Strategic Options to Advance The Conservation of Natural Forests

Forest TrendsAndy White, Augusta Molnar, Alejandra Martin, Arnoldo Contreras-Hermosilla,

Sara Scherr

Presentation to the GEF Roundtable on Forests, 2nd UNFF, New York, 3/11/02

Overview Findings (Lessons?) since Rio In Transition: What has changed since Rio? Looking Forward: Devising an Agenda

Opportunities to Increase Commitment and Incentives

Options to Advance Goals Potential Roles for Key Players

Conclusion: To Johannesburg and Beyond Implications for ODA and GEF

Findings (Lessons?)Since Rio

Continued deforestation & degradation in developing, regrowth in developed

Limited impact/disenchantment/weariness of global processes

Problem much more complex than thought: driven by state actions, entrenched constituencies; face political tradeoffs rather than ‘win-wins’

Despite rhetoric, poverty not a key concern; focus on public protected areas (PAs)

Low level of effort - in sum, not a priority: either in ‘South’ or ‘North’

Lessons (?) Continued

Focus on PAs inadequate: must address forest matrix (1.0 billion hectares)

Owners (mostly govts) have no/limited incentive for conservation (protection and SFM)

Why so difficult to commitment and incentives?

Govt. authority exceeds capacity (in terms of land and regulatory reach)

Existing policies and regulations make forestry more expensive than options (e.g. agriculture)

Financing for ‘public services’ has not yet materialized

What has Changed Since Rio?

Newly perceived threats: alien invasive species & climate change

Both require multi-sectoral approaches Both require reconsidering conservation strategies

Community control of forests At least 25% owned or administered Must ‘engage’ communities: more rights or more

compensation Huge opportunity and challenge for global community

domestic demand: tradeoffs between plantations and natural forests

DD is 90% of total trade; growing faster than int. demand Plantations a ‘double-edged sword’: reduce pressure but

reduce value Natural forests: sole comparative advantage for millions of

poorest

What has Changed Since Rio?

Globalization & industrial restructuring ‘bad’: global reach of (corruptible) industry ‘good’: (some) new players, new ethics, new money

Demand for environmental services Natural disasters driving new appreciation Many innovations at domestic level: Brazil, Costa

Rica, Colombia ($ billions) New global mechanisms: CDM, others underway

Attention to governance, certification Illegal logging ‘out of the closet’ Certification: greatest contribution – active, inclusive

debate, required for payments for environmental services, but: raises costs of forest mgt.

What has Changed Since Rio?

assertiveness of ‘South’ and reduced ODA from ‘North’

frustration with agreements: “show me the money!!!” ‘N’ dissatisfied with results: “money down rat holes” Looking for new mechanisms (partnerships ?)

Summary: reasons for hope Old challenges: markets, tenure, governance, industry New opportunities to achieve 3 goals (social,

environment, economic): markets, tenure, governance, industry

Must increase domestic and international commitment and financial incentives

Must do things differently – but what?

Looking Forward: Devising an Agenda for Conservation

Opportunities to increase commitment and incentives

Domestic constituencies necessary – but not sufficient ODA: $ 1.2 billion/year and declining GEF: $ 50 million/year and (?) CEPF: $ 20 million/year and (?) Private philanthropy: $ 70 million/year and stagnant International payments: CDM - $ .063 – .36 billion/year Private capital: $28 billion/year in exports (alone!) In-kind contributions of poor: $ (?) billions Domestic payments for env. services: $2- 5

billion/year

Looking Forward: Devising an Agenda for Conservation

Summary analysis: ODA/private philanthropy small player

If $2.5 billion/year: $6.0/ha (210 million has of ‘hotspots’) $1.8/ha (700 million has of PA) $.7/ha (1.7 million has of all developing country forest)

Can’t compete with gov’t options: royalties ($ 1-5/ha/year) + timber ($80/ha/year)

‘Conservation concessions’ non-viable strategy (even less viable if consider the equity implications)

Private flows the big player ODA should refocus to ‘leverage’ transformation in

private sector: for conservation and for poverty alleviation

Options to capture value and advance conservation

Addressing governance issues Reform public timber concessions Control illegal logging/corruption Develop/strengthen independent certification Adopt regular, independent audits of

government performance Shift ownership and access to communities

Increase investments to facilitate transition Identify/clarify rights to forest services Generate and share transition strategies

Options to capture value and advance conservation

Reform policies to provide incentives for SFM Remove regulatory barriers ‘level the playing field’ for small-scale producers Involve local producers in policy negotiations

Promote community enterprises and joint ventures Characterize and establish markets for low-income

producers Improve market position/strengthen producer

organizations Promote business partnerships Establish business services (links in chain)

Establish domestic markets for services Build knowledge and capacity Build institutional framework Make deals (encourage innovation)

Options to capture value and advance conservation

Establish international payment mechanisms for services Strengthen existing innovative

mechansims PCF, PSequestrationFund

Transform CDM into more useful tool for natural restoration and development

Privilege natural over plantations Reduce transactions costs for communities

Devise something new (for WSSD?)

Conclusion: to Johannesburg and Beyond

Past: 3 goals, 3 strategies Future: 3 goals, 1 strategy

Converging social/environmental/economic agendas: new scope for impact

Pro-poor policy and tenure reforms: + social, + economic, + environmental

Shift focus from PAs to forest matrix + mitigate threats, + social, + environmental, +

economic development Shift ODA/GEF/Private philanthropy from

‘ignoring’ to ‘transforming’ private sector

Implications for ODA/GEF What does “leverage” private sector mean?

What is done differently? Some ideas: Help build new institutional frameworks for markets

Advance certification Help reform laws/regulations Help devise standards, due diligence procedures Identify innovation, ‘good’ practice, and disseminate Help leaders from the ‘S’ learn from each other,

connect with new sources of ideas and money

Remember: our challenge is to save 1.7 billion HAs of forest and alleviate the suffering of some 500 million people: must be much more strategic than we’ve been