Forestry and Poverty Project Newsletter – Issue 37, July 2012

SBY’s sustainability message

President Susilo Bambang Yudhoyono got the right message for the Rio+20 conference: Sustainable Growth with Equity.  The trouble is that those who should have been listening were not.  Perhaps this doesn’t matter.  The people who will succeed in implementing sustainable development will do so because it is a life-and-death matter — not an ideological ambition.

There has been a basic tension about what sustainable development means since the first UN Rio Earth Summit in 1992.  The leading Western European countries wanted a set of global goals to protect the environment.  Developing countries insisted that sustainable development meant equal effort should be devoted to economic growth and social welfare, as well as environmental outcomes.

That debate has not changed in 20 years.  The President made clear in his landmark sustainable development speech in Bogor recently that his motto is “Sustainable Growth With Equity”.  This means eradicating poverty as well as preserving the environment.  This is his view of how a “green economy” should work. The outcome of the recent Rio conference underlined this.

But that is not the green economy that groups like WWF and Greenpeace aspire to.  WWF considers the world is consuming resources one-and-a-half times faster than the stock available.  Greenpeace wants all commercial development in agriculture and forestry stopped. In their “green economy”, the world consumes less and produces less.

That might work in the UK, the US and the Netherlands where most of their contributors live.  In those countries they are comforted by elaborate social security safety nets.  There is no question the green economy model will reduce economic growth.  But wealthy economies have the financial resources to provide welfare to support those who lose their jobs.

Well, they did until the global financial crisis. It is not clear that people in Portugal, Ireland, Greece, Spain and even Britain today will have the standards of living they are used to as the fallout from the crisis continues.

But in Indonesia, Brazil, China, India and Africa, where around 1 billion people still live below the poverty line (the World Bank estimates 40 million in Indonesia) there are no comparable safety nets.  People rely on their jobs and, when times are tough they rely on their families and communities – not governments. There are no social security cheques to cash.

The President has used falling deforestation rates in Indonesia to point out that developing countries can take concrete action to conserve the environment and still generate economic growth.

In both Indonesia and Brazil, deforestation rates have fallen. Large forest areas in both countries have been set aside for forest conservation – 35 per cent in Indonesia’s case. Like Brazil, the President has committed Indonesia to practice sustainable forestry. This means careful harvesting to enable re-growth and preservation of environmental values. Sixty-one percent of Indonesia is forested; 26 per cent of existing forest areas are available for sustainable forestry that generates wealth and creates jobs.

But this is not what the European Commission, the UK or US Governments mean when they say deforestation must be curbed.  These governments have committed to the WWF and Greenpeace position that there should be no more conversion of natural forest for commercial purposes after 2020.

In WWF’s version of the global green economy, 40 per cent of the world’s forests should be locked up.  The logic of this number has never been explained.  WWF’s own estimates of rates of global deforestation still mean that by 2050, sixty percent of the world’s forests will remain intact.  According to the FAO, forest areas in Asia are increasing, not decreasing.

The President explained in his Bogor speech in Junes that his green economy will deliver results that are pro-environment, pro-jobs, pro-poverty, and pro-growth. He is reflecting the original consensus from Rio in 1992. It is an approach that works.

He understands that wealth creation and distribution provides the capacity to protect the environment.  It doesn’t take much to work out why the greatest environmental degradation occurs where there is poverty.  It is the same reason environmental standards are higher in most developed countries: wealth is necessary to protect the environment.

This is why the attitude of so many Western Green groups is out of touch.  They think that people consume and produce too much. The merit of “conserving” things sits behind that idea: consume less or produce less and the conservation outcomes will be greater.  But leaving mineral resources in the ground does not equate to conserving a species or a forest biome.  And nor does it equate to alleviating poverty.

And it certainly does not support the President’s clear and simple “pro” sustainability approach. His speech at Bogor has been misrepresented by some media outlets as opposing further development of resource industries.  He said Indonesia should not depend only on resource industries. That is wise.  All sectors should be developed.

At the Rio conference, the President found himself in the majority.  Western Governments waved around the growth-reducing Green economy model, but the overwhelming opinion at the recent Rio meeting was just as it was 20 years ago.  Like President Yudhoyono, it was pro-environment, pro-growth, pro-jobs and pro-poverty.


Asia’s forest products sector: a leader, not a laggard

The FAO’s new State of the World’s Forests report debunks the Green myth that Western forest products manufacturers have better environmental credentials than their counterparts in Asia.

Groups such as Greenpeace and WWF have been successful in promoting a myth in Western markets that European and US-based forest product manufacturers are ‘cleaner and greener’. This has often been done in collaboration with major Western companies such as Kimberly Clark.

This year’s FAO report contains a new analysis of the world’s forest industries, broken down by geographical region – and the figures lay bare just how mythical Greenpeace and WWF’s case is.

Use of recycled, recovered and non-wood fibres in Asia currently stands at around 55 per cent, and are projected to increase to almost 60 per cent by 2025. Europe’s current utilisation is around 33 per cent; in North America it’s around 38 per cent.

Energy intensity for pulp and paper production is also lower in Asia than in developed markets. By weight or volume, Asian pulp and paper producers use 15 and 43 per cent less energy than their European and US counterparts respectively. By value, Asian producers use 15 per cent less energy.

Further, Asian forest area has been increasing at a rate far higher than anywhere else in the world; in North America it has declined (see next article). Similarly, the areas set aside for biodiversity and protection in Asia has been increasing.

Related to this, industrial roundwood removals in Asia have remained steady, while fuelwood removals and roundwood removals overall have been falling along with the deforestation rate. This adds further evidence to the case that timber for fuel, housing and subsistence are behind high rates of deforestation, not forestry.


China commits to larger forest area

China’s State Forest Administration (SFA) has renewed its commitment to increasing its forest area by 20 per cent over the 15 years to 2020 with announcements of increased funding to reforestation and afforestation projects.

China’s total forest area has increased by 61 million ha to 195 million ha since 1992 according to the SFA, an increase of around 35 per cent.

Similarly, its forest inventory has almost quadrupled to 13.7 billion cubic metres over the past two decades.

The SFA also announced that it has reduced the country’s rate of desertification by around 50 per cent across the same period.

It also stated that it will re-convert around 1 million ha of agricultural land back into forest land in the upper reaches of the Yangtze River and Loess Plateau. The aim of the afforestation in this area is to reduce severe soil erosion and increase productivity on higher-yielding croplands, replacing production on erodible sloping lands.

Despite the clear environmental gains by SFA programs, Greenpeace has made numerous claims about the state of China’s domestic forests – including that just 2 per cent of China’s forests remain intact. Last year, the protest group launched a campaign against wooden chopsticks, protested against what it called ‘illegal’ afforestation programs and has launched a broadside against afforestation and reforestation projects more broadly.


Where is the Indonesian FLEGT agreement?

More than 12 months after the initialling of the European Union’s FLEGT agreement with Indonesia and with the EU Timber Regulation looming, the European Commission needs to make up for lost time to support its FLEGT partners.

The FLEGT (Forest Law Enforcement, Governance and Trade) update presented at Chatham House in London confirmed the levels of progress being achieved by the program in Indonesia and elsewhere.

Ghana is arguably the most advanced of all countries that have entered into the FLEGT process. It commenced negotiations in 2006 and ratified its VPA in March 2010. However, two years into the pilot stage, there are still question marks over whether the licensing system will actually be operational by 2014.

By contrast, Indonesia concluded its VPA (Voluntary Partnership Agreement) negotiations in May 2011; and it is yet to be signed or ratified. However, the Commission appears to consider 2013 as a potential operational date for the licensing system according to the update at the Chatham House meeting.

More worryingly, the Commission has flagged that attempting to license smallholders and small manufacturing firms under the system presents a challenge. According to some estimates there are as many as 3,500 medium-sized wooden furniture manufacturers in Indonesia – and thousands more small firms. According to the Commission, 233 factories have been verified.

This EU Timber Regulation is slated to come into effect in March 2013.  The Commission notes that FLEGT licensed timber is “not available yet”, and that “expectations from VPA countries [are] that their timber will be “positively” received during the interim period.” However, given the promise from the EU of the benefits that the VPAs are to bring, the EU’s trading partners are expecting more than a positive reception.


World Bank still off the mark on illegal logging

A recent presentation by the World Bank at an ITTO meeting in Malaysia demonstrates that the institution is completely off the mark on illegal logging, supporting adoption of voluntary schemes to solve a declining problem.

The presentation was part of a broader workshop on developing country experiences with tracking and verification technologies.

At the beginning of the presentation, the Bank representative went through the current state of deforestation in the Asian region, noting that levels of deforestation have been decreasing significantly, even without the broad-scale implementation of voluntary certification systems.

In addition, the presentation also noted that the leading drivers of deforestation are urbanization and agriculture – not illegal logging, which is the supposed driver for voluntary certification systems.

This amounts to a tacit acknowledgement that illegal logging is not a key driver of deforestation in the region. Elsewhere, the presentation notes that mooted FLEGT agreements have prompted the development of government-endorsed legality verification systems.

Despite this, the Bank is still encouraging companies to make large commitments to verification systems that are high cost, deliver no premium and have little market recognition under new illegal logging rules in the EU, US and Australia.

Moreover, the Bank fails to acknowledge that under its operational policies, it only recognises voluntary certification under the Forest Stewardship Council (FSC), which inhibits the expansion of sustainable forestry in developing countries.

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