2. Jump to first page International Forest Policy Helsinki, August 8th, 2006 Sustainable Forest Management: Need for International Policies Markku Simula University of Helsinki Department of Forest Economics

3. Jump to first page Outline of the Presentation 1.Global perspectives 2.Need for international policy on forests 3.Policy instruments 4.International regulatory framework 5.Governance 6.Problems and barriers to international policy development 7.Need for national action 8. Conclusions

4. Jump to first page Some Basic Global Facts n About 48% of the world’s forest cover is in Europe, North America and Oceania, the rest in developing countries n About 73% of the industrial roundwood removals are produced in developed countries n About 74% of the world imports of wood-based products go to developed countries, about 81% of exports come from there  But the latter figures are bound to change (as a result of plantations)

5. Jump to first page Globalization and Forestry - Selected Aspects n Global awareness of environmental and forestry problems, greening of values n Weakening role of nation state n Increasing international regulation n Liberalization and expansion of international trade n Increase in foreign direct investment (FDI), relocation of processing n Concentration of ownership of industry and distribution channels n Global standardization of global actors n Monitoring of financial flows and increased transparency n Increasing role of stakeholder groups (NGOs, industry, forest owners, etc.) through global networking

6. Jump to first page Forest Policy Idiosyncracies n Genuine conflicts of interest between stakeholders (environmental, social and economic interests): calls for more protection but also for poverty reduction, income and employment creation n Need for land: agricultural expansion based on forests as the land reserve n Calls for increased international regulation but also for increased liberalization n Calls for public support to SFM but also for reduced public funding to SFM n Transfer of ownership and management to private sector and communities and calls for better control n Diverging interests between investors and nations n Many conflicts have an international dimension (incl. use of “foreign card”) Idiosyncracy = characteristic peculiarity

7. Jump to first page Need for International Policy: Public Goods Forests provide public goods (biodiversity maintenance, watershed protection, mitigation of climate change, amenity) Public goods are not compensated by the market  They are non-excludable, non-rivalry  They are outcomes rather than “goods” (or “services”) Beneficiary dimensions:  intergenerational  nations  income levels Key problems:  maintenance  free riders  trade-offs

8. Jump to first page Types of Policy Instruments 1.Substantive policy instruments (direct government intervention) Legislation and other regulation (e.g. taxation) Legally binding commitments (e.g. EU emissions) Non-legally binding commitments (e.g. UNCED Forest Principles) Financial (taxation, subsidies, etc.) Informational (training, communication,extension) 2.Procedural policy instruments (indirect impact by government) Criteria & Indicators (C&I) for SFM National Forestry Programmes 3. Voluntary instruments by the private sector Certification (voluntary market based) Codes of conduct

9. Jump to first page International regulatory framework Sustainable Development

10. Jump to first page International regulatory framework Sustainable Development Trade (WTO) - tariffs - non-tariffs barriers - intellectual property rights - phytosanitary measures - public procurement - subsidies

11. Jump to first page International regulatory framework Sustainable Development Trade (WTO) - tariffs - non-tariffs barriers - intellectual property rights - phytosanitary measures - public procurement - subsidies Environment - biodiversity (CBD) - climate change (UNFCCC) - desertification (CCD) - wetlands (Ramsar) n

12. Jump to first page International regulatory framework Sustainable Development Trade (WTO) - tariffs - non-tariffs barriers - intellectual property rights - phytosanitary measures - public procurement - subsidies Environnement - biodiversity (CBD) - climate change (UNFCCC) - desertification (CCD) - wetlands (Ramsar) Forests - CITES - ITTO

13. Jump to first page Summary of Instruments and Processes

14. Jump to first page Governance Change n Shift from OLD governance (command and control approach); largely failure n to NEW governance (coordination and coherence among a wide variety of private and public actors with different purposes and objectives) because of complexities n Likely optimum: mixture of OLD and NEW; problem of finding the balance n Broadening the range of “policy makers” n Policy learning becomes important through networking, accountability and responsiveness

15. Jump to first page Forest Governance Concepts n International forest deliberations n National forest programmes n Third-party auditing, forest certification and related instruments to address market and public demands n Decentralization n Devolution of public rights (privatization, community management) n Self-organization

16. Jump to first page Problems of Current International Framework Multitude of instruments and forums with specific objectives Fragmentation of the international forestry regime Weak central forest policy forum (UNFF) Ad hoc initiatives to fill the vacuum; continuously changing agenda (IFM, SFM, ecosystem management, landscape restoration, etc.) Lack of adequate funding mechanism for SFM

17. Jump to first page International Financing of SFM n Weak information: private sector about USD10 billion, official development assistance (ODA) about USD 1.8 billion per year n ODA flows through bilateral agencies, development financing agencies, international organizations n Fragmented financial architecture: NFP Facility, PROFOR in World Bank, ITTO Bali Partnership Fund, GEF (OP 15), etc. n Calls for Global Forest Fund from new and additional resources but limited support among sources of funding  More important than ODA volume is effectiveness in its use and how private sector flows can be directed to SFMs

18. Jump to first page Additional Barriers to International Policy Development n Sovereignty issues n Equity issues n Special case: USA n Stakeholder conflicts of interest n Political will, vested interests

19. Jump to first page National Action for International Policy n International agreements/commitments are to be implemented and progress to be reported (compatibility with national priorities and situations) n Need for interagency coordination (different agencies responsible for different instruments/processes) n Integration of action through NFPs n Continuous reworking of comparative advantage and carving of market niches at national level

20. Jump to first page Conclusions n Need for stronger international forestry regime, continuous challenge n Need for a strong, coordinating policy forum n Poverty linkage n Stakeholder education and participation n What next in fashion? (post-MDG)

21. Jump to first page Thank You and Good Luck with the Course markku.simula@ardot fi