global prospects for commercial plantations and
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COMMERCIALLY ORIENTED COMMERCIALLY ORIENTED PLANTATION FORESTSPLANTATION FORESTS
Brazil Brazil Chile;Argentina,Chile;Argentina,
UruguayUruguay15 million ha15 million ha
Ghana, Ghana, Nigeria ,Nigeria ,
CoteCote’’ ivoireivoire1 million ha 1 million ha
ChinaChina
30 million ha. 30 million ha.
East andEast and Ssouthern Ssouthern Africa Africa
2 million ha2 million ha
Russia17 million ha.
IndiaIndia..
3 million ha.3 million ha.
IndonesiaIndonesiaAustralia Australia
New ZealandNew Zealand15 Million ha. 15 Million ha.
USASouthern States17 million ha.
Western Europe7 million ha.
What influences demand for What influences demand for primary wood products?primary wood products?
• Expanding global forest product markets
• Population increase • Technological change• Environmental issues.
Growing Demand for Paper and Growing Demand for Paper and PaperboardPaperboard
Courtesy Jaakko Poyry Consulting
Growing Demands for solid Growing Demands for solid wood products wood products
0
100
200
300
400
500
600
700
800
1993 1998 2003 2008 2013 2018
Million m3 (actual)
Softwood lumber
Hardwood lumber
MDF
OSB
Particleboard
Plywood
Other fiberboardForecast
Courtesy Jaakko Poyry Consulting
x3
SMALL-MEDIUM SCALE FOREST ENTERPRISES
Comprise 80-90% of all forestry enterprises in many developing countries . They employ 20 million people ,add US 130 billion in gross added value to the world economy and are a major source
of off farm employment
AGROFORESTRY AND ON FARM WOOD LOTS• Nitrogen fixing trees contribute to to soil fertlity• Shelter belts increase crop yields• Reduce wind erosion of top soil• Essential fuelwood and building pole needs • A significant source of small holder income •POTENTIAL TO BENEFIT ABOUT A BILLION PEOPLE
Environmental ChallengesEnvironmental ChallengesProtection of watersheds
Biodiversity
Contribution of Deforestation to carbon emissions and global
warming
Population expansion : ( 9 billion people by 2050)
Pressure for conversion of forest lands to agriculture and biofuels
Major Sources of Global Major Sources of Global Carbon EmissionsCarbon Emissions.. Indonesia a significant emitter due to
forestry and land use change
Source: PT P.E.A.C.E., 2007 compiled from IEA’s 2005 annual statistics, US EPA 2006, and Houghton 2003. If EU included, Indonesia stands 4th. Estimate subject to uncertainty.
Energy emissions lower, but growing fast
RAINFORESTS
•Are the Earth's oldest living ecosystem.
•Cover only 6 %of the Earth's surface
•Contain more than half of the world's plant and animal species
RAINFORESTSForest Foods,
Medicines,Wildlife
Home for 300 million indigenous peoplePlay a key role in global carbon sequestarion
MAIN CAUSES OF DEFORESTATION
Currently 13 million hectares a year• Shifting agriculture 42%• Forest conversion by agribusiness and cattle ranching companies 33%
• Extensive and illegal logging 14% • Fuelwood and charcoal 11%Total 100%
Kyoto Protocol
Annex I
Non-Annex I
Not ratified
Only afforestation and reforestation are allowed under the CDM. Reduction of emissions from deforestation and degradation is not.
20 ongoing Biocarbon reforestation projects
( All under Voluntary funding arrangements)
CDM has procedural limitations
Potential to involve small holders not yet realised
Industrialized countries (“Annex I” Countries) are committed to limiting and reducing their collective emissions at 5 percent below 1990 levels by 2008 – 2012.
Emissions TradingJoint ImplementationClean Development Mechanism (CDM) the only mechanism that can involve developing countries
REPORT BY SIR NICHOLAS STERNContainment of Deforestation a cost
effective option for reducing global carbon emissions
(COP13 : BALI INDONESIA : DECEMBER 2007)
ENDORSEMENT OF THE NEED TO INCLUDE REDD , SFM AND SEQUESTRATION OF CARBON STOCKS IN A FUTURE CLIMATE REGIME
LEADING DONORS WILLING TO SUPPORT NEW FUNDING MECHANISMS :
● An REDD targeted Forest Carbon Partnership Facility already established ● A UNFCC supported proposal for creation of more broadly based Forest
Investment programme and ● A Global Forest Partnership under active discussion
POSITIVE IMPLICATIONS FOR MOBILISING UP FRONT FUNDING FOR ESTABLISHMENT OF PLANTED FORESTS
INDONESIA STRATEGY FOR INDONESIA STRATEGY FOR REDUCING DEFORESTATIONREDUCING DEFORESTATION
• ACTIONS BY PRIVATE SECTOR INDUSTRY AND FINANCIAL INSTITUTIONS
• 1. Commit to a rapid switch away from harvesting and conversion of rain forest • 2. Consider cessation of pulp wood chips exports to China . Accelerate harvesting
of already established plantations and if necessary temporarily import wood chips • 3. Rapid escalation of company /community partnerships to assist small holders to
establish oil palm and pulp wood plantations on non forest lands• 4. Within Production Forests commit to acceptance of independent certification of
all harvesting and management operations • 5. Within Production Forests initiate company driven adoption and implementation
strategies for containment of timber theft • 6 Adoption by private banks of the Equator Principles
• ACTIONS BY GOVERNMENT • 1. Engagement of local communities in management of Protected areas • 2. Protection of indigenous peoples rights .• 3. Land tenure reforms in support of community and small holder ownership • 4. Implementation of FLEG initiatives for containment of illegal logging • 5 Support for rural development activities to create alternative livelihoods for low
income communities •
Climate Change Related Investment Opportunities in the Forest Product Sector
Transportation
About 9% of emissions in FPI Limited opportunities
Plantations
Huge opportunities.Key is previous land-use.
Biofuel & Cogeneration:
Energy > ½ all emissions. Large opportunities.
Conversions
Limited emissions Limited opportunities
Waste Management
i) Post-consumer recycling. ii) Utilization of waste wood.
Large opportunities.
SFM Natural Forests
Huge opportunities.Carbon in wood harvested & avoided deforestation.
IFC Farm Forestry Related Investmentsin India (1)
Job Creation in Farm Forestry for IFC Clients in India (# farmers on left axis)
020,000
40,00060,00080,000
100,000
120,000140,000160,000
180,000200,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
WCPM
APPM
JK Paper
BILT
Carbon Sequestration Impact
2 million tons of CO2 in 2007 increasing to 3.5 million tons by 2010
(1) Covering 40% of the total farm forestry by the Indian P&P industry. These projects are generating 25%-50% additional income for 170,000 smallholder families
Plantation (Reforestation) in MozambiqueProject Concept Note
Target Over 10 years: 500,000 ha Carbon Sequestration10 million ton CO2 per year This offsets emissions from:
1.5 million cars per year
Job Creation & MDG#1 100,000 jobs
Assuming 1 job per 5 HA Most jobs fit with MDG#1
Project Cost$500 mn (all equity)
Assuming $1000 perha
Potential to sustain a major pulp export
industry Return
IRR = 13%
Role of the Climate Forest Investment Fund
Financial incentive for initiating smallholders engagement .Foster company /community partnerships
IFC RoleVery strong due to:i) Long time horizon
& ii) High CountryRisk
IDA Role Creation of rural infrastructure . Alternative
agroforestry based livelihoods for low income
families
PROVEN TECHNOLOGIES FOR INCREASING PRODUCTIVITY
• Major possibilities to apply already well researched technologies for tree breeding and clonal propagation
0
5
10
15
20
25
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40M
ean
Annu
al In
crem
ent (
m3/
ha/y
r)
1965 1972 1981 1985 1990 1995 2000'
Proof That Research Pays: Eucalypt Productivity
RSABRAZIL
TRENDS IN GLOBAL PLANTATION OWNERSHIP
1990
2005
19902005
1990
2005
0102030405060708090
Public Corporate Smallholder
South African Tree Farmer Mama Schlenga
Income from her tree farm is financing schoolfees for four children and construction of a
new house
Proportion of World Industrial Wood Supply from Intensively Managed Plantations and Farm Forestry
10%25%
40%
50%
75%
01020304050607080
1985 1995 2010 2030 2050
Percentage of World
IRW Supply
Challenges to creating mutually beneficial company/community
partnerships
Technical assistance for strengthening the bargaining power of low income
communities and small scale outgrowers( SEE IIED et al)
Larger scale pulp,paper and wood based panel Industries
Farm Forest Wood Lots
Wood &NTFP Based Small-Medium Enterprises
(SMEs)
Plantation Based Construction Grade Timber Fibre and
biofuel Supply
Investment Opportunities
Payment for Environmental
Services
Carbon
Bio diversity
Watersheds
TROPICAL DEFORESTATION UNDERLYING CAUSES (1) (2)
RURAL POVERTY AND AGRICULTURAL ENCROACHMENT SLASH AND BURN FARMING , FOREST FIRES
EXPANSION OF SUBSIDISED CATTLE RANCHING , SOYBEAN, OIL PALM, COCOA RUBBER, COFFEE AND BIOFUEL PLANTATIONS IN TROPICAL RAIN FORESTS.
FAILURE TO INVOLVE LOCAL COMMUNITIES AND SMALL HOLDERS
ILLEGAL LOGGING . NON TRANSPARENT TIMBER CONCESSION ALLOCATION POLICIES.
INADEQUATE INVESTMENT IN PLANTATION AND AGROFORESTY BASED REFORESTATION
FAILURE TO VALUE FOREST ENVIRONMENTAL
SERVICES, ESPECIALLY FOREST CARBON
(1) Intergovernmental Panel on Forests(2) World Commission on Forests and Sustainable
Development
Global Closed ForestArea
2000 : 3 billion ha2050: 3 billion ha
Emerging mechanisms to pay for carbon biodiversity & watershed protection
Improvements in Law Enforcement and governance (FLEG)
Rising per capitaincomes. Rural/Urban migration
Adoption of safeguard and due diligence policies by financial institutions and
commercial banks
Independent certification
Improved planningof road access.
PROSPECTS FOR GLOBAL FOREST RECOVERYSOME POSITIVE TRENDS.
Economic inaccessibility
Elimination of some agribusiness subsidies
Civil society initiated campaigns
Increased community and small holder ownership
Potential for a significant increase in area of plantations and spontaneous agroforestry
Increasing privatesector investment
PROJECTED GLOBAL FOREST SITUATION 2050 Global closed forest area 3.0 billion hectares
Global industrial round wood demand 2.5 billion cubic m 3
Glbal carbon sequestration 800 gigatons of carbon
Community forests for meeting local needs
1.2 billion ha (40%)Timber production 300 million m3
Carbon sequestration potential 200 GtC
Intensively managed plantation forests 200 million ha (6%)Timber production 2 billion m3
Carbon sequestration potential
120GtC.
Planted natural forests
400 million ha (14%)Timber production 1.2 billion m3
Carbon sequestraion potential 160 GtC
Protected Areas IUCN (Categories I - VI)
1.2 billion ha (40%)
Carbon sequestation potential 320 Gtc