Forests in a

June 2011

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.

Why a Green Economy?

A Green Economy is an economic vehicle for sustainable development. A Green Economy has strategies to end the persistence of poverty. It is a central theme of Rio+20. It is a new economic paradigm that can drive growth of income and jobs, while reducing environmental risk and scarcity.

Forests in a Green Economy

Forests are a critical link in the transition to a green economy. The International Year of Forests 2011 and World Environment Day, are unprecedented opportunities for governments, civil society and business to promote forests as critical contributions to a green economy transition via sustainable management, forest conservation and payment schemes.

Forests in a Green Economy

The UNEP report: Provides a roadmap for greening the forest sector that will contribute to the discourse in the lead up to Rio+20. Sets out options for policy makers to enable a transformation of the forest sector. Examines the conditions for significantly increasing investments in forests and the underlying goods and services forests provide.

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.

In a Green Economy
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.

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).

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, 80-90 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.

Enabling Conditions
Role of the International community
Agree on an international REDD+ scheme Generate knowledge on forest ecosystem services Stimulate engagement from the commercial financial sector Re-invest income from royalties and taxes into the forest sector

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Enabling Conditions
Role of Governments
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 Employ market-based instruments to promote green investment and innovation

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

FSC Canada

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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 countrys 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.

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Payment for Ecosystem Services

Payment for Ecosystem Services (PES) Voluntary transactions which compensate ecosystem service providers (for instance forest landowners) for providing watershed protection, carbon storage, recreation, biodiversity or other ecosystem services.
Ecuador - The local government in the town of Pimampiro pays US $6-$12 per hectare per year to a small group of farmers to conserve forest and natural grassland in the area surrounding the towns water source.

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REDD+
Reducing Emissions from Deforestation and Forest Degradation (REDD+) recognizes the role of forest degradation and deforestation in limiting GHG emissions with conservation, sustainable management, and enhancement of forest carbon stocks as eligible activities
Brazil The Amazon Fund receives conditional funding from Norway to achieve deforestation reduction targets Indonesia - In 2010, the country received a US$ 1 billion from Norway in return for agreed measures to tackle deforestation and degradation.

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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
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