recognies the role of forestdegradation and deforestation in limiting GBG emissionswith conservation, sustainable management, and

enhancement of forest carbon stocks as eligible activities-ra4il / 'he Amaon &und receivesconditional funding from 5or6ay toachieve deforestation reductiontargets

Indonesia - !n 2$>$, the countryreceived a "!# 1 %illion from )orwayin return for agreed measures totackle deforestation and degradation

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,onclusion

• &orest management cannot be left entirely to markets

• Governments and the international community need toundertake policy reforms to create incentives tomaintain and invest in forests

• 6usinesses and financial institutions need to be active inpromoting investments in the forest sector

7han8 You