Putting a true price on forests before it’s too late

iStock_000021968539MediumIn pure dollar terms, tropical forests are worth more dead than alive. And that’s a problem if you want to fight climate change.

Forests will be a focus of major U.N.-led climate talks that start next week in Warsaw in Poland, although few expect any breakthroughs at the two-week meeting, seen more as a stepping stone towards a new global climate deal by 2015.

Forests urgently need a better deal if the planet is step up the fight against climate change, scientists say. Every year, about 13 million hectares (32.5 million acres) of forest is lost, mostly cleared for agriculture, according to the U.N.’s Food and Agriculture Organization. That is about twice the size of Ireland. Of this, an average of 9.3 million ha was cleared across 121 tropical countries between 2000 and 2010, the FAO says.

This is a global problem and people living in big cities from London to Shanghai, New York and Sydney are playing a part in deforestation, even if they don’t realise it.

Rainforests are everywhere on supermarket shelves in beef burgers and steaks, soy milk, cookies and ice cream and toilet roll as well as paper packaging. Large tracks of forest have been cut down over the years to make these and many other products. This also means consumers have a lot of power to change the way these essentials are produced.

Most people inherently understand rainforests are important and that clearing millions of hectares a year is not such a great idea. Rainforests are huge storehouses of species, trap large amounts of water for rivers that feed cities and industry and help regulate the climate. But we don’t generally think of them in pure dollars and cents terms.

As calculating as it sounds, we need to think from a sustainability perspective if forests fro are to compete with the growing demand for food and resources. By 2030, the world will likely need to produce about 50 percent more food than today and that means more pressure on agricultural lands and forests and risk of social conflict with forest-dependent communities.

For example, the production of soy, palm oil, beef and pulp and paper accounts for about 80 percent global deforestation.


Chopping down forests represents roughly 15 per cent of the world’s greenhouse gas emissions. In a warming world, you want to keep your remaining forests. They soak up large amounts of carbon dioxide, the main greenhouse gas, meaning they can act as a brake on pace of global warming. There are other benefits, too, as a vital resource for local communities, from medicines to food to building materials.

About 350 million of the world’s poorest people, including 60 million indigenous people, use forests intensively for their subsistence and survival, according to the FAO. In total, more than a billion people depend on forest resources for all or part of their livelihoods. Cutting them down causes poverty and increases social conflict. That’s bad for politicians.

“Unfortunately, tropical forests are currently worth more, in financial terms, dead than alive,” Norwegian Minister of Climate and the Environment, Tine Sundtoft, told a major forestry meeting in Oslo last month.

“Most of the world’s standing tropical forests are found in countries in great need of economic growth,” she said. “However, both the short-term and long-term consequences of forest destruction are huge.”

The saving of forests must be understood to contribute more to national development and income than destructive uses of the forests. Otherwise, destruction would continue, she added.

Much is being done to slow and eventually halt large-scale deforestation. The big question, though, is whether those efforts will come fast enough.

U.N. climate talks are trying to deliver a deal to finance forest preservation, while NGOs and buyers are trying to pressure agricultural producers to commit to zero-deforestation-free supply chains. Consumer groups are demanding better product labelling, while efforts to ensure better legal rights for indigenous groups to own and manage forests are leading to large areas managed by communities and better mapping of legal boundaries.

Efforts are also being made to put an economic value on the environmental services forests provide, such as acting as watersheds, carbon storage and flood control, and getting governments and companies to add these to balance sheets – part of a process called natural capital accounting.

All these steps are slowly leading to changes in the way forests are valued.

But further pressure is needed from consumers, the finance sector, tougher law enforcement and better policies, NGOs say.

And the supermarket is a great place to start.


San Francisco-based Rainforest Action Network , or RAN, recently launched its “Conflict Palm Oil” campaign in the United States targeting 20 snack food brands, including Campbell Soup Company, H.J. Heinz Company, Kellogg Company, Krispy Kreme Doughnuts Corp, and The Hershey Company.

RAN says palm oil is found in about half the packaged food products sold in grocery stores, from chocolates to biscuits to cooking oil and ice cream. It is calling on the companies to adopt responsible palm oil procurement policies. Very little palm oil is produced via a method in which it can be traced from a sustainable plantation all the way to the product in the shop. Stronger consumer pressure, it is hoped, will prompt producers to increase production of greener, segregated palm oil.

A study by Greenpeace earlier this year said clearing of forests for palm oil production was estimated to be the single largest driver of deforestation in Indonesia, accounting for roughly a quarter of forest loss between 2009 and 2011. Indonesia is the world’s top palm oil producer.

In Brazil, cattle ranching is the leading cause of deforestation, though some ranchers are now adopting more sustainable practices, such as better pasture management.

Big brands are trying to green their supply chains but need government support. For example, the Consumer Goods Forum in 2010 pledged to achieve zero net deforestation by 2020. That doesn’t mean zero deforestation but, according to WWF, this means it leaves room for change in the way the landscape is used, provided the net quantity, quality and carbon density of forests is maintained. The forum comprises more than 400 members, including global retailers and manufacturers, such as Unilever, with annual sales of more than $3 trillion.

Pressure is also growing on big commodity producers to be more efficient in the way they use the land, including investing in higher yields and expanding on already degraded land rather than simply clearing more forest. Better law enforcement, improved forest monitoring via satellites and improved rights and tenure for local communities can also lead to a drop in deforestation.

These steps helped Brazil achieve an 80 percent drop in deforestation from 2004 to 2012, falling to about 4,600 square kilometres (1,776 sq miles) last year, according to government data, based on detailed satellite analysis of land use change. Yet agricultural production has continued to grow in some Brazilian states.

In Indonesia, which lacks a satellite forest monitoring system, about 7,000 sq km was chopped down every year between 2005-10, mostly for agriculture, according to the FAO. That’s nearly 10 times the size of Singapore. But no one really knows the true figure because Indonesia does not include forest cleared for timber plantations to feed the country’s large pulp & paper industry.


Indonesia has the world’s third largest extent of tropical rainforests and is estimated to have lost about half its forests, much more than Brazil. On Sumatra island, only about a third of the original forest area remains, and most years during the dry season, large areas opposite Singapore and Malaysia are burned to clear the land for agriculture.

Such fires help make Indonesia one of the world’s top greenhouse gas polluters, with more than half the country’s greenhouse gas emissions coming from deforestation and land clearing, particularly clearing, draining and burning of peatlands, according to government data.

Simply paying Indonesia to save its forests is one idea but it has proved complex and controversial in a country with opaque land laws, powerful agricultural conglomerates and growing demand for food and resources by the nation’s 240 million people.

Norway has promised Indonesia $1 billion as part of a multi-year climate deal. Norway says it will reward Indonesia for projects that protect threatened tracts of rainforest and which lock away millions of tonnes of carbon. The scheme is related to a U.N. programme called REDD, or reducing emissions from deforestation and forest degradation in developing countries.

At its simplest, REDD was designed as a pay-and-preserve scheme — richer nations pay developing countries to lock away their forests. In return, developed nations would earn carbon offsets to help them meet a portion of their emissions reduction targets at home.

In reality, REDD has turned out to be far more complex and costly to implement and also taken much more time to develop. The lack of a liquid, global carbon market to buy and sell REDD carbon credits has also slowed development (credits are currently sold in the smaller voluntary market). Lack of an overall agreement in U.N. climate talks on financing and disagreements over standards for poorer nations to monitor, report and verify emissions reductions from saving forests has further dented progress.

Nonetheless, REDD has showed great potential because it has helped governments better understand the value of forests from an economic and social point of view and led to better technology and, in some cases, better institutions for monitoring forests. Continual refinement of REDD has also led to better community participation and tougher carbon measurement standards to ensure carbon offset buyers are purchasing real carbon reductions from protected forests.

But REDD still needs a further push via the troubled U.N. climate talks process and to re-assure developing nations that financing to help build up government institutions and implement laws will be delivered and be sufficient. Failure to agree on financing and a way to deliver it could scupper REDD.

A breakthrough on forests is key to the 2015 global climate deal, according to Mexican senator Alejandro Encinas Rodríguez and Lord Deben, president of the Global Legislators Organisation (Globe) and chair of the UK Committee on Climate Change.

“In the run-up to 2015, how REDD is handled will be crucial,” they wrote in a recent commentary in the Guardian. “And breaking the deadlock on forests can provide a breakthrough necessary to advance international climate negotiations ahead of 2015,” they said, adding greater involvement of national parliaments was needed.

At present, the small number of REDD projects that have been created and fully verified, rely on the voluntary market to earn money though carbon credit sales, while the original vision of a global market in traded REDD credits is a long way off.

That leaves market pressure from consumers, major buyers and financiers that lend to big commodity producers as key ways to curb deforestation.

Current practices mean the damage to remote jungles is really not so remote for most people who buy food at the supermarket. As the global population and demand for food continues to grow, pressure on forests does as well, meaning there is limited time to place a new value on forests to prevent vast tracts from going up in smoke.

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