Documents considered by the Committee on 11 March 2009 - European Scrutiny Committee Contents


3 Deforestation and climate change

(30047)

14473/08

+ ADDs 1-3

COM(08) 645

Commission Communication: Addressing the challenges of deforestation and forest degradation to tackle climate change and biodiversity loss

Legal base
Document originated17 October 2008
Deposited in Parliament22 October 20008
DepartmentEnergy and Climate Change
Basis of considerationEM of 26 February 2009
Previous Committee ReportNone
To be discussed in CouncilSee para 3.13 below
Committee's assessmentPolitically important
Committee's decisionCleared, but relevant to the debate recommended on proposed climate change agreement

Background

3.1 According to the Commission, forests deliver a multitude of economic and social benefits, together with major environmental benefits related to biodiversity and climate change. However, it notes that they are under threat from deforestation and degradation,[8] with these losses accounting for some 20% of global emissions of carbon dioxide, and it points out that reducing these will be essential if the Community's aim of limiting global warming to 2°C is to be achieved. It notes that deforestation has a central place in the UN climate negotiations, and that the Copenhagen conference at the end of this year will provide a unique opportunity to tackle the challenge this presents — which it suggests will in turn require a number of Community policies to be reinforced. In particular, it says that a new instrument (the Global Forest Carbon Mechanism) should be established to generate sufficient funding to tackle deforestation and forest degradation, accompanied by the inclusion of deforestation in carbon markets. Consequently, without intending to give definitive answers to the many issues which arise, it has sought in this Communication to set out the main lines of a Community response, and to set in train a series of initial actions to provide the foundations of a viable global approach to this problem.

The current document

The challenges of deforestation

3.2 The Commission points out that the world has lost over 3% of its forest cover between 1990 and 2005, equivalent to 13 million hectares, of which 96% has occurred in tropical regions, adding that the loss of tropical forests must be the prime focus of action because of their impact on climate and the biodiversity they contain. It notes that the causes are diverse, complex and vary according to the geographical locations involved, but that the most important tends to be changes in land use, where profitable alternatives provide incentives to deforestation. It adds that, although infrastructure development is a factor, the most important underlying cause is poor governance, linked to poorly enforced land use policies and uncertain land tenure regimes.

3.3 The Commission says that deforestation has a number of particular adverse consequences. As regards climate, it notes that emissions of carbon dioxide are generated from decomposition of biomass and burning, emissions from soil, reductions in the amount of energy reflected from the earth's surface, and changes in the interaction between forests and the chemistry and hydrology of the atmosphere; that, since tropical forests host about half of all terrestrial species and play a central role in the functioning of the biosphere, it will give rise to a significant biodiversity loss; that it will increase poverty because of the ecosystem services which forests provide and because many of the world's poor depend on them for their livelihoods; and that it has an adverse impact on human health, due to increases in air pollution and the spread of insect-borne diseases.

Addressing the challenges of deforestation

3.4 The Commission says that the cut in global emissions needed to meet the aim of limiting temperature rises to 2°C will be impossible to achieve without substantial action to combat deforestation, and that the UN negotiations should aim to halt the loss of global forest cover by 2030 at the latest, and to reduce gross tropical deforestation by at least 50% by 2020, compared with current levels. It goes on to identify specific areas of action as being the strengthening of forest governance and institutions; a recognition of the importance of economic factors as a driver, requiring a policy which rewards the value of the services provided by forests; and the need to focus on demand and the responsibility of consumers. These would be underpinned by the provision of high quality information in order to guide policy decisions and monitor implementation.

Contribution of Community policies

3.5 The Commission notes that many internal and external Community policies have indirect impacts in this area, and that a number of these — notably trade, energy, agriculture, food security, and development cooperation — can play a significant role, given that the Community is a major consumer of timber and timber products from around the world. It suggests that measures which can directly promote sustainable forest management include action through the Forest Law Enforcement Governance and Trade (FLEGT) Action Plan, which ensures that exports from participating countries are covered by a license attesting that the timber has been produced legally; a related proposal that Community operators should be obliged to minimise the risk of illegally harvested products entering their supply chain; participation in international fora, such as the International Tropical Timber Organisation; green procurement policies, eco-labelling; and developing sustainability criteria for wood and other biomass used to generate renewable energy. In addition, initiatives such as the Global Monitoring for Environment and Security (GMES) enable monitoring land use changes to be monitored.

3.6 As regards Community policies related to non-timber products, the Commission notes that there is a tension between deforestation and increasing food production, and that the latter should be increased without further deforestation, for example by increasing yields and stepping up sustainable production in developing countries. It says that a similar consideration applies to the development of biofuels, with guidance being prepared under the Convention on Biological Diversity. More generally, the Commission notes that it is committed to assessing the impact of future Community and international policy initiatives on deforestation, ensuring that future reviews and assessments of trade and agricultural agreements include a specific analysis of their impact on deforestation; studying the impact of Community consumption of imported food and non-food commodities which are likely to contribute to deforestation; doubling support for international agricultural research in order to improve productivity; and supporting developing countries in their efforts to attain the Millennium Development Goals.

3.7 The Commission also addresses the question of the significant additional funding which it says will be needed in order to tackle deforestation successfully. It suggests that an estimated €15 to 25 billion a year would be needed to halve deforestation by 2020, that developed countries will need to allocate considerable resources to help tackle deforestation in developing countries, and that this will need to come from both public and private sources. It adds that funding will only be effective if developing countries are first provided with the assistance needed to build capacity and strengthen institutions, if work is carried out to resolve remaining technical issues, if performance can be assessed and rewarded against agreed baselines and if existing and proven aid delivery practices are used and the principles of sound management followed. The Commission suggests that the amount of funding provided to developing countries should depend upon the level of mitigating actions they undertake, and that a major portion of this could come from the proceeds of auctioning allowances within the Emissions Trading Scheme, with a proposed amendment[9] to that Scheme having suggested that at least 20% of those proceeds should be used to support climate objectives. More specifically, it says that, if 5% of this revenue were to be earmarked for this purpose, €1.5-2.5 billion could be raised in 2020. This funding would be complemented by development assistance from the Community and Member States to improve governance, and by private funding.

Deforestation in the UNFCCC context

3.8 The Commission says that the Community should aim to establish an internationally supported incentive scheme to reduce deforestation and forest degradation in developing countries as part of the future UNFCCC global agreement for the period 2013-2020, and that such a scheme should be open to all developing countries which ratify the agreement and are able to contribute to its objectives through a commitment to take national mitigation action to reduce emissions from these sources.

3.9 It advocates a two-track approach, involving first the establishment of a Global Forest Carbon Mechanism, which would support capacity-building activities in developing countries, involve nationwide implementation covering the whole forestry sector, aim to secure eco-benefits to the greatest possible degree, enable the results to be assessed, monitored and accounted for by independent verification, and require effective forest governance systems to be in place. In the longer-term, the Commission suggests that the case for including deforestation in carbon markets should be examined, on the basis of an international agreement with ambitious emission reduction commitments and the creation of a new sectoral market mechanism, but it cautions that the inclusion of forestry credits in the Emissions Trading Scheme should only be considered after 2020 and following a thorough review.

The Government's view

3.10 In her Explanatory Memorandum of 26 February 2009, the Parliamentary Under Secretary of State at the Department for Energy and Climate Change (Joan Ruddock) says that tackling deforestation is vital to addressing climate change and the future climate change agreement as well as contributing to wider environment and development agendas, and notes that there is likely to be a large funding gap. She goes on to say that the UK's views differ from those of the Commission in two respects.

3.11 On the suggestion that the proposed Global Forest Carbon Mechanism would pay for forest credits largely from the proceeds of auctioning allowances within the Community's Emissions Trading Scheme, she says that the Government is in principle opposed to hypothecation as an inefficient means of determining public expenditure priorities. It is therefore considering innovative sources of financing which will maximise leverage from the private sector, in conjunction with demands for financing for low carbon technology and adaptation.

3.12 Likewise, she says that the UK would like to see consideration of market credits earlier than 2020, commenting that a review published in October 2008 has advocated an approach under which carbon market finance starts to grow in 2013 onwards, and that this would produce a more positive outcome than that suggested by the Commission. The UK would therefore like to see full consideration of carbon market access, based on conditions dependent on understanding the relationship with the carbon price; understanding the price impacts on other market mechanisms which are still under negotiation; and long term responsibility for the forests.

3.13 Finally, the Minister notes that the Commission intends that the approach outlined in this Communication should form part of the Community's position in relation to the climate change conference in Copenhagen, on which it had recently put forward a further Communication,[10] for discussion at the European Council on 19-20 March.

Conclusion

3.14 It is clear that the issue of deforestation is of considerable significance in the context of wider climate change developments, and, for that reason, we are drawing this Communication to the attention of the House. However, the Commission has made it clear that it does not see this document as providing a definitive answer to the various issues which arise in this area, and that its principal purpose is to set out the main lines of a Community response. In view of this, we do not think it necessary to withhold clearance, but we do regard the document as relevant to the debate which we have recently recommended should take place in European Committee A on the Communication setting out wider Community objectives for the Copenhagen conference at the end of this year.





8   "Degradation" is defined by the FAO as the "long term reduction of the overall supply of benefits from the forest, which includes carbon, wood, biodiversity, and other goods and services". Back

9   (29402) 5862/08: see HC 16-xiii (2007-08), chapter 4 (27 February 2008). Back

10   (30412) 5892/09: see HC 19-ix (2008-09), chapter 1 (4 March 2009). Back


 
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