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Memorandum submitted by Friends of the Earth (FOR13) 1. Friends of the Earth & Forests: Friends of the Earth England Wales and Northern Ireland has identified climate change and the loss of biodiversity as the two greatest environmental threats we face, standing out in scope, urgency and because of the amount of people they affect. Forest protection represents a major part of our work to address both these environmental threats; since deforestation, especially in developing countries, destroys vital biodiversity and is responsible for massive emissions of greenhouse gases - roughly 18 per cent of emissions worldwide. 2. Friends of the Earth is part of an international federation of 70 national member groups across the globe. Friends of the Earth member groups work with local communities to preserve forests and uphold community and indigenous rights to manage forest resources and secure sustainable livelihoods. Members identify and implement both traditional and innovative practices to restore and protect native species, secure access for communities and monitor protected areas. Members develop and support alternative income generation projects, such as the small-scale trade in non-timber forest products, that ensure sustainable livelihoods that do not endanger biodiversity.
Introduction 3. We believe that the most effective way we can address deforestation, to prevent dangerous climate change, conserve biodiversity and safeguard the sustainable use of forests by local communities and indigenous peoples, is through political change. There are three interlinked aspects to this. 4. Firstly, we need to secure a global agreement that addresses forest and climate objectives in a coherent manner. Any agreement within the UN Framework Convention on Climate Change should have the explicit support of; the UN Convention on Biodiversity (CBD) Expanded Program of Work on Forest Biodiversity; be fully in line with the UN Declaration on the Rights of Indigenous Peoples (UNDRIP); and be integrated with international and national implementation policies under these instruments. 5. Secondly, we need policy changes to reduce the economic pressure to clear forests and especially the demand for agricultural products such as timber, pulp, palm oil and soy. Studies of the causes of deforestation have identified land clearance for agriculture as a factor in over 90 per cent of cases[1]. Global assessments suggest that the demand for agricultural land could lead to the clearance by 2030 of an area of land equivalent to all the farmland in Canada, the United States and Mexico combined[2]. 6. Thirdly, we need improvements to forest governance in developing countries, especially to protect and enhance the rights of communities who depend on the forest and to help these communities to use their rights to protect it.
The role financial mechanisms might have in helping to address emissions from land use change 7. Financial mechanisms to address emissions from land use change are often assumed to be synonymous with carbon markets, but this is not the case. It is, in fact, a contentious point within the current UNFCCC post-2012 debate, with significant variations in positions between the principle countries engaged in REDD negotiations within the UNFCCC. 8. The issue of whether or not REDD should be linked to carbon markets needs to be given extremely careful consideration. There are a range of potential ethical concerns and practical problems linked directly to the use of carbon markets as a source of REDD finance. 9. The question of how much REDD might cost is a contentious issue itself with specific policy implications. Sums in the tens of billions of dollars are regularly referred to, creating an incentive for most governments to speed ahead with REDD negotiations without paying sufficient attention to whether REDD will really work; and what unexpected impacts it might have. 10. Commonly quoted figures in this region need to be treated with great caution (not least because there are very significant methodological difficulties in estimating the costs of climate change mitigation[3]. Research based on the market price of exported commodities such as soy, palm oil or timber, for example, yield high figures, but these are not necessarily representative of the real lost income streams to national governments or local communities, in terms of concessions, tax and export tariff revenues, jobs and value-added industries. 11. The type of methodology giving very high cost estimates imply that companies currently engaged in deforestation activities and associated export commodities would be compensated for lost profits. Whether or not this 'full cost' approach is used is critical, since the scale of income required for REDD is often used to justify the use of carbon markets (on the basis that no other funding source can generate finance on this scale). [See Appendix 1 for examples of high cost estimate methodology] 12. It is clearly difficult to accurately pinpoint the real levels of funding required to stop emissions from deforestation in developing countries, but it is likely that true 'costs' may not be nearly as expensive as some commentators have argued. This may have implications for final decisions about the source and mechanisms of REDD finance. 13. Countries that propose linking REDD into carbon markets have done so for a number of reasons, including, variously: 14. the fact that industrialised countries have frequently reneged on previous commitments to provide voluntary financial assistance to developing countries; 15. a belief that carbon markets are the best and most cost-effective option given the scale of financing being considered[4]; 16. as a way for developing countries to participate in climate change mitigation; and 17. a desire to link funding directly to emissions reductions in Annex 1 countries because of 'moral synergies'[5]. 18. Apart from the fact that there is a real question about the scale of funding actually required, the first argument is entirely valid. Funds raised to date for existing UNFCCC and Kyoto Protocol financing mechanisms, for example, are miniscule compared with the figures being discussed in relation to REDD; and Northern governments have reneged on many similar financial commitments in the past. 19. However, most of these arguments can be countered by the fact that there are other potential sources of funding under consideration in the UNFCCC that do not rely on voluntary contributions from the North or carbon markets, such as the establishment of a fund under the authority of the UNFCCC through global carbon taxes and/or contributions of industrialised countries based on a proportion of GDP. These seem to offer some very practical alternatives without many risks specific to carbon markets.
The environmental and social risks and benefits of using such financial mechanisms 20. Whether REDD benefits local communities and successfully protects biodiversity, and the extent to which REDD activities are able to conserve carbon (especially without contributing to project-level leakage) remains to be seen. There is at least a theoretical possibility that communities could benefit from REDD, and some clearly hope to do so. 21. But experiences to date, with increasing commodity prices (especially for agrofuels, such as palm oil or soya), Clean Development Mechanism (CDM) and voluntary carbon offsets, and payments for environmental services (PES) schemes, indicate that this optimistic outcome is hardly justified, especially for already marginalised communities living in the forests. Land prices are increasing, and some people are being pushed off their existing territories, often from farmland to the forest frontier, which is worsening the deforestation crisis. 22. In the case of REDD there is also extreme uncertainty over who would receive REDD funds. If REDD had national coverage in participating countries, then it would be governments that stand to significantly increase their income, as compared with current tax revenue streams (and they thus have a vested interest in pursuing this option); but this could be at the expense of Indigenous Peoples and local communities currently benefiting from forests and often existing at the whim of the state for recognition of land rights. Furthermore, there is no guarantee that those funds would be used for the development of fair and sustainable societies. 23. On the other hand, a project-based REDD could increase the chance of funds being directed towards communities, but only if they are able to compete or negotiate with large and often predatory commercial investors and carbon traders. This is complicated by difficulties relating to official languages used and technical complexity. Furthermore, if it is communities and/or companies that benefit or are entitled to the funds, this could lead to increasing tension and violence between communities, especially for those communities without formal land rights.
REDD, land values and impacts on Indigenous Peoples 24. Either way REDD could clearly trigger a rapid expansion in lands set aside for avoided deforestation, without regard for the customary and territorial rights of Indigenous Peoples, as governments seek to protect an increasingly valuable resource from 'outside' interference, violently or otherwise. 25. Some 1.6 billion people rely on forests, including 60 million Indigenous Peoples, who are entirely dependent upon forests for their livelihoods, food, medicines and/or building materials (FAO, 2008). These people have already been severely impacted by both deforestation, largely to grow crops and agrofuels for export, and by CDM reforestation and afforestation projects. Often having no formal land title, many have been forcibly and even violently ejected from their ancestral territories. If the value of standing forests increases (regardless of the reason why) they may increasingly face governments and companies willing to go to extreme lengths to wrest their forests away from them. 26. Furthermore, commodifying forest carbon is inherently inequitable, since it may discriminate against people, and especially women, who previously had free access to the forest resources they needed to raise and care for their families, but cannot afford to buy forest or alternative products[6]. Loss of national sovereignty over natural resources 27. If REDD is financed through carbon markets, this could determine the way in which funds can be used at the national and local levels, and could effectively remove developing countries' sovereignty over their own natural resources. This is one of the reasons underlying Brazil's opposition to the use of carbon markets to fund REDD and is the reason why it has proposed an alternative funding mechanism. Ex-post payments and liability contracts 28. Carbon finance is also likely to disadvantage small players, since most payments will either be 'ex-post payments' (paid after the delivery of credits, because of the uncertainty associated with REDD), or will have stringent risk assessments and contractual liability arrangements attached to them[7]. Both scenarios would be particularly onerous for smaller projects. REDD and market volatility 29. Markets are notoriously volatile, and opportunity costs/compensation could easily vary wildly from one day to the next. Any sudden increase in timber prices (as timber supplies fall, for example) could greatly reduce the area of forest that could be protected, if it suddenly becomes more profitable to harvest the timber than maintain an avoided deforestation agreement with a given level of funding. This is in complete contrast to the predictable and stable funding that the Coalition for Rainforest Countries is requesting.
REDD credits could flood existing carbon markets 30. One key concern, that even those in favour of carbon markets are worried about, is whether cheap and plentiful REDD credits could flood carbon markets, causing the price of carbon to crash. This would damage other climate change mitigation efforts that are dependent upon the price of carbon. High likelihood of leakage 31. An enduring concern in relation to REDD is whether it can address 'leakage' concerns. A project-level approach, for example, could mean that deforestation activities simply shift to another area in the same country (depending on the specific drivers in question). Similarly, there are also concerns about whether the use of "protected areas [will] reduce deforestation overall or merely displace the pressure elsewhere"[8]. 32. Kevin Conrad of the Rainforest Coalition, and many others thus argue that REDD should be nationally-based[9]. However, even a national level approach could see deforesting activities shifting to countries that are not participating in REDD (and this is, of course, even more of a concern during any stage when REDD activities are being piloted in a restricted number of countries). 33. One obvious solution to this predicament is to involve as many countries as possible in a REDD agreement. Even so, a question would still remain about possible leakage from tropical forests to boreal and temperate forests, should REDD focus on developing countries only. Ultimately, of course, the only solution is to remove the underlying drivers of deforestation. 34. Any agreement on forests must also recognize that 'leakage' encompasses more than just displacement of carbon emissions. The social and environmental problems associated with deforestation will inevitably shift if the underlying causes of deforestation are not addressed. Forests are not permanent 35. There are obvious risks associated with the fact that forests, or at least trees, are impermanent by nature, and forests fires and die-back (whether natural or caused by climate change) could impede reductions in deforestation rates. From an investor's points of view this is a significant challenge to guaranteed profit-generation and the reason why ex-post payments are likely to be preferred. 36. In other systems, this is resolved by the use of short-term and long-term temporary credits (tCERs and lCERs respectively), which have to be renewed at the end of a given period, or if forest stocks disappear for any reason. Thus the liability for the project rests with the purchaser (although purchasers can also insure against credits expiring unexpectedly). However, temporary credits generate less income, so the sellers may prefer to shoulder liability themselves and sell more expensive permanent credits. One way round this is to save a certain proportion of all credits to be banked in trust or reserve accounts against future losses (and this has been proposed by members of the Coalition for Rainforest Nations)[10]. 37. A key point here is that these problems really only apply to systems funded through carbon markets or other similar processes in which levels of positive incentives are determined by carbon stock levels or deforestation reduction rates. Plantations are not forests! 38. As long as plantations are included within the FAO's definition of forests[11] there is a very real risk that REDD will be used to fund the expansion of plantations, even though it is now recognised that plantations store only 20% of the carbon that untouched old growth forests do[12]. Can REDD work in the absence of clear land tenure? 39. REDD refocuses attention on a key moral dilemma - who, if anyone, do forests belong to? And who has the rights to sell forest credits? It is certainly clear that in the absence of secure land rights, Indigenous Peoples and other forest-dependent communities have no guarantees that they will receive any form of REDD 'incentive' or reward for forest conservation. There are also territorial disputes and claims in many of the countries eligible to participate in REDD; REDD could inflame these debates and/or lead to increased state or corporate control over forests. There is some evidence to suggest that the redistribution of land in land reform programmes is already being impeded by increasing land and commodity prices[13]. 40. However, it seems that, from a carbon finance point of view, investors are more likely to favour low-risk projects or countries, where land tenure is not a contentious issue. Some might argue that this is, in theory at least, one area where carbon finance might have a positive benefit, encouraging the resolution of land tenure issues. However, there still remains a very strong possibility that such 'resolution' would actually deny the rights of local communities and Indigenous Peoples (and there are anecdotal reports of such developments emerging already).
41. Critically, establishing a new mechanism to further institutionalise international carbon offsetting is likely to discourage industrial emissions reductions, making it less likely to avoid dangerous climate change. Furthermore, because of complex methodological problems, linking REDD to carbon markets could even mean that credits are purchased from REDD projects that do not successfully deliver on their deforestation goals, meaning that the Northern emissions may not actually be offset. This would lead to unacceptable risks of passing critical climate tipping points. At best, a market REDD mechanism will create the opportunity for offsetting necessary reductions of industrial emissions, and at worst, enable an increase in global emissions, as has been already observed through projects credited through the UN Clean Development Mechanism - the only other UN-mandated North-South carbon trading instrument. 42. It is becoming increasingly clear that steep reductions in emissions from both industrial and forest sources are urgently required - not either, but both. Latest emission scenarios from the Tyndall Centre for Climate Change Research illustrates this imperative, using the latest available scientific data combined with international-standard scenario modeling (please see the attached report). This research clearly suggests that any failure to achieve at least 40% industrial emissions reductions by 2020 in industrialised countries, as well as achieving an urgent halt to deforestation globally, will almost certainly result in dangerous and possibly catastrophic climate change. It is totally without scientific credibility for industrialised countries to even consider off-setting their own emissions reductions, unless domestic-only emissions targets at least 40% by 2020 are achieved. Funding for international efforts to halt deforestation are urgently needed, however this must be additional to domestic reductions in the order of 40% by 2020, and not in place of them.
43. The World Bank's Forest Carbon Partnership Facility has been hastily established and has been beset with controversy. Concerns relate to the design process failing to adequately involve potentially affected local communities [see Appendix 2]; conflicts in the bank's portfolio by increasing its lending to fossil fuel projects throughout 2007[14] while simultaneously venturing into climate mitigation financing; and through institutionalising a global mechanism to reduce emissions from deforestation in advance of UNFCCC negotiations, thereby undermining efforts underway in the UNFCCC.
44. Monitoring and verification of deforestation are difficult, although officials claim that technologies have improved sufficiently to proceed with REDD. There is also some discussion about whether methodologies should be based on those already developed in the Good Practices Guidance (GPG) for Land Use, Land Use Change, and Forestry (LULUCF)[15]; and the Revised 1996 Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories, which are used by Annex I countries. 45. However, even if methodologies are deemed sufficient, cost could still be a stumbling block, because of: 46. the cost and availability of satellite imaging; 47. the cost of 'ground truthing', which is particularly important if degradation is to be included (still a contested point, for precisely this reason); and 48. the fact that the cost of installing monitoring and verification systems are up-front costs, whereas income through carbon financing is likely to be ex post. 49. Many methodological problems are not simply technical issues but have significant implications for policy making. 50. Monitoring and verifying the carbon content and emissions reductions of forests is particularly complex and expensive. Policies to stop deforestation, as opposed to trading in emissions reductions, do not necessarily require such a complex and expensive monitoring and verification system. The success or otherwise of Government efforts in reducing emissions from international land use change 51. UK emissions
resulting from land use change are significant but inadequately understood. The
greatest emissions will be from imported products which result from land use
change overseas as most land conversion in the 52. Two key
commodities will feature heavily in any inventory of Impacts of consumption: 53. Biofuels: Carbon dioxide emissions from
land use change could "completely negate any emissions savings from biofuels"[16].
Clearing land to grow biofuels creates additional greenhouse gas emissions from
the cleared vegetation and from the soil. This creates a "carbon debt" that
needs to be offset by the carbon savings from substituting fossil fuel with
biofuel. Biofuel from soya has a "payback time" for this carbon debt of up to
1000 years (if replacing forest)[17],
which is one of the worst payback times of all biofuel crops. Soya is the most
widely used feedstock for biofuel used in the 54. Animal feeds: We import significant
levels of soya from South America to feed Measuring and reporting: 55. Biofuels: So far emission from indirect
land use change have not been taken into account in current standard values for
green house gas emissions from biofuels. No universally accepted method exists
so far to measure and address emissions from indirect land use change. There is
a danger that the 56. Food: The 57. What the Government must do is take a consumption based approach and start to measure the detail of embedded emissions and target total emissions from food and biofuel consumption. Areas for policy reform to tackle this should include: climate and biofuel policy; agricultural subsidies targeted to support domestic protein feed production and low impact livestock systems; Government investment in development initiatives (see Appendix 3); Government procurement of food particularly meat and dairy; education and awareness on food impacts; and research and development investment on low impact diets. The interaction of carbon finance mechanisms with the timber trade: 58. The principal way in which carbon finance mechanisms are likely to interact with the timber trade is through payments to managed forests; for the carbon sequestered within forests, or for the increase in forest cover and additional carbon sequestered as a result. Where re-forestation has taken place this has principally been through the expansion of tree plantations. 59. The social and environmental impact of tree plantations are of great concern and include the depletion of water sources due to changes in the hydrological cycle; deterioration of rivers and streams; air and water pollution due to the use of pesticides and other agrochemicals; the displacement of entire communities when their land is occupied by plantations; violations of human, labour and environmental rights; differentiated impacts on women; the deterioration of cultural diversity; widespread violence; and the critical loss of biodiversity. 60. There is a significant risk that carbon finance mechanisms will play a role in increasing the growth of tree plantations, both through reforestation and the conversion of natural growth forests. 61. A move towards payments of this type are likely to be disproportionately directed towards large business operators, as they will be best placed to cope with the necessary bureaucracy that would be associated with carbon finance mechanisms. Community based forest management approaches would be unlikely to be able to benefit relatively from finance mechanisms and so be disadvantaged despite the numerous social and environmental side benefits they bring. 62. Financing for forest conservation should pay for programmes that support traditional forest stewardship by local communities and Indigenous Peoples, cover the actual costs of monitoring and protecting forest ecosystems, and compensate for benefits lost to governments and local communities when activities destroy forests. Government progress on tackling illegal timber since the EAC 2006 Report on sustainable timber 63. Whilst
we welcome some of the efforts the government has made on sustainable timber,
we are disappointed by the lack of progress that has been made to date,
especially in either the EU or 64. Many of the report's specific recommendations are dealt with elsewhere within this submission. Here however we would like to highlight one particular area: 65. Destructive activities of 66. In the follow up to the Companies Act 2006, the government has not produced clear guidance for companies on how to report on their social and environmental impacts, we hope that the government will use the opportunity of the planned review in 2009 to ensure this takes place. Currently only a small number of companies need to report, we believe this should be mandatory for all medium-large public and private businesses. These reports should be independently audited. 67. Additionally,
whilst there has been government support for the Ruggie process at the UN, much
more needs to be done, to ensure that victims of 68. The success or otherwise of the EU Forest Law Enforcement, Governance and Trade (FLEGT) Action plan, and Government support for it: Friends of the Earth is broadly supportive of the EU's FLEGT Action plan, however we have concerns over the speed at which additional measures legislation has been forthcoming and also, with respect to Voluntary Partnership Agreements, at the quality of some stakeholder consultations, whether the definitions of legality will be broad enough, whether all products are included, and the enforcement and quality of traceability mechanisms for timber. 69. Voluntary Partnership Agreements: We fully support the approach which Voluntary Partnership Agreements can adopt in addressing and supporting timber producing countries as an opportunity within producing countries to drive change in the forest sector by: strengthening governance, improving and better implementing forest and environmental laws, enabling dialogue between government and civil society. Any solution which does not attempt to address the underlying issues of weak governance, corruption and land tenure is doomed to failure. 70. Addressing weak governance is never a simple task, but involving the many parties and stakeholders, from timber traders and forest based communities and relevant government departments in an open transparent and accountable process is crucial to the success and sustainability of any reforms, which come about as part of the VPA process. 71. We
cautiously welcome the signing of the VPA with 72. Regrettably,
the VPA process in 73. However VPAs, even if perfectly implemented will not be sufficient alone to curb illegal and destructive logging significantly at a global level. The current structure of the EU Licensing Scheme does not prevent the import of around 90% of illegally harvested wood products into the EU. [See Appendix 4 for details of the potential shortcomings that could undermine the original intentions of the EU to control illegal timber imports] 74. For this reason it is imperative that we see rapid action to develop and implement strong additional measures. 75. Additional Measures: As a priority, the
76. Ensuring the legislation contributes to tackling global environmental problems and to protecting the livelihoods and rights of forest dependent communities: We are seriously concerned about the proposal's weak contribution towards the objective of halting deforestation and mitigating climate change, reducing biodiversity loss, alleviating poverty and protecting indigenous peoples' rights. 77. For instance, the proposed legislation fails to require that all legal timber is produced supporting the three pillars of sustainable forest management and multilateral environmental agreements. It does not go beyond existing national standards. "Legally harvested timber" is defined in the narrow context of national laws on regulating forest conservation and management and trade in timber (products). This possibly excludes a range of national laws on environment, labour and community welfare as well as around tenure use and rights to land and resources. This also ignores equally relevant regional and international conventions and agreements that the EU and major forest-rich countries have signed throughout the years. 78. To improve the environmental credentials of the law, the Parliament and member states should include provisions to help move towards stronger environmental and social standards for legally produced timber, and prevent the marketing of timber from endangered and sensitive areas. For instance, timber from "forests undisturbed by human activity" and from '"forests from conflict areas" should be prevented from entering the supply chain, and timber from "other natural and primary forests" should be required to meet additional conditions and criteria. There are already ongoing negotiations in relation to sustainability criteria for the above categories under the Renewable Energy Directive. 79. Making it explicitly an offence to import, sell or possess illegal timber, and asking for proof of legality, not just assurances that control systems are in place: The proposed regulation rightly places responsibilities on forest-based industries and operators. They will need to assess and manage the risk of legality in relation to the timber and timber products they wish to sell. By requiring companies to perform due diligence and by setting standards and systems for risk management and legality verification, the proposed legislation has the potential to generate significant systemic changes in the way companies operate. 80. Regrettably, however, operators are not required to systematically prove the legal origin of their products at the first point of sale on the European market (e.g. with a label code). The legislation merely requires them to have due diligence systems in place to assess and manage the risks illegally harvested timber, not to ensure the legal origin of every product sold to consumers. This should be corrected. 81. The proposal should also 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. 82. Equipping the regulator with tools and teeth to control timber products, detect illegalities and investigate crime: National control authorities should also be given the teeth to control timber products traded in or placed on the market, detect illegalities and investigate crime. For the moment, their action is merely limited to controlling the diligence systems and not the trade and marketing of timber and timber products itself. The due diligence approach must therefore be supplemented by introducing criminal law components and an additional control approach building on the principle of legality and the role of competent authorities. 83. Establishing a robust public monitoring system to assess the performance of private schemes: The proposed legislation is over-reliant on private-based systems of legality verification and risk management. Environment groups are concerned that some of the existing schemes are not robust enough and therefore may not provide reliable proof of legality. An EU public monitoring system needs to be put in place to assess and supervise the long-term performance of approved schemes on the ground. The proposed regulation should specify who will assess private schemes and how, and who will initiate an appeal system in case of a drop in performance and how. Legislation should also set up a mechanism to settle disputes and manage complaints. The establishment of an EU public monitoring system would be beneficial as it would provide an incentive for private schemes to maintain good performance at all levels. It would also prevent misleading information to be given to European consumers and public authorities. 84. Creating a reliable mechanism to determine the level of risk that timber derives from illegal sources and determine measurements to be taken in cases of high risk regions: While the proposed legislation requires operators to use risk management tools to direct monitoring and control efforts towards high risk suppliers, it does not specify who determines the level of risk, on what grounds and with what aim. 85. In a weak interpretation of the proposal, risk could simply be assessed by operators or industry federations, which effectively means self-regulation. Weak risk analysis aside, this could lead to legal uncertainties and unfair competition between companies based in different member states. The proposal should be amended to include: i) an obligation to label all wood products with information on the species, country and forests of origin; ii) provisions for a Commission or member states'-managed public database(s) that keep(s) record of the names of logging companies and operators convicted of illegal activities; iii) stipulating a list of existing information sources that operators can use to assess risk levels; iv) guidance for the use of risk management tools; and v) clear rules on third party verification as a mandatory supplementary measure in high risk cases. The creation of a strong and reliable EU risk management system and mandatory supplementary measurements is essential to make it harder for high-risk operators to sell timber and timber products on the European market. 86. Ensuring all control systems and procedures are water-tight, including FLEGT licence and CITES documentation: By considering the FLEGT licence and CITES documentation as sufficient evidence of due diligence, the EU intends to create an incentive for countries to join FLEGT voluntary partnership agreements or to list more tree species on the CITES lists. This is generally a valid approach. However, the EU should first ensure that neither of these systems have loopholes that can be used to launder illegal timber. National authorities should be given the right to control and investigate allegations of infringement to FLEGT licence and work on the better enforcement of CITES regulation. 87. Improving the current range of product coverage: Wood products for energy production should be included within the scope of the regulation as they should both be legal and sustainably produced. Having different regulations for wood products (sustainability criteria for energy products and legality criteria for other wood products) will disturb the market and create loopholes.
Appendix 1 The Stern Review, even though it is still rather low compared with some other estimates, exemplifies the 'full cost' approach to REDD, as its figures are based on total lost income or cost to GDP. It states, for example, that the Net Present Value of income "ranges from $2 per hectare for pastoral use to over $1000 for soya and oil palm, with one off returns of $236 to $1035 from selling timber." (Grieg-Gran, 2006, quoted in Stern 2006, Chapter 25:543). It is also interesting to note that others, such as EcoSecurities, calculate how much money can be 'generated' by selling REDD credits on the carbon markets, rather than considering 'costs'. Thus EcoSecurities, for example, estimates that a 10% reduction in the world's deforestation rate could generate between US$ 3-9 billion per year, and a 50% reduction somewhere between US$15-45 billion (EcoSecurities, 2007).
Appendix 2: On the impacts of the Forest Carbon Partnership Facility on indigenous peoples' rights to land and resources, some specific criticisms from the NGO Forest Peoples Programme include: Governance arrangements that allow input from indigenous peoples on invitation only and on a no voting rights basis; Oversight for safeguard application is entrusted to the secretariat and there is no allowance for a grievance or redress mechanism for indigenous peoples; There is no commitment to uphold human rights and the charter does not require the Bank to uphold standards in the UN Declaration on the Rights of Indigenous Peoples; and Plans to allow low-impact logging and plantation development in the emission reduction programmes will mean business as usual.
Appendix 3: According to work carried out by ex-World Bank
environmental chief, Robert Goodland, the World Bank has funded detrimental
livestock projects to the tune of $672 million. These 22 projects are
predominantly in South America (9), but Asia (5) and Local campaigning groups identify significant environmental damage as a result of these publicly funded projects. No studies or consultations have been conducted of the areas involved (and if they have, they are not releasing them); the specific sites for development have not been publicly identified; the project is taking account of previous illegalities in land-use and deforestation and will continue to contribute to these further; and, emissions of 56 million tonnes of CO2 will be released by the project over the ten years and this does not include those unidentified developments/sites. The World Bank produced a Livestock Strategy document in 2001 which proclaims that the World Bank will not fund projects which promote industrialisation of farming or are detrimental to small or local farmers (amongst other things). The IFC have refused to acknowledge the strategy, stating that the document hasn't been officially endorsed by the World Bank board. The World Bank
board must update and ratify the livestock strategy and the IFC must IFC
publicly acknowledge and apply the current livestock strategy. The
Appendix 4
Risk of circumvention: Timber and wood products imported by the EU, via a third party country such as China and Russia, are not addressed, despite these two countries currently being the main suppliers to the EU market in timber products. Limited product coverage: secondary processed products, such as paper and furniture, which represent about 55% of the total trade in timber products, will not be covered by the voluntary scheme, at least not initially. Risk of laundering: If the partner country has
no national legislation to control the import and sale of timber and timber
products from non-partner countries, any illegal timber imports could be mixed
with the legal domestic production of the partner country, and then exported to
Geographical scope: Not all producer countries are likely to sign VPAs. Some large timber
producing countries such as
13 October 2008 [1] Geist H and Lambin E, 2002. "Proximate causes and underlying driving forces of tropical deforestation" BioScience Vo. 52(ii) pp 143-150 [2] L. Braat & P. ten Brink et al, 2008. "The Cost of Policy Inaction: The case of not meeting the 2010 biodiversity target" Alterra, Wageningen UR, Brussels Final Report, Executive Summary p. 4 http://ec.europa.eu/environment/nature/biodiversity/economics/index_en.htm [3] Trines (2007). Investment flows and finance schemes in the forestry sector, with particular references to developing countries/ needs, a report for the Secretariat of the UNFCCC, Final Report, corrected version, 24 July 2007, Eveline Trines. http://unfccc.int/files/cooperation_and_support/financial_mechanism/application/pdf/trines.pdf [4] Regulatory markets generated US$5.3 billion in 2006. Voluntary carbon markets are smaller at present, although growing rapidly. They generated US$92 million in 2006. Both are expected to grow significantly) (EcoSecurities, 2007) [5] Myers (2007). Policies to Reduce Emissions from Deforestation and Degradation (REDD) in Tropical Forests, an examination of the issues facing the incorporation of REDD into market-based climate policies, Erin C Myers, December 2007, http://ideas.repec.org/p/rff/dpaper/dp-07-50.html [6] GFC (2008). Life as Commerce: the impact of market-based conservation mechanisms on women. Simone Lovera, for Global Forest Coalition, 2008, www.globalforestcoalition.org/img/userpics/File/Impacts-marketbasedconservationmechanisms-on-woman.pdf [7]
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