Global Seminar Session on Forests and Biodiversity Sustaining Forests Global Seminar Session on Forests and Biodiversity Gerhard Dieterle Forest Adviser

Why are Forests Important 1 Forests are important for rural livelihoods and poverty reduction Why are Forests Important 1 1.2 billion dependent on agroforestry resources 350 million highly forest dependent communities 60 million totally dependent (indigenous people)

Why are Forests Important 2 Contribution to Economic Development Global trade in wood products is approximately US$ 130 billion and for select non-wood forest products approximately US$ 19 billion Private sector investment is 8 billion (compared to ODA 1.7 billion) Small to medium wood-based enterprises are an important source of off-farm employment Why are Forests Important 2

Contribution to Environmental Protection Why are Forests Important 3 80% of biodiversity is found in tropical forests (deforestation results in the loss of 2-5% of global biodiversity per decade) Forests act as a sink for as much as 46% of terrestrial carbon stores (annual forest loss contributes 20-30% of carbon emissions) Forests protect watersheds and reduce risk of natural disasters Why are Forests Important 3 per decade

Community participation in decision making and implementation We know that 45% of forests are projected to have community involvement by 2015 Key Issues 4

Key Issues 5 Poverty Reduction Forests are a source of livelihood and safety net Forest Revenue Forest revenue is often not property captured. Affecting sustainable production and resource use $5 billion lost per year to Bank client countries because of uncollected royalties and taxes on legal logging operations Several countries lack the macropolicy context for sustainable investment Need a dual approach (both production and protection Environmental Services Forest environmental services are often undervalued Forest Governance Several countries lack enabling institutional, legal and policy frameworks Key Issues 5

Rising global trade in forest products is creating opportunities and risks for SFM Key Issues 6

WHAT THE BANK IS DOING TO ADDRESS THESE KEY ISSUES 7

Harnessing the potential of forest to reduce poverty Improving livelihoods of 500 million people dependent on forest and tree resources Integrating forest in sustainable economic development Improving forest concession management Reducing illegal logging. Increasing government revenues from forests by USD 2.5 billion per year Protecting vital local and global environmental services and values Bringing 50 million hectares (ha) into new protected areas Improving management of 50 million ha of protected areas Improving management of 200 million ha of natural forest The Forest Strategy: the three equally important and interdependent pillars. The strategy integrates global, national, local and individual needs 8

World Bank Instruments 9 Loans Investment loans Policy Loans (DPLs) Adaptable Program Loans Grants Global Environmental Facility Analytical work Country Environmental Analyses Assessing the impact of policy reforms Policy Research Report on tropical deforestation Knowledge Management Training Toolkits World Bank Instruments 9

Policy Loan: An example 10 Natural Resource Management Development Policy Loan in Gabon. This loan supports the Government’s efforts to improve transparency and law enforcement for NRM. Supports implementation of Gabon’s Forest, Fisheries, Biodiversity and Environment Sector Program and Extractive Industries Transparency Initiative. The DPL covers four policy areas: (1) forests; (2) biodiversity-environment; (3) fisheries; and (4) mining-oil. With regard to forest and biodiversity, the DPL will capitalize on the recent wave of reforms to ensure that they take hold and are deepened. This operation will help improve the investment climate by leveling the playing field and providing clear rules of the game in favor of more socially and environmentally responsible investors. Policy Loan: An example 10

Investment Loan: An example 11 Mexico Community Forestry Project (An Investment Loan that used a CDD approach) This investment project assists communities in developing and marketing forest and non-forest resources in order to increase their income. It exemplifies several good practices such as a detailed social and cultural analysis of the project site, recognition of the importance of forest resources and diversification of income, and the strengthening of the private sector for efficient service delivery. Investment Loan: An example 11

Adaptable Program Loan: An example 12 The Forestry and Agroforestry Development Program (PROFORESTAL) in Nicaragua. A two-phase program. During this program donor support will be increasingly coordinated and pooled, critical institutional reforms will be completed, the forestry private sector will be strengthened, forest-related businesses will be developed, best practices in both use and conservation of forests will be scaled up, biodiversity will be protected and significant contributions will be made to alleviate poverty in the poorest rural areas of the country through income and employment generation. Adaptable Program Loan: An example 12

Bank Partnership Programs 13 Poverty Alleviation Economic Development Conservation of Environmental Services Creating an enabling environment for SFM Implementing SFM Improving Governance for SFM Bank Partnership Programs 13 WB-WWF ALLIANCE

Governance: forest sector reform (i.e. Institutional and fiscal) A multi-donor trust fund established in 2002 to address these thematic areas: Livelihoods: measuring forests’ contribution to poverty alleviation; promoting community ownership of forests Governance: forest sector reform (i.e. Institutional and fiscal) Innovative financing: responsible private sector investment and collaboration with small holders and communities; payments for environmental services Cross Sectoral Co-operation: assessing the impact of DPL; integrated management of forests, agriculture and economic development (landscape or ecosystem approach) Governance in a broad sense – including forest law enforcement DPL = Development Policy Lending Program on Forests 14

Project Portfolio: 21 Projects with 10 in the pipeline Combination of global, regional and national level Depicted below are the national and regional level activities Program on Forests 15 Brazil Cross-sectoral Cooperation (1) Russia Governance (1) PROFOR became operational at the World Bank in January 2003 – since then, 23 projects have been included in the portfolio, 21 of which have been initiated. You will notice the breakdown It is important to clarify that these projects are very diverse in nature, however the majority fall into the category of either country-level input to a national forest policy process, workshops for exchanging knowledge, and studies to assess the state of knowledge on key topics. Regional are 2 in LAC and 1 in Africa National are India, Kenya, Russia and Honduras (now China, (possibly Brazil and Guyana) It is important to note that some of the global activities build on national level case studies. India Livelihoods (2) Governance (1) Honduras Governance (1) China Financing SFM (1) Guyana Cross-sectoral cooperation (1) Kenya Financing SFM (1) Latin America Financing SFM (1) Africa Region Financing SFM (1)

WB-WWF Alliance Approach/ Achievements 16 Phase I: April 1998 – December 2005 A strategic partnership designed to significantly reduce the rates of loss and degradation of the world’s forests working with governments, private sector and civil society. Achievements to date: Establishing 50 million hectares of new protected areas Supporting improved management for 70 million hectares of existing protected areas, Bringing 22 million hectares of commercially harvested forests under credible third party certification systems Completion by QACC Mainstreaming HCVF Funds provided by Netherlands, Finland, Germany, Norway, Switzerland, WWF donors and DGF WB-WWF Alliance Approach/ Achievements 16 funds provided by different bi-lateral donors (such as the Netherlands, Finland, Germany, Norway, Switzerland), WWF country programs and the Development Grant Facility).

WB-WWF Alliance Outlook 17 Phase II : January 06 – December 2010 Targets to achieve a 10% reduction in the rate of global deforestation through: 25 million ha of new protected areas established to closing gaps in representation of the World’s highly threatened forest types; 75 million ha of existing forest protected areas under demonstrably improving management; and 300 million ha of forest outside protected areas under improved forest management through a combination of independent forest certification, stepwise approaches. Expected funding from GEF Secretariat, Foundations and bi-lateral donors and other WWF donors. WB-WWF Alliance Outlook 17

Forest Law Enforcement & Governance 18 Approach: A coalition of gov’ts, int’l organizations, NGOs and private sector in producer and consumer countries fostering collaboration for action against illegal logging, associated trade, and forest corruption Link to broader governance programs of the WB and other donors, with impacts beyond the forest sector Ongoing activities include: Ministerial Conferences resulting in a Ministerial Declaration and Indicative Action Plan (East Asia 2001, Africa 2003, ENA 2005, LAC under discussion) to create political commitment Follow-up actions at national, regional and international levels to address: Poverty related issues Trade related issues Forest law enforcement Broader governance failures Development of a corporate approach for FLEG Forest Law Enforcement & Governance 18

Forest Law Enforcement & Governance 19 Highlights of the ENA FLEG Declaration Accepted by acclamation by 45 countries Differentiates between poverty driven and commercial illegal logging and addresses both in a balanced way Emphasis on development of national illegal logging action plans Forest Law Enforcement & Governance 19

International efforts to sustain forests: Some examples 20 International Dialogue on Forests (UNFF) CPF: The collaborative partnership on forests FAO: National Forest Programs CIFOR: International Forestry Research ITTO – working with producer and consumer countries ICRAF – World Agroforestry Center IUCN – landscape approaches International efforts to sustain forests: Some examples 20

Scale up successful models for community ownership and small-holder involvement. Apply landscape-based approaches in improving rural livelihoods and addressing deforestation Mainstream biodiversity conservation in productive landscapes Address complex institutional, governance and land tenure issues in Bank operations Work with producer, consumer and transitory countries across regions to achieve sustainable SFM and production Mobilize responsible private sector investment Conclusion Priorities for Future Bank Involvement in the Forest Sector 21 Global nature of some forest problems requires complementary, innovative tools to traditional Bank project work Innovative lending/non-lending products are: PES, carbon trade, mainstreaming of biodiversity in productive landscapes, integrated landscape based management of natural resources CASs and PRSPs can not fully capture global dimension of forest problems Illegal logging and trade demand cooperation across countries and regions. Additional BB for these purposes is well spent money