Speakers:

Johan Eliasch - UK Prime Minister’s Special Representative on Deforestation and Clean Energy

Frances Seymour - Director General, CIFOR

Chair:

David Brown - ODI

Johan Eliasch started his presentation by thanking the numerous organizations that provided analysis for his review. He then presented the key findings of the review.

One achievable ambition set up by the study is to make the forest sector carbon neutral by 2030 with emissions from forest loss balanced by new forest growth.  The Review's analysis suggests that including REDD in an effective trading system could provide the incentives to reduce deforestation emissions by up to 75% by 2030. Taking into account afforestation and reforestation activities, this would achieve the goal of carbon neutrality.  In order to achieve this goal, the forestry sector needs to halve its emissions by 2020.

96% of deforestation emissions come from developing countries, thus there is a potential to increase financial flows from the developed world to the developing world.

The finance required to halve emission from forests by 2030 is of the order of US$ 17-33 billion per year. Before getting a global cap-and-trade system up and running, we need a gradual approach, where funding from international institutions is used side-by-side with funds from partial access to carbon market. A carbon market could generate US$ 7 billion per year and fund a 22% cut in deforestation emissions, but there would still be a funding gap, of US$ 11-19 billion a year in 2020. This funding should be provided by public funds, private investment and ‘pump-priming’ of market mechanisms (NB: for more details, look at slide 10 of Mr. Eliasch’s presentation, which contains a explanatory graph of this statement).

Governance issues and the distribution of funds and participation of forests communities are very important concerns. There are many ways by which forest communities might participate in the forest mechanisms. Mr. Eliasch outlined the UN Declaration on the Rights of Indigenous Peoples (articles 18 and 19). We have to take account of the fact that each locality has its own particularities. Governments should devolve responsibilities and rewards to local actors (authorities, companies, NGOs, communities) to support national-level action. Forest nations may choose to manage carbon revenues through a special fund with broad-based participation to help promote transparency, accountability and financial management.

National governments should take the lead supported by the international community. Key areas of national level governance include:

·         National strategies and mainstreaming

·         Land tenure and user rights

·         Land use planning and zoning

·         Institutional capacity

• Immediate action on demonstration activities and the like.

He stressed the importance of a transparent international framework for reporting and standards. In addition, it is necessary to mobilise international funds for capacity building in the following areas:

• Research and analysis
  • National drivers of deforestation
  • Solutions and strategies
  • Development of baselines
• Policy reforms
  • Reform of policy and legal framework
  • Land tenure reform
  • Measuring and monitoring capability
  • Institutional strengthening
• Investment in early action
  • Demonstration activities
  • Major practical programmes

Capacity building costs were estimated by the Eliasch Review at up to US$ 4 billion over the next 5 years. There are some mechanisms in place already. It is important that we have a common framework (with UN and WB as joint lead) and that funds and delivery bodies are coordinated.  Also we should make the best use of the funding that is already available.

Johan Eliasch finished his presentation by pointing out to some key recommendations of his repost. The objectives are realistic, he felt, but not necessarily easy to achieve. The key recommendations are:

• Halve deforestation by 2020 and make the global forest sector carbon neutral by 2030.
• Reducing emissions from deforestation should be fully included in any post-2012 deal at Copenhagen.
• Forest nations should develop their own strategies to combat deforestation, including establishing baselines, targets and effective governance and distribution of finance.
• Full participation of forest communities and indigenous peoples is needed if reforms are to be likely to succeed and benefit the poor.
• Access to finance from carbon markets as well as funding from other initiatives will be required.
• The international community should provide support for capacity building. Total capacity building costs are up to $4 billion over 5 years for 40 forest nations.

David Brown briefly commented on Mr. Eliasch's presentation, and passed on to Frances Seymour, posing the following questions: what are chances of generating political will and where we start here given the wide variety of national drivers of deforestation?

Francis Seymour began by presenting CIFOR. CIFOR’s research agenda has been increasingly dominated by the forest and climate change linkages. She then framed her remarks around what she called the "4 C's" relating forests and climate change:

1.       Forests as a cause of climate change

2.       Forest as a casualty of climate change (which she thinks is an underappreciated part of the debate)

3.       The co-benefits achieved by protecting forests

4.       The challenges that we will face in doing what is needed to be done.

1. Forest as a cause to climate change

Thanks in large part to the publication of the Stern review a couple of years ago, anybody interested in CC is now aware how big a part forests are of the climate change problem. 17-20% of global emissions are from deforestation and forest degradation. And we are also increasingly aware that forests have to be a large part of the solution. Anybody who's looked seriously at the problem of how to protect the world from catastrophic climate change (defined as trying to keep global warming below 2 degrees Celsius) has come to the conclusion that you can't do it without forests. Forests have to be part of the mix. And that's why one of the key issues to be negotiated on December in Copenhagen is how we bring forest into a post Kyoto regime. REDD (reducing emissions from deforestation and degradation) is essentially a mechanism for transferring finance from developed countries to developing countries to improve sustainable forest management.

Now how much money would be needed and the mechanisms necessary to generate and channel that finances is the main subject of the Eliasch Review and Ms. Seymour said she won't pretend to say more about that. But REDD offers enormous opportunities and also challenges.

There is an important and lesser known fact that a largely disproportional share of carbon emissions that comes from forest is from peat forests. This is about 10% of total global emissions. Carbon stocks in peats are particularly large because of the accumulated organic matter can reach up to a depth of 6 meters below the surface. So when a peat swamp is cleared, drained, the organic matter begins to dry out and decay and it is released out into the atmosphere. Peat lands are concentrated in southeast Asia, and this explains why Indonesia's annual forest emissions are about the same as Brazil, even though the area cleared each year is much smaller. So stopping development of peat lands is a global priority, from a perspective of climate change.

A myth is sometimes propagated, that since mature forests are no longer sequestering large amounts of carbon, it would be better to cut them down and plant new trees, so these new trees will soak up new carbon. This is wrong because the initial release of carbon from clearing the forests is the most significant from the point of view of the atmosphere. So it's much more effective and efficient to keep standing forests intact. Afforestation and reforestation should certainly be part of the mix and part of the solution, as proposed by the Eliasch review, but they cannot substitute reducing emissions from deforestation and degradation, and they certainly can’t come in the expense of standing forests. This myth usually comes together with biofuel development, which sometimes is put forward as a climate friendly approach. One study has estimated that if you clear the peat forest and plant palm oil, and use the palm oil as a substitute for fossil fuels, through biodiesel, it would take 840 years to repay the carbon debt of that emission release to the atmosphere.

2. Forest as a casualty of climate change

In addition to being a cause of climate change, forests are also a casualty of climate change. Forests are vulnerable to the extreme weather that is likely to become more common due to climate change. Forests are also vulnerable to increases in temperature and rainfall variability, and this may mean more droughts, more forest fires. And damaged fragmented forests are more vulnerable to those pressures that the intact forest.

A forest could be lost completely if climate change progresses beyond a certain threshold. A warmer, drier climate could trigger a positive feedback loop in which forest become drier, become more susceptible to fire, burn, become less able to sequester emissions, more emissions released into the atmosphere, accelerating climate change, etc.

Some models suggest that a significant proportion of the carbon rich Amazon rainforest could shift and become a carbon-poor savannah if global warming increases even a little bit more than where we are now. This would be catastrophic for the global climate but it would specially devastating for Brazil, because the rain that waters all the rich cropland in southern Brazil originates in or is generated by the rainforest.

We need to dramatically toughen up targets to reduce emissions overall, and we need to do it now.

2. Co-benefits achieved by protecting forests

If we are successful in reducing deforestation and degradation, what else do we get? We would help developing countries and poor communities to adapt to climate change. Intact natural forest can help buffer the effects of climate change, for example with the hydrological services they provide. By investing in mitigation, we can also get adaptation.

A second co-benefit is conservation of biodiversity. Tropical forests are ecosystems that are particularly wealthy in biological wealth. The island of Borneo is 1% of the world terrestrial area, and 6% of the species richness, in flowers, birds and animals. if REDD finance can provide the revenue stream that could make it possible to keep forests as forests rather than converting them into monoculture agriculture, this would be a huge win for both the climate and wildlife conservation. Biodiversity is also important for the cultural integrity of the indigenous communities that live in the forest.

The third co-benefit, perhaps the most important one, is poverty reduction. More than a million people live in the world forests and depend on them not just for subsistence, but also to generate cash income. Forests are also very important safety nets in times of economic stress. If REDD payments are channelled to forest communities to compensate for their forest stewardship, such payments could be an instrument of poverty reduction as well.

One more speculative potential co-benefit of REDD is that it could catalyse improvements in forest governance, strengthening forest tenure, increase transparency and accountability of forestry institutions, and ensure much greater public information about the forestry sector.

4. Challenges that we will face in doing what is needed to be done.

If REDD is such a great idea, why would anyone be against it? Because there are many challenges, such as negotiating a global deal that includes sufficiently large emissions reduction overall and sufficient finance for REDD so it would be effective as well as equitable. There is also a long list of problems: the scope and scale of REDD, the additionality issue, the permanence issue, the leakage issue, and how to mobilize the necessary finance. Also how the finance allocation is going to be done, not just within countries, but between countries, especially given that we know that there are a lot of countries that private markets do not want to go to. Seymour then focused on the challenges of the context of national implementation:

1. Monitoring and assessment issues. There is a lot of capacity building that needs to be done. It is possible now to measure deforestation at the national scale, and while it's more difficult to measure degradation, the technologies are on the near horizon in the foreseeable future.
2. To ensure that efforts to reduce deforestation and degradation are actually effected. We already know a lot about the underlying drivers of deforestation and degradation, and the implications of it and what needs to be done. However, the causes are fundamental market failures, fundamental governance failures and fundamental policy failures that are going to be extremely difficult to overcome.
3. To ensure that REDD efforts are equitable. There are three main issues of concern of how REDD might affect the poor:
   1. It will not be possible to simultaneously maximize the efficiency of REDD payments for emissions reductions and its effectiveness as a poverty reduction tool. There will be trade-offs between efficiency and equity.

b.      It is possible that policies implemented in the name of REDD can close off pathways out of poverty for rural communities.

c.       Many advocacy groups are rightly concerned that REDD could make the world's poorest and most vulnerable communities dramatically worse off by precipitating human rights violations. REDD might create an incentive for elite capture of the benefits, ignoring the rights of indigenous peoples.

Frances Seymour concluded by saying that yes, these are serious challenges, but we mustn't let these challenges paralyse us. REDD poses many risks, but if we move forward with our eyes wide open, these risks can be managed. And in particular, significant early investment in capacity building in forest countries as recommended by the Eliasch Review can help build the domestic institutions that will ensure that REDD is undertaken in a way that is transparent, inclusive and accountable. Such investment, at the same time, can provide a political signal that developed countries are serious about doing their part to help. The biggest risk of all is no action. We have to remember that climate change will affect the poorest countries and the poorest people first and most severely. To avoid catastrophic climate change, forests have to be part of the solution.

The questions from the floor/discussion centred on a number of issues:

• Which financial mechanisms are the more promising?
• The feasibility of including forest emissions in carbon markets. Funding mechanisms need to be transparent, accountable, and responsible. Markets allow much better transparency, and fund flowing where it is more efficient. Markets are also the only way to provide stability and long-term flows of funding, additional to ODA.
• The relationship between business and poor communities?
• Concerns about carbon prices (noting that they can be extremely low). We need severe cuts in the emissions and ambitious targets in order to keep carbon prices up.
• Institutional challenges, the need for institution innovation.
• Question on the evidence suggesting that we have already passed the tipping point of climate stability. Uncertainty of concentration of GHG in the atmosphere and climate change science.
• Indigenous Rights: a fundamental issue – it’s very important to remember that questions concerning the amount and sources of funding do not affect the centrality of addressing indigenous peoples’ needs and rights.

The meeting closed at 2.15 pm with thanks to all three speakers and the audience.