Time for action on forest finance
US President Barack Obama began this month's IUCN World Conservation Congress by noting that "climate change and conservation are inextricably linked". Nowhere is this more apparent than in the world's forests.
Conserving forests means gaining an indefinite carbon sink, it means securing the livelihoods of millions of people and it means we can begin to mitigate climate change, the effects of which are becoming increasingly more apparent.
Yet whilst there is momentum in forest conservation – from 2014’s New York Declaration on Forests, through the expansion of the Bonn Challenge and onto the incorporation of REDD+ into the Paris Agreement – we are not moving fast enough. Some of the fundamental issues are the need for collaboration platforms able to work with a variety of stakeholders and issues surrounding funding.
On the latter, the billions in funding pledged by Governments and public donors to REDD+ remains largely unspent whilst the private sector waits on the side-lines. As a single example, APP remains the only private sector commitment to the Bonn Challenge forest restoration programme, and given the number of businesses that stepped up to the New York Declaration on Forests, we should consider what is needed to get the private sector more involved.
That is not to say that forest finance is not working at all. Take the success of New Forests, a sustainable forest investor operating largely in the timber sector in attracting investment from Japan’s second biggest trading house, Mitsui & Co. Clearly as New Forest’s experience demonstrates, there is growing interest from investors in funding forests. This interest at the moment is in sustainable commercial forestry.
Unlocking forest finance for conservation means creating the same sort of incentives that are driving investors into sustainable commercial forestry. That means creating a realistic prospect of return such as through a workable carbon trading system where natural forest is efficiently valued. It also means rethinking how projects are structured, with more of a focus on communities and indigenous peoples; whom despite often insecure land tenure and lack of technology are amongst some of the most effective custodians of the forest.
Yet we cannot expect communities and indigenous peoples to conserve forests out of only the goodness of their hearts, or to wait for an indefinite payment delivered only once the project is shown to be working. The way current systems are set up to withhold payments until carbon is successfully safeguarded is of little appeal to a village community able to gain near instant rewards from agricultural conversion. An urgent priority for REDD+ and similar schemes, if payment by results must remain is to investigate effective financial bridging to ensure that communities’ needs are met whilst projects get underway.
The private sector also has a clear role, both in terms of ensuring that corporate pledges are followed through by action, but also to get stuck into projects directly where appropriate; providing relevant expertise and by doing so, remove some of the risk of failure for larger donors and investors. This is what APP is seeking to achieve through our support for the Belantara Foundation.
The IUCN World Conservation Congress ended on a positive note with a clear five year agenda of closing domestic markets to ivory, protecting the high seas and a greater focus on primary forests. When considering how we can protect the latter, it’s past time that the private sector began to match commitments with action, and we can start by making forest finance available, accessible and most importantly, effective.