House of Commons - Reducing greenhouse gas emissions from deforestation: No hope without forests

Reducing greenhouse gas emissions from deforestation: No hope without forests - Environmental Audit Committee Contents

4 Managing demand

41. The UK must play its part in ending the economic incentives for deforestation and increasing those that promote sustainable land use. The Joint Nature Conservation Committee (JNCC), the Government's statutory adviser on national and international nature conservation, recently found that UK investments in the forestry, fisheries and agriculture sectors are "highly significant from an ecosystem impact perspective".[64] The JNCC plans to provide further analysis of the data. The Government's Chief Scientific Adviser has launched a UK Foresight Programme project on Global Food and Farming Futures to take a "global view of the food system; considering issues of demand, production and supply as well as broader environmental issues".[65] The impact of trade flows on deforestation rates has been recognised in the European Commission's Communication on deforestation, which stated that the Commission would assess the impact of international trade policy and agreements and "study[…] the impact of EU consumption of imported food and non-food commodities (e.g. meat, soy beans, palm oil, and metal ores) that are likely to contribute to deforestation. This could lead to considering policy options to reduce this impact".[66]

42. We welcome the Joint Nature Conservation Committee's work on the UK's global impact on biodiversity. This, combined with the Foresight Project on Global Food and Farming Futures, must be used by the Government to identify how to reduce the deforestation that results directly and indirectly from UK demand for commodities. This work should consider the consumption of all imported commodities that affect deforestation. The Government should take account of and engage with work being done on these issues by the European Commission.

43. Below we explore some of the policy measures that the Government should use to mitigate the impact of UK consumption of globally traded commodities.

Agricultural commodities

a) Global agriculture reform

44. There is a relationship between agricultural commodity demand and the rate of forest clearance. The Eliasch Review cautioned that improvements in agricultural productivity could increase profitability and "pressure to deforest could increase in the areas where the more intense practices are applied".[67] Responses to the food crisis must take account of the need to protect forests. Demand for food is expected to increase dramatically in future and must be met in ways that do not increase pressure on forests. Failure to tackle this issue will raise substantially the cost of reducing emissions from deforestation and climate change mitigation more widely.[68]

45. Recent agricultural commodity price increases, and related social impacts, have led to pressure to improve global food security and reform the global agriculture sector. Such reform must not undermine efforts to halt deforestation. Improved food security and environmental protection can be achieved in harmony. Agricultural productivity in many regions can be increased and more food produced on existing agricultural land. 50-70 million hectares of pasture land in Brazil could be released for crop production by intensifying the very low density of cattle per hectare in parts of the country.[69] Reforms to global agriculture, such as a move away from feeding cereals to livestock, new technology and the removal of damaging subsidies, could enable the world to "feed the entire projected population growth alone by becoming more efficient while also ensuring the survival of wild animals, birds and fish on this planet".[70]

46. The Government has created the Council of Food Policy Advisors to advise on food security, and has commissioned reports on food security that bring these issues together.[71] Internationally, the UN's High-Level Task Force (HLTF) on the Global Food Security Crisis, established in April 2008, has drafted a Comprehensive Framework for Action (CFA). In it UN bodies and other relevant international organisations set out their view of what the response to global food security issues should be. It stressed the need to remove damaging agricultural subsidies, the need to reassess biofuel policies, and the need to boost smallholder productivity.[72] The G8 nations have agreed to support a Global Partnership on Agriculture and Food to coordinate and implement international efforts on food security and other actions identified by the CFA. A joint statement by G8 leaders said that this partnership "could provide efficient and effective support for country-led processes and institutions and for local leadership, draw on the expertise in existing international organizations and, in particular, ensure monitoring and assessment on progress". As part of this partnership, "a global network of high-level experts on food and agriculture would provide science-based analysis, and highlight needs and future risks".[73] The G8 leaders said that they would:

Ensure the compatibility of policies for the sustainable production and use of biofuels with food security and accelerate development and commercialization of sustainable second-generation biofuels from non-food plant materials and inedible biomass; in this regard, we will work together with other relevant stakeholders to develop science-based benchmarks and indicators for biofuel production and use.[74]

47. The Government believes that there is a "solid donor consensus on the need for more and better support for food security, social protection and agricultural development and for a global mechanism to help deliver a comprehensive and co-ordinated international response to hunger".[75]

48. There is a direct link between agricultural commodity prices and the rate of forest clearance. If agricultural commodity prices rise inexorably, the cost of reducing emissions from deforestation will also increase as it will cost more to prevent forests from being converted to farmland. Failure to reform the global agricultural system will increase the total cost of climate change mitigation. A response to the food crisis that leads to deforestation will exacerbate climate change.

49. A fundamental reassessment of the way in which the global agricultural system functions is needed. It is critically important that the Government's response to the global food crisis includes strong support for a global change in sustainable land use and an end to deforestation.

50. While we welcome the Government and G8 response to the global food crisis and its call for a Global Partnership on Agriculture and Food, we are very concerned that the G8 has failed to address the need for sustainable production of agricultural commodities. It failed to act on agricultural subsidies, biofuel subsidies and other damaging trade-distorting measures. This suggests that the G8 countries are not committed to solving the developing ecological and food security crisis in a sustainable way.

Sustainability standards for agricultural commodities

51. We concluded in 2006 that there was a need to develop sustainability indicators for globally traded commodities "to lead [to] more sustainable trade".[76] At the time the Government rejected this argument, citing political difficulties in achieving such standards, but following the rush for biofuels the political debate has evolved. Now that the environmental risks of the policy have been recognised, there has been a concerted effort to create standards for commodities used as biofuels.

52. As we noted in our 2008 report into biofuels, "an interesting environmental benefit that might come from a sustainable biofuels market could be the better regulation of all internationally traded agricultural commodities". We argued that the potential rewards associated with a sustainable biofuels market in the EU could "create economic conditions which would assist in securing international sustainability standards for agricultural products more widely". We also recognised that removing damaging agricultural subsidies in the EU would facilitate a global agreement on such standards.[77]

53. Recent figures from the Renewable Fuels Agency indicate that 20 per cent of transport biofuels used in the UK meet environmental sustainability standards, falling short of the Government's target for 30 per cent of biofuels to meet such standards over the year.[78] Nevertheless, the fact that some companies are meeting sustainability standards gives us hope that such standards can successfully be created and applied.

54. Defra research is looking at the impact of various agricultural commodities on deforestation. The Government is also "stepping up engagement with South East Asian governments and other stakeholders who have an interest in this, including the round table on sustainable palm oil".[79] The Defra Minister thought that working on the sustainability of biofuels might be a way to improve the sustainability of commodities more widely, but told us that the Government had "not come to firm conclusions on [this]".[80]

55. Charlie Kronick, of Greenpeace, and Robin Webster, of Friends of the Earth, both thought that there was an important role for mandatory sustainability standards in preventing land use change but that these would need to be part of wider action otherwise two markets would simply develop—one for sustainable commodities and one for unsustainable commodities.[81]

56. The Renewables Obligation requires electricity suppliers to provide a proportion of their electricity from renewable sources. Under the Obligation, suppliers are granted a Renewables Obligation Certificate (ROC) for each megawatt hour (MWh) of eligible renewable output generated.[82] 3 million ROCs were issued for output generated using biomass or energy crops in 2007-08, some 35 per cent of the total issued. As from 1 April 2009, electricity generators will be required to report on the sustainability of the biomass they use, although this is mainly an information gathering exercise. The earliest tighter controls might be introduced would be 2010.[83] In the meantime this policy is adding to greenhouse gas emissions by stimulating deforestation.

57. We are concerned that the Renewable Transport Fuels Obligation and the Renewables Obligation are stimulating deforestation. Potentially damaging biofuels should not be promoted until the technology improves, robust mechanisms to prevent damaging land use change are introduced and international sustainability standards are agreed. The Government must ensure its policies do not stimulate or accelerate deforestation.

58. It is wrong to apply sustainability standards to commodities used for biofuels but not for food and we recommend that the Government develops sustainability standards for all agricultural commodities. The Government should work on ending damaging agricultural subsidies in the EU and other developed countries so that standards can be agreed. A mechanism that rewards countries for not converting forests to agricultural use will make it possible to reach international agreement on sustainability standards.

The timber trade

59. The UK has a large impact on the global timber trade—it is the world's fifth largest importer of crude wood products, and the third largest importer of paper products. We last looked at the UK timber trade in 2006. We found that illegal logging and the international trade in illegally logged timber leads to environmental damage and undermines efforts to manage forests sustainably. It also undermines the work done on improving governance in rainforest nations. We recommended that the Government introduce a ban on illegal timber imports.[84]

60. We asked witnesses whether the situation had improved since we last looked at this issue. WWF told us that, while the Government has been "pro-active" in supporting supply-side measures through the EU's Forest Law Enforcement, Governance and Trade (FLEGT) Programme, there "has been no tangible progress on tackling illegal timber since the [last] EAC report" because not enough had been done to tackle demand.[85] Chatham House found evidence to suggest that "implementation is lagging behind commitment".[86] WWF claimed that roughly 7.5 per cent of UK timber imports are from illegal sources, making the UK the world's third largest importer of illegal timber and Europe's largest,[87] although these figures are difficult to verify given the covert nature of illegal logging.[88]

61. Three years ago we called for legislation to ban imports of illegal timber. No ban was introduced and illegal timber remains an unacceptable part of the UK timber trade; it is possible that the UK is one of the world's largest importers of illegal timber and illegal timber products. This failure to ban illegal timber means that the UK is undermining efforts to improve forest governance and contributing to deforestation and its associated emissions. The Government can act on this demand in two key ways—immediately through government procurement of sustainable and legal products and in the longer-term by enforcing a requirement that timber products are imported only from legal and sustainable sources.

PUBLIC SECTOR PROCUREMENT

62. Government procurement policies can quickly develop a large market for sustainable and legal timber. When we last looked at this issue we commended the Government on the "significant progress" it had made in improving timber procurement, although we had some concerns about coverage and implementation of the policy.[89] From 1 April 2009 the Government has required all timber and timber products used on the Government estate to be from legal and sustainable sources or licensed under the EU Forest Law Enforcement, Governance and Trade initiative.[90] It also has a key target, "strongly supported by Ministers", to encourage more local authorities to adopt the policy.[91]

63. Chatham House told us that public sector procurement policies aimed at excluding illegal and unsustainable timber products were already proving valuable. Duncan Brack, from Chatham House, thought that the establishment of a central body to oversee central government timber procurement policy, the Central Point of Expertise on Timber (CPET), was "proving successful".[92] But progress in other areas was limited; he pointed out that local authority action on this issue remains "limited and patchwork".[93] A recent report found that six out of ten local authorities do not have a timber procurement policy.[94] Greenpeace UK thought that a lack of monitoring and enforcement of government timber procurement rules meant that illegal timber and unsustainable timber "almost certainly continues to find its way onto Government construction sites".[95] WWF was particularly critical of policy implementation:

There has been no tangible progress on sustainable procurement of forest products by UK government departments as a whole. [T]his is down to lack of practical action to address the problem and inadequate resourcing to meet sustainable procurement policy commitments. There is a gap between administrative and political agendas, and apart from the CPET […] mechanism, which has struggled to deliver change or appropriate engagement; no specific efforts have been made to bridge this gap. It is not a government priority at an operational level and does not specifically figure in local authority goals for action on sustainability.[96]

64. A review conducted by CPET in 2008 found that implementation of policy was still "incomplete", and that awareness of procurement policy amongst government personnel was "relatively limited".[97] It recommended that the Government consider the introduction of a monitoring system, possibly with spot-checks, to improve compliance, and that it should seek to encourage local authorities to adopt a procurement policy.[98] It also pointed out that "there are no implications for those that fail to deliver the policy, even where lack of compliance is identified [resulting] in very limited incentives for companies to strive to adhere to the timber procurement policy".[99]

65. Following CPET's review, Defra "started to pilot new monitoring and reporting systems to track timber purchases within the department". It told us that its aim is "to share successful approaches with Whitehall partners in order to develop a new system for recording and reporting volumes of timber purchased throughout central government over the next year".[100] It stressed that it:

[…] is determined to continue improving its performance on purchasing sustainably produced forest products, moving to fully sustainable sources and encouraging others to do the same. The information we have indicates that implementation remains patchy. Some departments and agencies are ahead of others but it is clear that there has been a significant move over the last 12-18 months and growing commitment to ensure full implementation. The achievements made will be used to inform and develop sustainable procurement practice more generally, including the recently established Centre of Excellence for Sustainable Procurement (CESP).[101]

66. The Government has a policy framework to ensure the procurement of legal and sustainable timber by central government but it has been poorly enforced. We welcome Defra's development of a timber monitoring and tracking system to address this problem; an effective system is needed across Whitehall at the earliest opportunity. The Government should consider introducing penalties to motivate departments and companies to implement policy. The Government must also insist that local authorities and the wider public sector adopt timber procurement policies.

BEYOND THE PUBLIC SECTOR

67. Chatham House said the "vast bulk of timber illegally harvested […] is also traded and consumed outside the remit of the new public procurement policies, supply chain controls of governments, and companies in sensitive western markets[,] reducing their potential impact".[102] Additional measures are therefore required to address imports of illegal timber more widely. The European Commission has recognised this in its proposals for a system of due diligence:

This proposed regulation asks operators to take concrete steps to minimise the risk of putting illegally harvested timber and timber products on the EU market. Operators will use the due diligence system, thus enabling them to ascertain the legality of the products […] The proposed regulation will make it an obligation for traders to identify the country of origin of their timber, and ensure that timber they sell has been harvested according to the relevant laws of that country.[103]

68. Duncan Brack, from Chatham House, thought that the European Commission's due diligence proposal would help to reduce illegal timber imports, but only if improvements were made to the draft regulation; it would fail in its current form. He pointed out that the rules would only apply at the port of entry into the EU; once a timber shipment had been granted legal status by a Member State, there would be no further checks applied to the goods. He argued that if a Member State fails to introduce effective customs controls, it could become a channel for illegal timber to enter into the EU.[104] The Environmental Investigation Agency pointed out that the Commission's proposal focuses on "operator behaviour", "rather than the actual problem [of] illegal timber", and that the proposal "does not prohibit illegal timber, meaning illegal timber will remain legal in the EU market if the regulation is passed without amendment".[105] It also thought that there could be large variations between countries in the way the proposals could be applied, increasing the risk of illegal imports continuing.[106] Friends of the Earth welcomed the due diligence proposal but thought that clear sanctions needed to be applied:

The proposal should […] be amended to explicitly make trading in illegal timber and timber products or the placing of these on the market a punishable offence. It should specify the different levels of offence (e.g. trading or marketing of illegal timber products, failure to put in place a due diligence system, insufficient implementation or weak due diligence systems) and spell out strong deterrent sanctions.[107]

69. The European Parliament's Committee on Environment, Public Health and Food Safety has made recommendations to strengthen the proposal "including the introduction of a requirement that operators place or make available on the market only legally harvested timber or timber products, at all points in Community market supply chains: in effect a prohibition on selling illegal products".[108] The amendments also proposed increasing regulatory oversight by the Commission. On these proposals Defra commented:

[…] we are currently minded to seek the inclusion of a prohibition on placing illegally harvested timber on the Community market. We believe that making it an offence to place illegally harvested timber on the Community market could strengthen the Regulation, and send a clear message to operators that such activity was no longer acceptable, creating a level playing field for importers across the EU. It would also enable enforcement authorities to take action where evidence of the trade in illegal timber had been brought to their attention. However, the UK believes that such a prohibition should apply only to operators who first place timber or timber products on the Community market, and that the onus on proving such an offence should remain with the authorities.[109]

70. We support the Government's desire to strengthen the current EU proposals on control of the illegal timber trade. The Government must work with the EU to make it an offence to place illegal timber and timber products onto the market and to introduce robust sanctions to enforce these rules.

64 Joint Nature Conservation Committee, The biodiversity footprint of UK Foreign Direct Investment, Spring 2009 Back

65 "Global Food and Farming Futures", Foresight, May 2009, www.foresight.gov.uk Back

66 European Commission Communication, Addressing the challenges of deforestation and forest degradation to tackle climate change and biodiversity loss, 17 October 2008 Back

67 The Eliasch Review, Climate change: Financing Global Forests, October 2008, p 54 Back

68 McKinsey & Company, Pathways to a Low-Carbon Economy, p121 Back

69 Renewable Fuels Agency, The Gallagher Review of the indirect effects of biofuels production, July 2008, p 37 Back

70 "'Green revolution' can ensure enough food for entire world-UN environment agency", United Nations Environment Programme, 17 February 2009, www.un.org Back

71 "Food Security: DEFRA Discussions", DEFRA, May 2009, www.defra.gov.uk Back

72 High-Level Task Force on the Global Food security Crisis, Comprehensive Framework for Action, July 2008 Back

73 "G8 Leaders Statement on Global Food Security", Global Donor Platform for Rural Development, 8 July 2008, www.donorplatform.org Back

74 Ibid Back

75 HC Deb, 12 February 2009, col 2305W Back