G l o b a lE n v i r o n m e n tFa c i l i t y

GEF Roundtableon Forests

March 2002New York, USA

Forest Conservationfor SustainableDevelopmentSummary of the GEF Roundtable on ForestsJeffrey Sayer, Chair

As the health of a forest deteriorates, all of the func-tions and services it provides are threatened—fromprotecting watersheds, to providing habitats for biodi-versity, to storing carbon. The Food and AgricultureOrganization of the United Nations (FAO) currentlyestimates that approximately 15.2 million hectares offorests are lost every year, largely in the tropics. Thestructural integrity of much of the remaining forestcover has also deteriorated.

Since the 1992 Rio Earth Summit, the global commu-nity has learned that dealing with issues of forestdegradation can be much more complex thanexpected. Forest conversion and degradation aredriven by much deeper institutional and market prob-lems than was previously recognized. Despite thebold rhetoric and ambitious goals set forth 10 yearsago, most international public investments in forestconservation and forestry since Rio have not suc-ceeded in reconciling the needs of conservation withthe imperative of improving the livelihoods of peoplein developing countries. There has been an excessivefocus on establishing new protected areas and notenough effort to achieve viable and sustainableforest systems. Too little effort has gone into theintegrated management of the entire forest system toyield better environmental outcomes and improve theflow of forest products.

The value of the subsistence goods, food, energy, andlocal environmental services that forests provide arenow more widely recognized. The role of forests as asafety net for the poor is now better appreciated.

There have been changes in the forest sector.Increased community control of forests, new sourcesof capital, and expanded markets for environmentalservices offer new opportunities to achieve the goals

GEF wishes to acknowledge the Government ofFinland’s generous financial support.

GEF ROUNDTABLE ON FORESTS

Experts from around the world participated in theGlobal Environment Facility (GEF) Roundtable onForests on March 11, 2002.

Chaired by Jeff Sayer, a leading authority on forestissues, the roundtable offered a vision and set ofactions to advance the conservation of naturalforests. Representing country governments, multi-lateral agencies, private business, non-governmen-tal organizations, and academia, the panelistshighlighted ways to advance the conservation ofnatural forests and sustainable development forthe next decade.1

The roundtable discussion was held in New York inconjunction with the second United Nations Forumon Forests (UNFF). It was one of four roundtablessponsored by GEF to address critical environmen-tal and sustainable development issues as acontribution to the World Summit on SustainableDevelopment (WSSD) in Johannesburg. The round-table conclusions were presented at the ThirdWSSD Preparatory Committee meeting and at aspecial briefing for approximately 50 UNFFdelegates representing some 25 countries andinternational organizations.

GEF has already committed $1.4 billion in grantsand attracted $2.8 billion in cofinancing to assistdeveloping countries with conservation of criticalbiodiversity in natural systems, including forests.For more information, visit www.gefweb.org.

1 The term conservation includes both protection and sustainable use and management.

● The demand for environmental services is nowmore forcefully asserted, and mechanisms to payforest owners for the costs of maintaining healthyforests have been tested. However, payments forenvironmental services have not yet become amajor factor in achieving forest conservation.

● New and interesting approaches to forest conserva-tion are being developed, but most remain at theexperimental or pilot stage; few get widelydisseminated and scaled up to address the fulldimensions of the problems of forest loss.

● Transparency, accountability, and internationalstandards are gaining acceptance as indicators ofgood resource management.

● Many countries are passing control of forestresources to the private sector, local communities,municipalities, and other parties.

● Domestic demand for forest products is growing inrelation to export demand. Although public atten-tion has focused on international timber trade, thevast majority of timber is consumed locally.

● The growing number of tree plantations couldrelieve some of the pressure to log natural forests.But the resulting reduction in forest product priceslimits the profitability of investments in managingnatural forests.

● With poverty alleviation now the overriding objec-tive of all official development assistance, theimportance of forests to the livelihoods of the pooris better understood and is being addressed inforest management strategies.

● The rapid growth of global communications hashelped educate the public about major environ-mental issues such as forest fires in the tropics.The advent of the Internet, e-mail, and other digitaltechnologies have enabled widespread informationsharing on forests—but a significant proportion ofthe people dependent on forests remain isolatedby the “digital divide.”

of Rio. As the goals of forest conservation and socialand economic development converge with those oflocal and indigenous communities, integrated modelsof forest conservation and sustainable developmentappear possible. Reform of forest policies to benefitlow-income producers, strengthening of land tenurepolicies, and creation of opportunities to link sustain-able forestry to the objectives of the Rio Earth Summitconventions have the potential to yield social, environ-mental, and economic benefits. Similarly, shiftingconservation strategies from an excessive focus onprotected areas to an emphasis on managing for abalance of all forests’ values is emerging as the rightthing to do.

WHAT HAS CHANGED SINCE THE1992 EARTH SUMMIT

The roundtable participants began by noting thatmany things have changed in the 10 years that haveelapsed since the 1992 Earth Summit in Rio. Notably:

● Threats such as climate change, the globalizationof markets, and greatly increased risks posed byinvasive alien species are more widely recognized.In addition, perceptions of other threats havechanged. Today the leading cause of deforestationis attributed to state-sponsored, planned agricul-tural conversion, not unplanned shifts in land usefor agriculture.

● Countries now assert their rights to sovereigntyover their forests more forcefully.

● The decline in official development assistancehas been accompanied by a substantial increasein private capital flows in most tropical regions(except Africa).

● Greater understanding of the importance ofbiodiversity to environmental goods and serviceshas not been matched by sufficient action onthe ground.

● Interagency collaboration on forest issues hasimproved. A good example is the CollaborativePartnership on Forests (CPF), which has 12 mem-bers from international organizations, includingthe United Nations, GEF, and the World Bank.

● The three convention secretariats that emergedfrom the 1992 Earth Summit are cooperatingand are developing joint work programs forforest conservation.

● The U.N. Forum on Forests, with broad participationfrom national governments, international organiza-tions, and civil society, has forged consensus onmany contentious forest issues.

● National forest programs, national biodiversityaction plans, and poverty alleviation strategypapers are helping to integrate the objectives ofthe major environmental agreements and conven-tions at the national level.

RECOMMENDATIONS FOR THENEXT DECADE

Despite many positive developments, the world’sforests and forest lands continue to deteriorate. Thedamage is only marginally offset by the expansion offorests in developed countries and the establishmentof about 1 million hectares of tree plantations eachyear worldwide. Recent estimates indicate that asmuch as 850 million hectares of forests in the tropicsare degraded or are secondary (developed after theoriginal forest was cleared). As the populationincreases, more forestland is cleared for urbanizationand agriculture. Many roundtable participants feltthat additional, significant losses of natural forestswere inevitable over the coming decade.

Solutions to these problems are not simple. For manypeople in developing countries, the conservation ofnatural forests is simply not a priority. This realitywill not change until effective ways are found tocompensate those who bear the costs of conservingforests. Balanced economic development is neededin poor countries to improve governance, market

The Forest Principles adopted in Rio and theConventions on Biodiversity, Climate Change, andDesertification have brought about significant bene-fits for forests. The Biodiversity Convention, for exam-ple, resulted in the development and adoption of“ecosystem management” methods for forests andother natural systems. In addition, the GEF has pro-vided more than $500 million in grants for forestprograms and has adopted a program on IntegratedEcosystem Approaches that deals with forest conser-vation issues. Valuable lessons have been learnedfrom these and other innovative approaches toforest management:

● Understanding of issues relating to the devolutionof the rights and management of forests to localcommunities has greatly increased.

● More criteria and indicators for assessing thesustainability of forest management have beendeveloped, making explicit the demands ofdifferent stakeholders.

● Approaches to integrating conservation anddevelopment at the local level are now betterunderstood, although actual outcomes remaindisappointing.

● Understanding of the underlying causes of forestdegradation and loss has increased.

● Payment mechanisms for environmentalservices are being developed through a varietyof approaches.

● The need to manage forest systems within a large-scale integrated framework is now widely recog-nized. Multi-functional forest management, nowconsidered a desirable objective, may be achievedby either spatial integration or segregation at thelandscape level. The preferred option will dependon local conditions.

As international activity involving forests increases,efforts have been made to improve coordinationamong organizations:

● The present trend toward devolving control offorest management to local communities is posi-tive; however, forest owners may not find it attrac-tive or appropriate to invest in maintaining theenvironmental values of forests if they do notshare in the benefits.

● Institutions need the capacity to deal withforests as complex multi-faceted landscapes.Exactly how this capacity will be achieved willvary among localities.

● Institutions need to be strengthened to deal withresource management issues that cross nationalborders and operate at the sub-national level—forinstance, in large catchments.

● Regional collaboration is especially important inareas such as the Congo and Amazon basins andin parts of Southeast Asia.

● Capacity building at all institutional levels, whichcontinues to be a high priority, should be prag-matic. For example, in-service professional devel-opment and empowerment should be emphasizedmore than formal education and technical training.

2. Knowledge generation and assessment

A large body of information now exists on forest ecol-ogy, management, and use. Much of this information isnot available in forms that are accessible to managersand decision-makers. In addition, additional researchis needed to better anticipate future multiple stresseson forest systems. Specifically, more work is needed to:

● Identify the impacts and potential responses toforest fragmentation, invasive species, andclimate change.

● Integrate biophysical research with work on institu-tions (broadly defined to include organizations,laws and norms, and tenure issues), economicpolicies, and policies in other sectors.

● Investigate potential markets for ecological services.

mechanisms, institutional capacity, and finance.2

A transition from overlapping and insecure propertyrights to clear and secure property rights is alsoneeded. None of these requirements are likely to bemet quickly. In the meantime, the risk is that mostproject-level interventions will tackle the symptomsrather than the underlying causes of forest degrada-tion and loss.

Notwithstanding the sober assessment of the situa-tion, the roundtable participants did find severalgrounds for guarded optimism. In particular, theynoted the need for more pragmatism and realism indealing with forest issues. They specified four areasthat are critical for enhanced forest conservation:

1. A new generation of institutions withthe capacity to deal with the complexityand unpredictability of forest systems

Most formal institutions deal with forests in highlysectoral ways. We must develop a new generationof institutions that can “manage across jurisdictions,”from the sub-national level to the international level,and deal with forest problems in an integrative, holis-tic way. A key objective must be to balance the alloca-tions of land for different types of forest and non-forest uses. The creation of more complex “integrativeinstitutions,” which have often proven to be bureau-cratic and lacking in accountability, is not necessary.

Principles underpinning institutional options include:

● Inter-institutional coordination should be informaland not based on heavy administrative structures.Mechanisms such as the Collaborative Partnershipon Forests, for instance, are viewed as appropriateresponses at the international level.

● Greater integration of resource managementshould be sought at decentralized levels, in keep-ing with the principle of subsidiarity. Decisionsregarding resource management should not takeplace at higher hierarchical levels than necessary.

2 Economic development normally leads to agricultural intensification andexpansion of off-farm employment, which normally lessens the pressure onforests. However, technological innovation in agriculture in developing coun-tries has often led to rapid expansion into previously forested areas.

● Broaden and deepen research beyond specificsectors.

● Disseminate information on new approaches toforest conservation so that innovations can bereplicated and scaled up.

● Gather more information on factors that influencethe flow of goods and services from forests to sup-plement FAO’s work. The Millennium EcosystemAssessment, the most extensive study of theworld’s ecosystems and their contributions toeconomic development, has the potential tomake major contributions in this area.

● Expand knowledge sharing among field practition-ers by arranging exchange visits to sites of innova-tive projects and by expanding efforts to breakdown the “digital divide.”

3. Effective financial arrangements

Since 1992, communities, governments, NGOs, bilat-eral and multilateral organizations, the private sector,and others have experimented with new mechanismsfor financing forest conservation. Resources have beenchannelled within developing countries and fromdeveloped to developing countries; however, thelong-term sustainability of project-type interventionscontinues to be a problem.

The GEF and other multilateral institutions can playan important role in working with governments todevelop new financial mechanisms by:

● Providing grant funding to encourage experimenta-tion and innovation and to protect against risks inthe early development phases of new approaches.

● Experimenting with cross-subsidization policiessuch as levying of fees on timber extraction togenerate funds for forest conservation.

● Disseminating lessons on what works, what doesnot work, and why.

Because forests serve multiple functions, improvingforest management at the landscape level is likely toinvolve a variety of financial flows. For instance,different patches in a mosaic may receive fundingfrom different sources. In some cases, public/privateor private/community approaches may be required.However, because 70 percent of forestland is currentlyowned by the state in developing countries, govern-ments will continue to play a large role.

Consortia involving the private sector, conservationorganizations, and local communities are a possibilityto address shared priorities for forest conservationand management. Some experiences with these sortsof arrangements in the Congo Basin were noted. Asingle focal point might serve a coordinating func-tion—for example, integration of plantations andnatural forests in Brazil by Klabin and other largepulp producers.

Funds from any arrangements negotiated to sequestercarbon as a climate change mitigation measure mustbe used in ways that do not further increase the pres-sures on natural forests. Various arrangements tocapture co-benefits should be further explored.

Perceived high risks, in particular risks created byweak or insecure property rights, have discouragedprivate-sector investment in forest conservation indeveloping countries. Measures are needed to:

● Provide guarantee funds to buy down the risk.

● Use official development assistance to catalyzeprivate financial flows.

● Compensate developing nations for the “existence”value of forests, as in Costa Rica.

Economic development policies relating to agricultureand industrialization are likely to have a greaterimpact on forest conservation than direct funding forconservation programs.

4. Greater involvement of the privatesector in solutions

The private sector, especially forest industries, hasoften been perceived to be a major part of the problemof forest mismanagement. Roundtable participantsagreed that enlisting the private sector as part of thesolution is essential and feasible. The full potential ofmany future international mechanisms, such as thosebeing developed within the climate change conventionto finance the global benefits of environmental serv-ices, will only be realized with the full participation ofthe private sector.

Two measures could help:

● Use of independent certification of forest productsas a tool to encourage sustainable forest manage-ment. However, some certification schemes havelimitations and weaknesses or do not apply insome important markets.

● Eliminating unfair competition—for example,international initiatives to curb trade in timberfrom illegal logging operations.

CONCLUSION

The overall conclusion of the roundtable was thatmuch has been learned since the 1992 Earth Summit.We now know the reasons for forest loss, and weknow that such loss will continue unless significantlyincreased resources are put into payments for environ-mental services and direct conservation measures.Leaders and participants at the WSSD are urged torecognize the severity of this problem and to committhe resources required to act on, and scale-up, allthe valuable lessons of the past 10 years.3

Jeffrey Sayer, Senior Associate at the World Wide Fundfor Nature, is former Director-General of the Centerfor International Forestry Research in Indonesia.

3 Four background papers and one main discussion paper contributed to thework of the roundtable:

1. Alien Species: A Global Threat to Forest Ecosystems by Ian A.W.MacDonald and Brian van Wilgen on behalf of the Global InvasiveSpecies Program.

2. Forest Ecosystem Services: Can They Pay Our Way Out of Deforestation?by Robert Nasi, Swen Wunder, and Jose Campos.

3. Forest Certification and Biodiversity: Opposites or Complements? by theSecretariat of the International Tropical Timber Organization.

4. Applying CDM to Biological Restoration in Developing Nations: KeyIssues for Policy Makers and Project Managers by Thomas Black-Arbelez.

5. To Johannesburg and Beyond: Strategic Options to Advance theConservation of Natural Forests by Andy White, Augusta Molnar,Alejandra Martin, and Arnoldo Contreras-Hermosilla of Forest Trends.(This main discussion paper synthesized key points from the backgroundpapers, reflected them in a broader forest context, and provided a for-ward-looking perspective.)

Jeffrey Sayer, SeniorAssociate, World Wide Fundfor Nature (WWF), Chair

Jeffrey Burnam, DeputyAssistant Secretary of Statefor Environment, USA

Henrique-Brandáo Cavalcanti,President, IntergovernmentalForum on Chemical Safety(IFCS)

Mohamed T. El-Ashry, CEO &Chairman, Global EnvironmentFacility (GEF)

Hosny El-Lakany, AssistantDirector-General, Head,Forestry Department, Foodand Agriculture Organization(FAO)

Manoel Sobral Filho,Executive Director,International Tropical TimberOrganization (ITTO)

Habiba Gitay, Senior Lecturer,Environment Management &Development, AustraliaNational University

Dan Janzen, Professor ofConservation Biology,University of Pennsylvania

Jean Jacques Landrot,Secretary General, Inter-African Forest IndustriesAssociation

Thomas E. Lovejoy, ChiefBiodiversity Advisor, TheWorld Bank

Jag Maini, Head, UnitedNations Forum on Forests(UNFF)

Jo Mulongoy, Principal Officer,Convention on BiologicalDiversity (CBD)

Maria Norrfalk, DirectorGeneral, National Board ofForestry, Sweden

Giuseppe Raaphorst, Director,Nature Conservation, Ministryof Agriculture, NatureManagement and Fisheries,Netherlands

Jeffrey Vincent, Professor ofEnvironmental Economics,University of California

Robert Watson, ChiefScientist and Director, TheWorld Bank

Tensie Whelan, ExecutiveDirector, Rainforest Alliance

Andy White, Director, ForestTrends

THE WORLD SUMMIT ON SUSTAINABLE DEVELOPMENTAND THE GEF

The World Summit on Sustainable Development

(WSSD) will focus world attention on global

progress toward sustainable development and pro-

vide strategic direction for the 21st century. Tens

of thousands of heads of state, government offi-

cials, leaders of the NGO and business communities,

and representatives of civil society groups are

expected to attend the Summit in Johannesburg,

South Africa, August 26 to September 4, 2002.

By formal resolution, the U.N. General Assembly

has invited the GEF to participate fully in the

Summit, including the review of Agenda 21, the

global action plan for sustainable development

that was adopted at the 1992 Earth Summit.

The General Assembly’s request that the GEF be

involved in the WSSD reflects well on the GEF’s

potential to bring about positive change. In the 10

years since it was created, the GEF has allocated

$4.2 billion in grants and leveraged an additional

$11 billion in cofinancing. GEF supports more than

1,000 projects in 160 developing nations and coun-

tries with economies in transition. A recent

assessment by an independent panel of experts

finds that the GEF has been a “catalyst for innova-

tive programs” and has produced “significant

results” to improve the global environment.

Panelists

GEF Roundtable on Forests, March 11, 2002

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For more information contact:

Hutton Archer

Senior External Affairs Coordinator

Global Environment Facility

1818 H Street NW

Washington, DC 20433

Tel: 202 473 0508

Fax: 202 522 3240

www.gefweb.org