Memorandum submitted by the Timber Trade
Federation
TIMBER TRADE
FEDERATION UPDATE
Since the EAC 2006 report the UK TTF have now
made environmental due diligence mandatory for all members and
are now in the process of fully implementing this. All members
are either expected to implement the Responsible Purchasing Policy
or an equivalent system to meet the requirements of the TTF's
Environmental Code of Practice.
Since the EAC report the Code of Conduct has
also been strengthened. The TTF itself, if given due cause, can
instigate an investigation into any member, without relying on
a complaint from another member. The UK TTF remains committed
to the principle of introducing EU legislation to address illegal
logging and set a fair, level playing field in the market place.
The TTF continues to work with the financial
support of the Department for International Development to support
activities in raising the awareness of illegal logging and initiating
business to business improvements. These funds have been invaluable
to our work. The funds have supported market reports demonstrating
the increased purchases of certified timber products. Several
roadshows in producing countries have brought about direct improvements
with suppliers, greater networking with other industry federations,
as well as buyers increasing their commitment to act responsibly.
EXECUTIVE SUMMARY
Forests play important roles for local communities,
biodiversity as well as carbon storage. The careful management
of forests can play a vital role in mitigating climate change
in a number of ways; reducing emissions from deforestation and
forest degradation, enhancing the sequestration rate in existing
and new forests, providing wood fuels as a substitute for fossil
fuels, and wood products as a substitute for more energy-intensive
materials. The introduction of a carbon fund that is dedicated
to forestry projects is a welcomed addition but incentives to
implement such projects must be reviewed. Additionally ensuring
the funds are targeted at the people who are in greatest need
will be the challenge under the proposed initiatives such as Reduced
Emissions from Deforestation and Forest Degradation (REDD). Carbon
funds are one part of the jigsaw, consequently it must work in
conjunction with other national forest programmes and initiatives
such as FLEGT as well as existing certification schemes to ensure
sustainable forest management that benefits local communities
and biodiversity.
1. The role financial mechanisms might have
in helping to address emissions from land use change
Forests can play a vital role in a number of
ways; reducing emissions from deforestation and forest degradation,
enhancing the sequestration rate in existing and new forests,
providing wood fuels as a substitute for fossil fuels, and wood
products as a substitute for more energy-intensive materials.
The causes of deforestation and degradation are due to several
reasons; illegal logging, exploitation, poor governance and conversion.
Forests play important roles for local communities and biodiversity
as well as carbon storage.
Kyoto introduced Clean Development Mechanisms
(CDM) and Joint implementation (JI). However, forestry has yet
to play a leading role within these mechanisms but could provide
a cost effective mechanism for mitigating climate change. The
Land Use, Land Use Change and Forestry (LULUCF) initiative has
had little take up, partly due to the perceived restrictive CDM
requirements. The carbon storage function of forests is not accounted
for in the first commitment period of Kyoto. We hope that in the
post 2012 arrangements carbon credits from the LULUCF and/or Reduced
Emissions from Deforestation and Forest Degradation (REDD) will
be included in the EU Emissions Trading System (ETS). However
forestry has found favour in the rapidly growing voluntary carbon
market.
Certification coupled with various market drivers
and donor programmes have had limited success in tropical countries.
Carbon markets can add a further economic incentive for producer
countries to protect and responsibly manage forests and thus reverse
deforestation and degradation. In some countries poor governance
is a factor contributing to deforestation, particularly illegally
driven land conversion activities. Therefore carbon programmes
alone are not the complete answer. Any carbon market initiative
must ultimately halt deforestation and degradation but also complement
other national and international forestry programmes as well as
policies such as FLEGT that help address the other causes of deforestation
such as poor governance and law enforcement.
2. The environmental and social risks and
benefits of using such financial mechanisms
Environmental and social benefits are a clear
objective of carbon finance funds. Whether the funds have been
successful in achieving this is perhaps too early to determine;
a review needs to be conducted.
3. The use of land use change credits in carbon
markets and in meeting emission targets
Measures that prevent changes of land use from
forests to agricultural crops such as biofuels and palm oil plantations,
as well as incentives for afforestation and reforestation are
welcomed. It is important to value forests which have wider environmental
and social benefits over other land uses. As yet carbon credits
are not included in the EU ETS, this issue needs to be reviewed
as its exclusion has lead to a lack of investment in forestry
projects (see comments under 1.0).
4. The World Bank's Forest Carbon Partnership
Fund
To have a carbon fund dedicated to forestry
is a welcome initiative. However lessons learnt from the operation
of the BioCarbon Fund and LULUCF must be taken on board to ensure
its success. The fund promotes the concept of REDD which puts
a value on the carbon in standing trees. The challenge will be
to ensure funds are distributed to those that desperately need
them and that works with programmes such as FLEGT and other national
efforts to improve governance.
5. The role of technologies such as remote
sensing in the verification of land use change credits
Technology that could monitor land use changes
would be helpful to ensuring that the carbon markets are successful
and claims are verified.
6. The success or otherwise of Government
efforts in reducing emissions from international land use change
No Comment.
7. The Congo Basin Forest Fund
The fund has common objectives with carbon markets
in terms of addressing deforestation. Therefore it should be a
complementary programme.
8. The interaction of carbon finance mechanisms
with the timber trade
Carbon finance mechanisms should support implementation
of sustainable forest management. The projects funded under the
carbon finance schemes should be complementary to existing policies,
programmes and certification schemes. Certification schemes are
the accepted market label to provide assurance that the timber
is sourced from well-managed forests. Therefore a carbon market
which supports the implementation of certification, particularly
in countries where take up and progress is slow would be an additional
stimulus to enable suppliers to meet changing market requirements.
With the increasing need to consider the carbon
footprint of products, it is necessary to internalise the price
of carbon into the cost base of manufactured goods. The timber
trade would welcome this as the production of wood is largely
a carbon-neutral process. Therefore there would be no cost implications.
Intensive carbon using processes will be at a price disadvantage
thereby incentivising environmentally friendly purchasing.
9. Government progress on tackling illegal
timber since the EAC 2006 Report on sustainable timber
The UK is the 4th largest net importer in the
world. Our influence on the world's forests is, and has the potential
to be quite powerful. The UK Government's timber procurement policy
was therefore a welcome introduction. The policy has proven to
be a significant incentive for producers even though implementation
of the policy has been slow.
The Government, post 2009 have changed their
policy to restrict timber purchases to those from either sustainable
or FLEGT licensed sources. The recently published timber guidance
note does offer some opportunity to provide other evidence of
legality and/or sustainability. However, the Construction report
conducted by CPET suggests that the guidance note is not widely
read or circulated. Therefore the perception is that exclusion
of all other evidence of legality is now likely to act as a disincentive
for producers who are trying to do the right thing. Not every
country is eligible for FLEGT eg US, similarly not every country
sees the VPA process as politically popular eg Brazil. Even the
EU themselves have indicated that other forms of evidence should
be allowed as well as FLEGT licensed timber.
The UK Government's commitment to FLEGT, and
the resources dedicated to maintaining CPET are to be commended.
Where necessary the TTF has supported both Defra and Dfid during
VPA negotiations and given advice on the practical implementation
of legislation.
10. Government sustainable procurement of
forest products
A report conducted by CPET concluded that implementation
of the policy was patchy within the government construction sector,
the largest user of timber. Clearly communication is a major task
and timber is not a major priority, particularly on construction
sites. However anecdotal evidence from the trade has shown that
demand for legal and sustainable timber is increasing.
The TTF have supported Defra in their efforts
to increase awareness and also to encourage adoption of the policy
by Local Authorities. Although not mandated by the central government
policy, Local Authorities account for a significant percentage
of total timber procurement in the UK. A recent Ends Report (respected
environmental journal) investigation revealed that 6 out of 10
local authorities do not even have a policy, let alone operational
procedures to check that the timber purchased is legal and/or
sustainable.
11. The success or otherwise of the EU Forest
Law Enforcement, Governance and Trade (FLEGT) Action plan, and
Government support for it
FLEGT is an important mechanism to address several
issues, illegal logging, deforestation and poor governance/development
agendas. The UK Government has demonstrated strong support for
the programme. As the action plan is aimed at both producers and
consumers, progress is steadily increasing as each side implement
changes. However FLEGT licensed timber, as predicted, is not available.
Politically the process is perhaps making progress; we now need
to see on the ground successes.
October 2008
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