Cessation of deforestation key to reduce GHG emission

Alan Oxley ,  Melbourne   |  Thu, 03/19/2009 3:00 PM  |  Opinion

That Hilary Clinton made her first visit as Secretary of State to Southeast Asia is a good sign of renewed US interest in the region. It took a clear second place to the Middle East under the Bush Administrations. But things may not be so smooth, particularly with the relationship with Indonesia, if the Obama Administration makes forestry a leading issue, in the way some want.

There is pressure on it to embrace the ambitions of the World Wide Fund for Nature (WWF) and Greenpeace to embed cessation of deforestation as a key means to reduce emission of greenhouse gases in the new global strategy to tackle climate change, negotiations for which began in Bali in December 2007.

Recently in Washington, DC everybody who was anybody in the environmental movement appeared at an event sponsored by AD Partners. "AD" stands for "Avoided Deforestation". The event's purpose was to encourage the Obama Administration to make cessation of deforestation a leading part its climate change strategy.

The World Bank generally goes along with this. It has sponsored for some time the idea that in return for halting deforestation, developing countries would be allowed to create credits for the carbon stored and sell that into the global emissions trading scheme envisaged in the Kyoto Protocol.

Bank forestry officials have heralded this as the ultimate "win/win" - for the environment (forests are protected) and the economy (payments are received from selling carbon credits for trees left in the ground). It has set up a fund to finance carbon credits and trading and has received pledges of around US$700 million (from Norway, UK and Australia).

As an organization that appropriately lectures governments about not spending money they do not have, it is strange that the World Bank is now raising money for a program that will not work.

Consider the following: The prospect of establishing a global system to trade carbon credits is very low. China, India and other developing countries have made it very clear they will not endorse such a plan in the climate change negotiations.

It is also unlikely that this program will provide enough revenue to compensate for the loss of economic activity by stopping deforestation. Trees are cleared to establish commercial business, fund provision of food provide and shelter as well as to provide fuel.

It is very unlikely sales of credits would equal the value of that economic activity.

And the biggest prospective buyer of credits, the EU's regional emissions trading scheme, will not be open to large numbers of de-forestation carbon credits, according to the European Commission.

Why? Environmental groups like WWF and Greenpeace refuse to allow large quantities of emission offsets from forests - it reduces pressure on energy producers to switch away from coal and oil.

Tropical forest nations like Indonesia and Brazil, as well as other developing countries like India, want the Bank to widen its focus to foster activity that will increase carbon sinks. This would expand plantations and natural forestry, sustainably managed, enabling developing countries to promote much greater absorption of carbon dioxide than by merely stopping deforestation and encourage economically self-sustaining activity. That is the real "win/win".

To do this, the World Bank will have to change policy. It will have to scrap the policy adopted in 1991 to support only plantation forestry in tropical countries that did not supplant natural forest. It is a self-admitted dud: Developing countries would not go along. Second it would have to strike policy independently of WWF.

The Bank has bound itself to support sustainable forestry only as endorsed by WWF. This is a straightjacket. The WWF policy is little different to the Bank's 1991 policy and it plays politics with its principal tool to determine what is "sustainably managed forestry" and what is not. That tool is the Forest Stewardship Council (FSC).

The Council sets standards to enable forest operators to demonstrate their forestry is sustainable: It regrows and general environmental values are respected.

The FSC model, however, does not work in most developing countries because it does not recognize the need or right of developing countries to use forestry for economic development. For example one FSC norm is not to certify plantations developed on degraded forest land after 1994.

WWF actions last year made FSC even more unattractive to forestry companies in the developing world. WWF pressured FSC to cease certifying products of the Indonesian company, Asian Pulp and Paper (APP), despite affirmation over several years by independent, Swiss-based auditor, SGS, that APP products met FSC standards.

Recently, FSC made a similar ruling against APRIL, Indonesia's other major pulp and paper company, although it did not declare APRIL blacklisted as it has APP.

Both companies have active programs to achieve sustainability and protect biodiversity.

It seems WWF will only collaborate with companies on its terms. It had an agreement with APP a few years ago, then withdrew and contributed to a slew of attacks by NGOs against APP for harming the environment. APRIL is now trying to work with WWF. They are in for trouble if history is any guide.

The credibility of FSC certification is falling. Friends of the Earth is a member of FSC, but its UK arm now refuses to recommend it.

The World Rainforest Movement is actively campaigning against FSC standards. Certification is expensive and the principal value to business was protection from such attacks. WWF can no longer provide that and has itself become its own source of high political risk for any company with whom WWF has a gripe.

It seems obvious that WWF's goal is not to bring forest operators, business, Governments, NGOs and development institutions together to develop an effective strategy to balance economic development with the environment.

Instead it aims to turn the new global program to tackle climate change into the global convention to control forestry after which it has always hankered and for which the world's governments have not seen the need.

To build a new cooperative relationship with the Indonesian Government, which has contained illegal logging and is imposing greater controls to protect forest biodiversity, the best strategy for the Obama Administration would be to stare down those in Washington DC who consider deforestation a fashionable subject for social fund raising and promote programs that produce a better strategy on climate change and economic growth in countries like Indonesia. It should encourage the World Bank to do the same.

The writer is Chairman of World Growth.

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