Forests in a Steven Stone Economics and Trade Branch, Geneva 6 th June 2011

2 What is a Green Economy? A Green Economy is one that results in increased human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.

3 Why Forests? Forests generate income and provide employment. Forests provide nutrition, reduce vulnerability and diminish energy scarcity. Trends in deforestation are still alarmingly high. The current approach to management of forests is a ‘frontier’ approach.

At present, forests occupy 31% of the world’s land area, of which 1/3 are primary and relatively undisturbed forests. Forest cover

Trends Forest cover is being rapidly lost; 13 million hectares of forests Reforestation on an upwards trend Net loss still 5.2 million hectares per year (FAO 2010) 13.5% of the world’s forests are in protected areas (IUCN categories I-VI) (Schmitt et al. 2009). Just 7% of tropical forests are managed in a sustainable way (ITTO 2006)

6 In a Green Economy… Full value of forests recognized and invested in as a source of natural capital and environmental services Public and private investments in forests are catalyzed and supported by targeted policy reforms, regulation changes and capacity building. Forests are managed and invested in as an asset class and are important factors of production. International mechanisms increase investments in forests. Forest management hinges critically on an effective and transparent accounting system.

7 Investments in the Forest Sector The Green Economy Report suggests that an average annual additional investment of US$ 40 billion is required to halve global deforestation by 2030, and increase reforestation and afforestation by 140 per cent by 2050, relative to business as usual (BAU).

8 Investments in the Forest Sector Targeted investments in forests could generate about 10 million new jobs around the world. Most of this increase occurs via an increase in small and medium sized enterprises. In the forest sector, per cent of the enterprises are small and medium sized. SMEs currently provide more than 50 per cent of forest sector employment in many countries.

9 Enabling Conditions Role of Governments Create markets and employ market-based instruments to promote green investment and innovation Guarantee adequate returns on risk-adjusted investment Devise transparent and efficient procedures Agree on a national vision for ways and means in which forests can contribute to development

10 Enabling Conditions Role of Business and Financial Institutions Investing in forest projects Providing independent, easily accessible and verifiable risk assessments Leveraging resources and providing finance Insuring and guaranteeing investment and risks particular to the forest sector FSC Canada

11 Enabling Conditions Role of the International community Agree on an international REDD+ scheme Generate knowledge on forest ecosystem services Capacity building and technological transfer

12 Success Stories India – The country recently approved a national mission for a Green India. Japan – The Metropolitan Government Bureau of Waterworks in Tokyo manages forests in the upper reaches of the Tama River to increase recharge capacity. Costa Rica – Forest related interventions have led to economic growth and a dramatic increase in forest cover. By 2010, it had recovered up to 51 per cent of the country’s land area. Vietnam - The restoration of natural mangrove forests at the cost of US$ 1.1 million resulted in annual savings of US$ 7.3 million in sea dyke maintenance.

GDP 3,574 GDP 8,719 Costa Rica

14 Conclusion Forest management cannot be left entirely to markets. Governments and the international community need to undertake policy reforms to create incentives to maintain and invest in forests. Businesses and financial institutions need to be active in promoting investments in the forest sector Thank You