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FUNDING RAINFOREST CONSERVATION
By Rhett Butler | Last updated April 1, 2007
Now that we have prioritized what forest areas should be set aside for reserves, we must focus on implementation and
management of these protected areas. Clearly all three steps will require a broad spectrum of participants, from
local farmers to CEOs of multinational corporations to high-ranking government officials. Without cooperation, any
protected-areas system is destined to fail.
FUNDING
Reserves are expensive to establish and maintain, as is forest management. In the 1990s, the U.N. FAO estimated that the forestry
sector was funded only 27 percent of what it requires, while the United Nations Conference on the Environment and
Development (1992) estimated the cost of protecting tropical forests through sustainable development at $30 billion
per year (a number that has roughly doubled today). The countries in which reserves and forest management are most needed often have neither the money nor the
interest in funding these projects. Other priorities — ranging from growing the economy to improving health care access to providing education — win out over forests. Yet innovative models are showing that forest conservation need not be separate from other initiatives. In fact protecting forests can go hand-in-hand with economic growth and poverty alleviation.
FUNDING METHODS
Debt Exchange
One method of financing conservation projects in developing countries is debt-for-nature programs where conservation
and other international organizations purchase a portion of a developing country's commercial debt at a discount,
or else persuade creditor banks to donate some of debt. Foreign debt can be purchased at 50 to 90 percent of its actual
value and sometimes far less. For example the non-profit organization Conservation International purchased $650,000 worth
of Bolivian debt for only $100,000 when it initiated the first debt-exchange program in 1987. In exchange for being
relieved of the obligation to repay a portion of international debt, the country agrees to set aside funds to promote
conservation by encouraging sustainable development, expanding environmental education programs, purchasing land,
and improving land management. Within a decade of the first agreement, debt-for-nature agreements totaling nearly US$1 billion had been arranged
in sixteen countries including the tropically forested countries of Argentina, Bolivia, Costa Rica, Dominican Republic,
Ecuador, Guatemala, Honduras, Jamaica, Mexico, Madagascar, Philippines, Venezuela, and Zambia.
In 1998, Congress approved a bill that authorized more funding for debt-for-nature swaps.
Under the Tropical Forest Conservation Act, the U.S. reduces
or forgives debt owed the U.S. by developing countries in exchange for establishing forestry funds to be used for
conservation and promoting economic reform. The act mandates that projects be carried out at the local level by
NGOs, community organizations, and indigenous organizations. By 2011, debt-for-nature swaps under the TFCA had generated more than $250 million for forest conservation.
According to an analysis by the World Bank, while debt-for-nature agreements will never substantially reduce external debts of poor countries—which are far too large for such schemes— they can dramatically increase the amount of funds spent by the debtor country on environmental protection.
Possible Funding Strategies for the Future
There are other means that may prove useful in financing reserves, although they have not been developed
to their fullest potential. Most of these are based on the concept that all nations should contribute to rainforest preservation
since the effects of deforestation will impact everyone. Wealthy countries are expected to provide most of the funding. Some have suggested that money could come by reducing subsidies currently given to certain polluting and environmentally damaging industries, such as the fossil fuels and mining sectors.
Presently the most advanced program for funding rainforest conservation is called Reducing Emissions from Deforestation and Degradation or REDD+. As a concept, REDD+ aims to cut greenhouse gas emissions by paying tropical countries to protect their forests. While many of the details — including sources of finance, safeguards, and implementation protocols — are still being hammered out, a number of REDD+ projects are underway in countries ranging from Brazil to Cambodia. REDD+ has the potential to generate tens of billions of dollars annually for forest protection efforts.
Another approach that has been discussed is a "rainforest bond", which would be issued by a forest country and sold to investors. The bond would generate money upfront for conservation activities and would be paid back using revenue generated from environmental taxes, reduced impact logging, and payments for ecosystem services — including carbon sequestration and watershed services. Rainforest bonds have been advanced by Prince Charles' Rainforest Project as a mechanism for funding the early stages of the REDD+ program.
Articles on REDD+ >>
Review questions:
- How can pollution by wealthy countries be used to protect rainforests in poor countries?
- What is a debt-for-nature swap?
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(07/19/2012) Industrial logging in primary tropical forests that is both sustainable and profitable is impossible, argues a new study in Bioscience, which finds that the ecology of tropical hardwoods makes logging with truly sustainable practices not only impractical, but completely unprofitable. Given this, the researchers recommend industrial logging subsidies be dropped from the UN's Reducing Emissions from Deforestation and Forest Degradation (REDD+) program. The study, which adds to the growing debate about the role of logging in tropical forests, counters recent research making the case that well-managed logging in old-growth rainforests could provide a "middle way" between conservation and outright conversion of forests to monocultures or pasture.
(03/19/2012) If done well, REDD+ projects (Reducing Emissions from Deforestation and Forest Degradation) may not only save carbon rich forests, but also protect embattled biodiversity. But what's the best way to ensure both and carbon and species are preserved under REDD+, a program that proposes to pay nations to keep forests standing? A new study in mongabay.com's open access journal Tropical Conservation Society (TCS) argues that a one-size-fits-all approach to monitoring biodiversity in REDD+ projects would not only be difficult to develop, but would likely fail given vast differences in forest ecology and threats worldwide. Instead local sites should develop monitoring programs based on a generally approved roadmap.
(02/21/2012) A pioneering project to reduce deforestation and forest degradation in a former conflict zone in Colombia has won gold certification under the Climate, Community, and Biodiversity (CCB) standard. The accreditation will help local communities access carbon finance in their efforts to safeguard biologically-rich forests. The project is located in Colombia's Darien region, near the border with Panama. The area is part of the Chocó, the rainforest ecosystem that runs along the Pacific coast of Colombia and Ecuador but has been heavily affected in places by deforestation. Everildys Cordoba is the project's coordinator on the community side. Cordoba grew up in Penaloza, a small town not far from the Caribbean coast of Colombia and the country's border with Panama. But in 1998, she was forcibly displaced by armed actors. Today, she has returned to her land to lead the project.
(01/17/2012) A proposed mechanism to reduce greenhouse gas emissions by protecting tropical forests has evolved considerably since it started to gain momentum during the 2005 climate talks in Montreal. Known then as 'avoided deforestation', the concept was simple: pay tropical forest countries to keep their forests standing. Since then, the concept has broadened to include activities beyond strict forest conservation, including reducing logging and fire, protecting carbon-dense peatlands, encouraging better forest management practices in existing forest concessions, and promoting reforestation and afforestation. A prominent voice in the discussion around REDD since its inception is the environmental activist group Greenpeace. Mongabay recently caught up with Roman Czebiniak, Greenpeace International's Political Advisor on Climate Change and Forests, for an update on the organization's position on REDD as well as recent developments in the forest carbon policy arena.
(10/11/2011) The 11th Rights and Resources Initiative Dialogue on Forests, Governance and Climate Change in London, which will focus on The Status and Role of Public and Private Finance to Reduce Forest Loss and Degradation. The goal of the RRI Dialogue is to examine the current state of public and private financial mechanisms for REDD+ and adaptation and contribute to developing an updated vision for the optimal design and deployment of finance to reduce forest loss and degradation - while respecting the rights and development needs of local people. RRI has partnered with Mongabay.com to present two diverging viewpoints on issues to be discussed at length at the dialogue, featuring Vicky Tauli-Corpuz (Executive Director, Tebtebba) and Scott Poynton (Executive Director, The Forest Trust).
(01/06/2011) The emergence of a Reducing Emissions from Deforestation and Degradation (REDD) mechanism for protecting forests could introduce new risks for biodiversity by linking conservation finance to exotic financial derivatives, warn researchers writing in the journal Conservation Letters. Jacob Phelps, Edward L. Webb, and Lian P. Koh argue that REDD could effectively link the fate of some species to the short-term whims of the carbon market. Conservation projects funded primarily by REDD are most at risk of being undermined by declining in carbon prices or changing investor preference. The authors add that the short-term nature of REDD—which is seen as a stop gap measure of at most 30 years—may fail deliver benefits over the time-scale need to safeguard biodiversity.
(12/28/2010) Flying in a plane over the Indonesian half of the island of New Guinea, rainforest stretches like a sea of green, broken only by rugged mountain ranges and winding rivers. The broccoli-like canopy shows little sign of human influence. But as you near Jayapura, the provincial capital of Papua, the tree cover becomes patchier—a sign of logging—and red scars from mining appear before giving way to the monotonous dark green of oil palm plantations and finally grasslands and urban areas. The scene is not unique to Indonesian New Guinea; it has been repeated across the world's largest archipelago for decades, partly a consequence of agricultural expansion by small farmers, but increasingly a product of extractive industries, especially the logging, plantation, and mining sectors. Papua, in fact, is Indonesia's last frontier and therefore represents two diverging options for the country's development path: continued deforestation and degradation of forests under a business-as-usual approach or a shift toward a fundamentally different and unproven model based on greater transparency and careful stewardship of its forest resources.
(09/07/2010) Forest carbon payment programs like the proposed reducing emissions from deforestation and degradation (REDD) mechanism could put pressure on wildlife-friendly farming techniques by increasing the need to intensify agricultural production, warns a paper published this June in Conservation Biology. The paper, written by Jaboury Ghazoul and Lian Pin Koh of ETH Zurich and myself in September 2009, posits that by increasing the opportunity cost of conversion of forest land for agriculture, REDD will potentially constrain the amount of land available to meet growing demand for food. Because organic agriculture and other biodiversity-friendly farming practices generally have lower yields than industrial agriculture, REDD will therefore encourage a shift toward from more productive forms of food production.
(07/22/2010) Scientists convening in Bali expressed a range of concerns over a proposed mechanism for mitigating climate change through forest conservation, but some remained hopeful the idea could deliver long-term protection to forests, ease the transition to a low-carbon economy, and generate benefits to forest-dependent people.
(05/03/2010) Over the past 30 years billions of dollars has been committed to global conservation efforts, yet forests continue to fall, largely a consequence of economic drivers, including surging global demand for food and fuel. With consumption expected to far outstrip population growth due to rising affluence in developing countries, there would seem to be little hope of slowing tropical forest loss. But some observers see new reason for optimism—chiefly a new push to make forests more valuable as living entities than chopped down for the production of timber, animal feed, biofuels, and meat. While are innumerable reasons for protecting forests—including aesthetic, cultural, spiritual, and moral—most land use decisions boil down to economics. Therefore creating economic incentives to maintaining forests is key to saving them. Leading the effort to develop markets ecosystem services is Forest Trends, a Washington D.C.-based NGO that also organizes the Katoomba group, a forum that brings together a wide variety of forest stakeholders, including the private sector, local communities, indigenous people, policymakers, international development institutions, funders, conservationists, and activists.
(02/22/2010) In less than a generation oil palm cultivation has emerged as a leading form of land use in tropical forests, especially in Southeast Asia. Rising global demand for edible oils,
coupled with the crop's high yield, has turned palm oil into an economic juggernaut, generating us$ 10 billion in exports for Indonesia and Malaysia, which account for 85 percent of palm oil production, alone. Today more than 40 countries - led by China, India, and Europe - import crude palm oil.
(01/13/2010) The Indonesian government squandered billions of dollars in funds set aside for reforestation through corruption and mismanagement in the 1990s, raising important questions as the country prepares for the influx of money from a proposed climate change mitigation scheme known as REDD+ (reduced emissions from deforestation and degradation), warns a new report released Tuesday by the Center for International Forestry Research (CIFOR), a forest policy research group.
(12/09/2009) A rainforest tribe fighting to save their territory from loggers owns the carbon-trading rights to their land, according to a legal opinion released today by Baker & McKenzie, one of the world’s largest law firms. The opinion, which was commissioned by Forest Trends, a Washington, D.C.-based forest conservation group, could boost the efforts of indigenous groups seeking compensation for preserving forest on their lands, effectively paving the way for large-scale indigenous-led conservation of the Amazon rainforest. Indigenous people control more than a quarter of the Brazilian Amazon.
(12/02/2009) Rising demand for timber and agricultural products could work against a proposed initiative to reduce emissions from deforestation and degradation (REDD), warns a new report from the Environmental Investigation Agency (EIA). The briefing, Putting the Brakes on Drivers of Forest Destruction: A Shared Responsibility, says that investment in REDD will not be enough to protect forests if the underlying drivers of deforestation — namely consumption — are not addressed. It urges negotiators to re-insert critical text that has been dropped from the working text on REDD ahead of next week's climate change conferences in Copenhagen.
(11/27/2009) As world leaders meet to thrash out the next incarnation of the Kyoto climate agreement, the world waits with baited breath to see how greenhouse gas emissions from forests might be included. Despite the high powered nature of these important global decisions, the success of REDD will ultimately be decided by humble forest dependent communities, living in developing countries and perhaps currently oblivious to the negotiations taking place. Dr Julie Fischer, Communities Specialist on Fauna & Flora International and Macquarie Capital’s Carbon Forests Taskforce, explains why REDD will fail unless it adequately accounts for, or indeed is steered by, these communities.
(11/17/2009) Reducing Emissions from Deforestation and Degradation [REDD] programs that include landowners will conserve more habitat and ensure greater ecosystem services function than programs that focus solely on protected areas, report researchers from the Woods Hole Research Center (WHRC), the Instituto de Pesquisa Ambiental da Amazônia (IPAM), and the Universidade Federal de Minas Gerais (UFMG).
(11/03/2009) Reducing Emissions from Deforestation and Degradation (REDD), a climate change mechanism proposed by the U.N., has been widely lauded for its potential to simultaneously deliver a variety of benefits at multiple scales. But serious questions remain, especially in regard to local communities. Will they benefit from REDD? While much lip-service is paid to community involvement in REDD projects, many developers approach local communities as an afterthought. Priorities lie in measuring the carbon sequestered in a forest area, lining up financing, and making marketing arrangements, rather than working out what local people — the ones who are often cutting down trees — actually need in order to keep forests standing. This sets the stage for conflict, which reduces the likelihood that a project will successfully reduce deforestation for the 15-30 year life of a forest carbon project. Brodie Ferguson, a Stanford University-trained anthropologist whose work has focused on forced displacement of rural communities in conflict regions in Colombia, understands this well. Ferguson is working to establish a REDD project in an unlikely place: Colombia's Chocó, a region of diverse coastal ecosystems with some of the highest levels of endemism in the world that until just a few years ago was the domain of anti-government guerrillas and right-wing death squads.
(07/22/2009) Until now saving rainforests seemed like an impossible mission. But the world is now warming to the idea that a proposed solution to help address climate change could offer a new way to unlock the value of forest without cutting it down.Deep in the Brazilian Amazon, members of the Surui tribe are developing a scheme that will reward them for protecting their rainforest home from encroachment by ranchers and illegal loggers. The project, initiated by the Surui themselves, will bring jobs as park guards and deliver health clinics, computers, and schools that will help youths retain traditional knowledge and cultural ties to the forest. Surprisingly, the states of California, Wisconsin and Illinois may finance the endeavor as part of their climate change mitigation programs.
(06/29/2009) Every year, tens of millions of acres of tropical forests are destroyed. This is the most destabilizing human land-use phenomenon on Earth. Tropical forests store more aboveground carbon than any other biome. They harbor more species than all other ecosystems combined. Tropical forests modulate global water, air, and nutrient cycles. They influence planetary energy flows and global weather patterns. Tropical forests provide livelihoods for many of the world’s poorest and marginalized people. Drugs for cancer, malaria, glaucoma, and leukemia are derived from rainforest compounds. Despite all these immense values, tropical forests are vanishing faster than any other natural system. No other threat to human welfare has been so clearly documented and simultaneously left unchecked. Since the 1992 Rio Earth Summit (when more than 100 heads of State gathered to pledge a green future) 500 million acres of tropical forests have been cut or burned. For decades, tropical deforestation has been the No. 1 cause of species extinctions and the No. 2 cause of human greenhouse gas emissions, after the burning of fossil fuels. For decades, a few conservation heroes tried their best to plug holes in the dikes, but by and large the most diverse forests on Earth were in serious decline.
(06/02/2009) Accounting for roughly half of tropical deforestation between 2000 and 2005, Brazil is the most important supply-side player when it comes to developing a climate framework that includes reducing emissions from deforestation and forest degradation (REDD). But Brazil's position on REDD contrasts with proposals put forth by other tropical forest countries, including the Coalition for Rainforest Nations, a negotiating block of 15 countries. Instead of advocating a market-based approach to REDD, where credits generated from forest conservation would be traded between countries, Brazil is calling for a giant fund financed with donations from industrialized nations. Contributors would not be eligible for carbon credits that could be used to meet emission reduction obligations under a binding climate treaty.
(04/13/2009) In October 2008 scientists with the Royal Botanical Garden at Kew discovered a host of previously unknown species in a remote highland forest in Mozambique. The find was no accident: three years earlier, conservationist Julian Bayliss identified the site—Mount Mabu—using Google Earth, a tool that’s rapidly becoming a critical part of conservation efforts around the world. As the discovery in Mozambique suggests, remote sensing is being used for a bewildering array of applications, from monitoring sea ice to detecting deforestation to tracking wildlife. The number of uses grows as the technology matures and becomes more widely available. Google Earth may represent a critical point, bringing the power of remote sensing to the masses and allowing anyone with an Internet connection to attach data to a geographic representation of Earth.
(03/30/2009) Reducing emissions from deforestation and degradation (REDD) is increasingly seen as a compelling way to conserve tropical forests while simultaneously helping mitigate climate change, preserving biodiversity, and providing sustainable livelihoods for rural people. But to become a reality REDD still faces a number of challenges, not least of which is economic competition from other forms of land use. In Indonesia and Malaysia, the biggest competitor is likely oil palm, which is presently one of the most profitable forms of land use. Oil palm is also spreading to other tropical forest areas including the Brazilian Amazon.
(03/19/2009) While citizens in western countries have long paid lip service to saving rainforests, Norway has quietly emerged as the largest and most important international force in tropical forest conservation. The small Scandinavian country has committed 3 billion krone ($440 million) a year to the effort, a figure vastly greater than the $100M pledged — but never fully contributed — by the United States under the Tropical Forest Conservation Act (TFCA). Norway now hopes it can help push to include forest conservation in the successor to the Kyoto Protocol by providing funding and fostering cooperation among international actors like the UN and World Bank, as well as developing countries, to fund the creation of an international architecture which makes it possible to incorporate deforestation and degradation into a post-2012 climate regime.
