In the past year, there has been a serious surge in big corporations pledging to deforestation-free commodities. To track companies' movement on these pledges, Ecosystem Marketplace in collaboration with CDP and WWF is launching a new platform called Supply Change that tracks private sector action against commitments. This new interactive tool launched today.
This article originally appeared on our sister site, EcosystemMarketplace.com
25 March 2015 | The earth loses more than 6 million hectares of tropical rainforest – an area the size of Sri Lanka – every year, and two-thirds of it goes to meet demand for palm oil, soybeans, beef, and wood products, according to environmental NGO Forest Trends. At the same time, new Forest Trends research finds that companies worth nearly US$4 trillion have promised to reverse their role in degrading the world’s critical ecosystems. At least one third of these new pledges were made in 2014, nearly doubling 2013’s announcements.
These private sector actions are encouraging, but how realistic are the promises? How many of these promises are being kept? What challenges are businesses encountering?
To answer that, Forest Trends’ new platform Supply-Change.org lets users track the actions that companies are reporting against the promises they’ve made – in near - real time. Initial findings are summarized in “Supply Change: Corporations, Commodities, and Commitments that Count”, an easy-to-read, 32-page report based on the project’s current inventory of over 300 unique commitments – about one-third of which are targeted for achievement this year – from almost as many companies.
Mining Supply-Change.Org’s growing dataset, the report finds that well over half of forest-risk commodity commitments are tracked from companies in the food and beverage industry. The data also shows that corporate leadership has a multiplier effect: one commitment from a major retailer (think Walmart or Marks and Spencer) spurs another three commitments from their suppliers upstream.
The project, launched by the Forest Trends initiative Ecosystem Marketplace in collaboration with the World Wildlife Fund (WWF) and CDP (formerly the Carbon Disclosure Project), combines Forest Trends’ environmental markets expertise with WWF’s experience in supply-chain sustainability and CDP’s global collection of corporate environmental data.
“Transparency through public disclosure is a valuable tool for the world to gauge the corporate community’s progress in eradicating deforestation from key agricultural inputs,” says Michael Jenkins, Forest Trends Founding President and CEO. “These new relationships that underlie Supply Change harness the strength of our complementary skills to provide investors and other decision-makers with free access to information that will accelerate the transition to a zero deforestation economy.”
“We are seeing increasing awareness of the impact on businesses of deforestation risk and recently a growing trend for commitments to combat this. We are delighted that this new initiative further underlines the need for consistent corporate disclosure to CDP on the impacts of deforestation,” says CDP’s chief executive officer Paul Simpson.
“We believe that consumers should only have sustainable choices. To accomplish this, we need to completely rethink the way products are made, from the bottom up,” says Jason Clay, senior vice president of markets at WWF. “Corporate supply chain commitments send an unmistakable signal: ‘If you want to work with our company, the environment must be top-of-mind.’ Large corporations have the greatest leverage to shift whole industries, which is why supply chain commitments are so critical to our evolution to a market place full of sustainable choices.”
The Supply Change web platform (www.supply-change.org), including pilot company profiles and an initial findings report –Supply Change: Corporations, Commodities, and Commitments that Count – will be publicly launched on March 25, 2015.
Supply Change is powered by CDP and WWF data and insights; and financially supported by the Climate and Land Use Alliance (CLUA), Earth Innovation Institute, Global Environment Facility, JPMorgan Chase & Co., the Norwegian Agency for Development Cooperation, and the World Bank’s Program on Forests.
Forest-carbon projects are now conserving as much forested land as you'll find in all of Malaysia. It's a stunning achievement, but one that needs to get big fast if we're to make a dent in global greenhouse gas emissions. Fortunately, jurisdictions like the Brazilian state of Acre are developing "jurisdictional REDD" programs to do just that.
24 March 2015 | When the Tolo River People of Colombia wanted to save their forest, they used a financing mechanism known as REDD (Reducing Emissions from Deforestation and forest Degradation) to fund their conservation by generating carbon offsets for the carbon sequestered in their trees. When the rubber tappers of the Rio Preto Extractivist Reserve (Reserva Extrativista Rio Preto) wanted to stave off deforestation in the Jacundá National Park (Floresta Nacional de Jacundá), they also tapped the carbon markets – and they soon hope to join roughly 40 other community-based forest carbon projects identified in the latest State of the Forest Carbon Markets report, which found hundreds of projects globally, covering enough forests to fill the entire country of Vietnam.
REDD is a massive conservation success – arguably the biggest of all time; but it's nowhere near big enough to halt the soaring greenhouse-gas emissions from deforestation. To really fix the mess, we must attack both demand and supply: we must, in other words, stifle our own ravenous appetite for consumer goods that drive deforestation, and we must create an environment on the ground to ensure that commodities are harvested legally and sustainably.
REDD has proven effective on the supply front, but can it be scaled up? And if so, what aspects of "project-based" REDD can work at the "jurisdictional" – or statewide level?
Isolated REDD projects have been used to rescue endangered patches of forestat around the world, but often the loggers and cattlemen who are denied access in one location simply move down the road – an activity that carbon accountants call "leakage". Project developers do account for it, and in theory they subtract the leakage from their total offsets, but the only way to eliminate leakage is to spread carbon accounting and control across entire jurisdictions.
"That's how it was always supposed to be," says Dan Nepstad, Executive Director and Senior Scientist at the Earth Innovation Institute. "No one ever wanted all these scattered, isolated projects dotting the forest, and even in the 1990s, it was a given that we needed jurisdictional programs to have a real impact."
REDD was on the United Nations agenda as early as the First Conference of the Parties (COP 1) to the United Nations Framework Convention on Climate Change (UNFCCC) in Berlin in 1995, but it had a different name: Avoided Deforestation, or "AD".
The premise, however, wasn't much different than it is now: Governments would first measure their historic rates of deforestation across their entire jurisdiction, then they'd negotiate agreement on which actions impact it, and they'd come up with a way to pay for reduced deforestation across the entire jurisdiction, with individual projects "nesting" within those jurisdictions to test new methods that work and reward early action.
The basic science was already there too, because timber companies and foresters had been using allometric equations to estimate the amount of wood in a forest for decades, and it wasn't a big leap to extrapolate the amount of carbon. The fuzzy part, scientifically, was calculating the "carbon flows" over time and determining reference levels for deforestation and then figuring out which actions could be rewarded for changing it. Socially, there were fears that sudden flows of money into the forest would accelerate rather than counter the land-grabs that were pushing indigenous people aside, or that indigenous people would be frozen out of traditional hunting grounds while cattlemen continued to chop forests at will.
To say there were loose ends is an understatement, but climate talks were there to tie them up. Yet, when the Kyoto Protocol emerged from COP 3 in Kyoto, Japan in 1997, REDD was off the UN table and relegated to voluntary markets, where it continued to evolve under real-world conditions. Over the next 15 years, carbon accounting proved to be incredibly robust, and standards like those developed under the Climate, Community & Biodiversity Alliance emerged to ensure indigenous rights. At the same time, forest communities that embraced REDD found themselves able to earn income from their stewardship of the land.
As a result, and in response to calls for pilot initiatives, individual projects proliferated – with valuable patches of forest, often at the frontiers of deforestation, being saved as swathes were being destroyed to make way for palm-oil plantations and cattle grazing.
Within the UNFCCC, REDD stayed on ice until Papua New Guinea wrangled it back onto the agenda at the 2005 Climate Talks in Montreal (COP 11) – but even then, talks languished. In 2010, REDD was the sole bright spot in the otherwise dismal Copenhagen Accord, and by 2011, governments around the world were harvesting the lessons of the voluntary carbon markets to launch jurisdictional REDD initiatives which allowed for individual nested projects within them – a process that's relatively easy from a carbon-accounting perspective.
"When we talk about setting an integrated approach for REDD+ for the Amazon states that is nested at the national level, it might seem difficult, but it's actually much simpler than trying to set the baseline for a project or smaller area," says Pedro Soares, Climate Change Program Coordinator for Manaus-based NGO Instituto de Conservação e Desenvolvimento Sustentável do Amazonas (IDESAM), which was recently hired by the Brazilian state of Rondônia to help it advance a jurisdictional REDD program there.
The UNFCCC and World Bank, however, steered clear of anything involving offsets and drifted towards purely jurisdictional approaches that left individual projects in the lurch.
Then, at the 2013 climate talks in Warsaw, the UNFCCC finally agreed on a REDD Rulebook for jurisdictional REDD that had substantially less rigor than that of voluntary markets, opening the door to a renewed interest in nesting. Also in Warsaw, the US, UK, and Norway launched a financing mechanism for jurisdictional REDD initiatives that support commodity-certification programs.
For more on nested REDD, read Peruvians Hope Nested Approach Today Will Halt Deforestation Tomorrow
For more on Acre's jurisdictional REDD program, read Acre and Goliath: One Brazilian State Struggles To End Deforestation
For more on the interplay between palm oil and forest carbon, read How A Primatologist, An Industrialist, And An Ecosystem Entrepreneur Took On Big Palm Oil And Won
Since then, nesting has come back, at least in theory. The Indonesian government, for example, said last year it was exploring the possibility of acting as a buyer of last resort for REDD offsets, which it may aggregate and sell them on the market with a state guarantee, although that program is on hold as the country restructures its REDD regime.
Back in Brazil, Rondônia's neighbor, Mato Grosso, has slashed its deforestation rates 90% and created the country's most advanced regime for keeping track of REDD payments.
By far the most innovative, however, is Acre, which has completely reinvented the jurisdictional REDD concept, with a comprehensive program that is involving indigenous people across the state. Today, nearly 90 percent of Acre's forest cover remains intact, thanks to its innovative approaches to forest management. But success moving forward for Acre will mean diminishing its dependence on an ever-expanding beef industry.
According to a 2012 study, more than 80 percent of Acre's deforestation is driven by the beef and dairy sectors, and these industries aren't going away. Beef and ranching alone supply 92 percent of the state's total export revenues, and they are expected to grow even further in the years to come thanks to efforts to intensify activities on the existing land footprint.
But Acre also became the first Brazilian state to fully implement a management plan – which divided the entire land base into geographical zones that restrict specific extractive activities; at the same time the state government supported the growth of natural rubber, furniture, flooring, and Brazil nut processing industries.
A number of forces pushed Acre into action. As reported in Ecosystem Marketplace, the 1980s saw marginalized rubber tapper communities losing their lands to ranchers and logging interests, but forest leader Chico Mendes pushed for the establishment of reserves to maintain the forest economy. His actions cost him his life in 1988, but in his absence, a movement lives on in his name.
Acre is conducting a massive experiment in jurisdictional REDD – one through which the state receives payments for reducing deforestation across its entire jurisdiction, but then distributes the money as payments for other ecosystem services – such as river maintenance – or simply to support sustainable land-use practices once common among indigenous people.
Driving it is the 2010 SISA (Sistema de Incentivos para Servicos Ambientais) legislation, which established the foundation for financing the maintenance and restoration of environmental services across the state, including a framework to establish linkages with emerging markets for environmental ecosystem services. This framework means indigenous people, rubber tappers, and small farmers can earn Payments for Environmental Services (PES) by practicing sustainable agriculture and protecting endangered rainforest. For indigenous people, SISA explicitly aims to support traditional methods of farming and forest management that have proven to be more suitable for the rainforest than are the western methods brought by the newcomers.
In 2012, the German REDD Early Movers Programme (REM) made in its first transaction – paying cash to "retire emission reductions" from avoided deforestation in Acre. Commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by the KfW Development Bank and the Gesellschaft für Internationale Zusammenarbeit (GIZ), the REM program promotes forest conservation and is designed to strengthen performance-based payments for demonstrated emission reductions – providing "bridging finance" for countries engaged in mitigating climate change.
What makes the concept of PES so promising is that it provides a potential, albeit less lucrative avenue to bring funding into an indigenous territory where the people have been good stewards to the land. Take the Igarapé Lourdes territory in Rondônia, where the prospects of earning carbon offsets are murky given that there is little actual deforestation, but where indigenous people have a proven history of maintaining the forest. Prior to the November election, Rondônia 's State Secretary of Environment launched a series of meetings in four separate municipalities to introduce the concepts of climate change, REDD+, and the potential to implement state-level regulations for REDD+.
"The former governor of Rondônia was re-elected in November, which is really good for REDD and climate issues, because he supported the Surui project," says Pedro Soares.
It's still early days for jurisdictional REDD across the rest of the Amazon states of Brazil. The first step will be to figure out how to establish, for each state, a baseline and a benefit-sharing mechanism and monitoring strategy that will fit under the national requirements.
"Under a state level law, the Igarapé Lourdes is going to receive a certain amount of credits by their forest area, and by their forest area condition," says Pedro Soares.
What that means here is that they may not have significant deforestation pressure, but they will be able to secure some REDD funding to develop their life plan, the roadmap from which their forest-sustaining economy of the future can begin.
"How we can push money into the indigenous areas, and how can we how we lead this to the market, and how will it be applied?" asks Soares. "These are the questions we are most concerned about."
Discussions about implementing jurisdictional REDD at the state level in Brazil could lead to something much bigger. A plan currently exists, led by NGOs like IDESAM, to implement a "jurisdictional" REDD system across the entire Brazilian Amazon, with a vision to eventually nest both individual REDD projects and state-level REDD within the Brazilian national government's Brazil's National Climate Change Plan, which is part of a national policy that established official Amazon deforestation targets of 80 percent by 2020. The ultimate goal is to create an integrated approach for REDD+ for the Amazon states that is nested at the national level.
The four-year-old government of Myanmar came in with a big promise to boost the economy, in part by ramping up agricultural production. But so far, all it’s ramped up is deforestation – destroying some of the most biodiverse land in the world, and then not even planting the farms it had planned to develop.
This article was originally published on our sister site, EcosystemMarketplace.com.
20 March 2015 | When Myanmar President U Thein Sein took office in March 2011, he had big plans for economic reforms. In particular, the new government wanted to promote industrial agricultural development to attract both domestic and foreign investment and to help boost the country’s economy.
Between 2010 and 2013, the land areas awarded for agriculture purposes increased at an unprecedented rate – 170 percent – and this number is likely a conservative one, as it includes only areas allocated by the central government, and not those “provincial, military, and/or non-state authorities” might have given away. To most, it seemed like the old story of short-term economic gain trumping long-term environmental – and economic – stability.
Recent research by Ecosystem Marketplace publisher Forest Trends, however, casts doubt on the efficacy of these efforts. A new report, Commercial Agricultural Expansion in Myanmar, released last week, is the first of its kind to investigate the various ramifications of these shifts in land use in the country. As it turns out, they are backfiring – on more than one level – and it is local forests and the people that live in them and depend on them that are being hit the hardest.
For one, the land that has to be made available for agricultural development is not coming from nowhere. It is coming from the clearing of forest lands – of which each year the country is now losing about 1.15 million acres. And not just any type of forest, but “some of Southeast Asia’s last remaining High Conservation Value Forests.” These are forests that are home to house a large variety of fauna and flora – things on which it is hard to put a dollar value – as opposed to the logged timber on which you certainly can, as trade statistics show: timber exports increased from 2.7 to over 3.3 million m3 in just two years (between 2011 and 2013) and the value of these exports rose from $US 1 billion to $US 1.6 billion.
Whether or not the agriculture sector is growing at the same rate as timber exports is unclear – and actually doubtful. As it turns out, of all the land the government is allocating for industrial agriculture, only a quarter was actually planted with agricultural crops. The Forest Trends report takes a particularly close look at two areas, Kachin State and Tanintharyi region, where plantings are especially low (12 and 19 percent respectively), to investigate the underlying dynamics of this phenomenon.
In Tanintharyi region, large swaths of land were designated for the planting of rubber and for oil palm development, partly to meet the domestic demand, partly for export. However, of the 1.9 million acres allocated for oil palm development, only 360,000 have been actually used for it, while it’s unclear how much rubber was actually planted.
In Kachin state on the China-Myanmar border, which has long been a focal point in the news as a result of its precarious geographic position, Chinese – and not domestic – business interests are dominating the situation and Chinese demand for agricultural commodities is the main driving factor for the increased area of land being used for commercial agricultural development. In Kachin, 1.4 million acres were designated for commercial agricultural development – but so far less than 175,000 acres have been actually planted.
The processes by which these land areas are being allocated for agricultural development are, according to the report, “rife with legal loopholes, special permits, and/or exemptions.” Restrictions that the laws may impose can easily be overridden by government authorities. As a result, while timber being harvested from these lands can indeed be considered legal, the ways in which the land areas are being allocated for agricultural development – and the consequential logging of timber – are coming more and more under scrutiny.
An important reason for this is that these processes do not have any social safeguards in place, i.e., they do not provide any way to lessen the consequences these changes in land use have for local communities that live in and depend on these forested areas. It therefore probably comes as no surprise that conflicts around land rights have increased hand in hand with the growing allocation of land areas for industrial agriculture development. Communities lose their land and have not legal recourse for claiming it – and with it the base for their subsistence – back.
If the promised and hoped-for economic growth is supposed to happen and hold up, the obvious tension between commercial agricultural development and sustainable management of Myanmar’s forests has to be resolved. For starters, the agencies that oversee both, the Ministry of Environmental Conservation and the Ministry of Agriculture and Irrigation Policy, the report argues, need to have clarified priorities and roles.
In addition, with the logging of these precious trees largely driven by the desire to export, international standards and processes – such as forest certification or the emerging Forest Law, Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA) – might be able to influence change by trying to address murky/grey areas such as the trade of timber that may have been felled as a result of dubious logging permits.