REDD at risk: Might international market drivers and LULUCF rules

undermine REDD?Side event

Host: Environmental Investigation AgencySpeakers: EIA, National Wildlife Federation, Rainforest Action

Network, World Resources Institute

2 November 2009, Barcelona climate talks

International commodity markets as drivers of deforestation and

degradation: case studies

Andrea Johnson

Environmental Investigation Agency

International drivers: the concerns

• Scale of commodity markets is enormous: Timber markets alone over US$ 220 billion annually

• Markets for wood products and agricultural commodities for most part are “no questions asked” w/r/t environmental or social impacts

• Drive deforestation/degradation

• Undermine governance structures and laws

Connection to climate policy

• Policy incoherence and perversities, e.g. the direct & indirect land-use impacts from biofuels

• Reducing credibility for REDD plans

Case study: Deforesting Papua

in the Name of Climate

Change?EIA & Telapak’s

Investigations into Papua’s Plantations Boom

By Jago Wadley, Senior Forest Campaigner, EIA UK

Biofuels and carbon debt

Fargione et al, 2008

Papua Forest Cover

Papua holds the biggest areas of remaining forests and peatlands in Indonesia. This is a globally significant cultural, biodiversity, and climate asset

Indonesia’s Plantations Boom

• Central government policies are promoting massive plantations expansion in Indonesia. Oil palm is to be increased from 7 to 20 million hectares.

• The plantations boom is being promoted under the banners of development, and climate change mitigation through production of biofuels.

• A raft of measures to facilitate and hasten plantation licensing have been rolled out to the provinces.

Green Biofuels

• Indonesia is seeking to profit from supplying biofuels to the global market, and has denied biofuels production means deforestation.

• “In terms of biofuel the government will use already converted land or bare land. It will not use natural forest” Secretary General of the Ministry of Forestry, 2007

• “Indonesia will not sacrifice any trees to develop biofuel plantations.” Rachmat Witolaer, Environment Minister, 2005 – 2009.

Targeting Papua’s

Frontier Forests

• Because Sumatra and Kalimantan are already depleted, Papua and West Papua provinces on New Guinea island are being targeted for this program.

• "After Sumatra and Kalimantan became too dense for new palm oil plantations, the only land available is in Papua” (Director General for Plantations at the Indonesian Ministry of Agriculture, May 2008.)

• 2007 plantations licensing regulation stipulates plantations can be twice as big in Papua as in any other province, up to 200,000 hectares for one company.

The Consequences of

Indonesia’s Policies

• Since 2007, 5 million hectares of Papua have been targeted for oil palm and industrial timber plantations.

• Several companies are seeking 1 million hectares each, by setting up numerous purpose vehicle companies.

• Many of the companies involved are already responsible for massive deforestation for oil palm and pulp and paper across Indonesia, or produce huge emissions from oil, gas and coal production.

• These companies are often very influential, having close ties to the highest echelons of political power.

Conversion Forest

• 9 million

hectares, or

30% of Papua

is classified as

conversion

forest.

Deforestation & the

“Green Gold” of Biofuels

Facts on the ground contradict the government’s claims on biofuels.

• Companies investing in Papua are specifically citing global demand for biofuels as the very reason for plantation development

• E.g. One company planning to clear 200,000 hectares of largely virgin forest says ““For the good future of people and environment, the XXX Group aims to improve the forest area by replanting oil palm trees”.

• Demand for the company’s biofuels is “due to the commitment of most industrialized countries to reduce green house gas emissions.”

Forest Governance

• Forest governance is poor and deforestation is correspondingly high.

• Corruption & political issues relating to Papua result in woeful lack of transparency, elitism, and forest sector crime. Unclear regulations on land use that are exploited by companies

• EIA/Telapak found Plantations are being opened up from Papua’s natural forests without the relevant permits

• One company committing such crimes is financed by government loans.

• Impunity for logging and plantations companies is the norm

• The Military openly operates in the forestry sector, despite the government’s pledge to stop military businesses by this year.

Illegal Oil Palm Plantations

• This Plantation in West Papua is Illegal.

Companies and government are

Exploiting Papuan Landowners

Companies and government descend on ill-prepared tribal villages and exhort oil palm, directly linking promises of the development benefits villagers seek to the release of their lands.

Landowners talk of receiving pressure from companies and the government, and having to negotiate hard for compensation.

“Good will” payments made on initial agreement to release lands. Papuan land owners are receiving as low as US$ 1.5 per hectare. Best deal encountered = US$ 45 per hectare for 35 years.

Communities managed to retain copies of contracts in only one of five plantations visited. One of the two contracts was thumb printed.

Many communities complain promised benefits have not been honoured.

In one plantation, children as young as four have “signed” contracts locking them into multi decade lease agreements.

Climate Policy

& the future of Papua

• International policies on climate change must explicitly ensure there are no incentives for clearing natural forests for plantations or biofuels.

• Forest and trade governance must be explicitly built into climate policies seeking to reduce deforestation

• The option of REDD is positive in principle but needs to ensure free and prior informed consent of communities and indigenous peoples is guaranteed.

• Without these safeguards, Papua's globally important forests will be cleared for oil palm and other biofuels feedstocks in the next 5 years.

Up For Grabs

• EIA & Telapak will release a report on Papua’s plantations boom in Jakarta on the 10th

November.

• For more details, please contact:

Jago Wadleyjagowadley@eia-internatioal.org

Or

Faith Doherty:faithdoherty@eia-international.org

Biofuels: a carbon accounting scandal

• all bioenergy is carbon neutral: LULUCF accounting does not account for changes in emissions from land use when biomass for energy is harvested or grown

• Will definitions (“forest”, “deforestation”) and plantation safeguards prevent the same from happening under REDD?

Case study: Illegal logging –

systemic governance

failure and crime, demand-side

solutions

Illegal logging

• Dadf

Policy in consumer countries

• Voluntary corporate actions

• Government procurement policies

• Bilateral agreements (VPAs; Peru FTA Annex)

• National laws (US Lacey Act; EU proposal; Australia?)

• An International framework?

Illegal timber trade policy & REDD

• Changes risk-benefit balance and incentives for private actors all along supply chain

• Increases transparency in forest/trade sector

• Supports sovereign laws and governance improvements in tropical forest countries

• Supports broader civil society engagement in governance issues of direct relevance to REDD

• Reduces leakage and displacement risks

International drivers: lessons

• Keeping REDD planning and implementation solely within forestry ministries is recipe for trouble

• Keeping REDD readiness and policy reform solely within REDD countries is recipe for trouble

• Power of enormous existing commodity markets and supply chain reform should be brought to bear

• Government leadership is needed to shape laws and policies that guide markets towards legal and sustainable consumption

Finally

• REDD readiness should not be an exercise only in tropical forest countries, but in ALL countries that contribute to driving deforestation, degradation and illegal activity

• The UNFCCC can reinforce efforts to address drivers and promote legal trade by including language within the Copenhagen text