Sustainable Forest Management and markets for environmental services

Sustainable Forest Management and markets for environmental services David Brand Hancock Natural Resource Group (Australia) Global Forestry Forum

Sustainable Management of Forests • Countries vary in their priorities and perceptions of the purpose of forests • Globalisation of forests—both markets and competing ideas about SFM • Private sector capital is increasingly important • No sustainable forestry without social capital • Could the environment become a profit centre in forest management? Global Forestry Forum

Perceptions of forests vary from country to country…. Per Capita Income Sustainable Development Conservation and Protection Subsistence Economic Development Per Capita Natural Resources Source: Jag Maini, UN IPF Global Forestry Forum

Sustainable Forest Management • Do we share a set of values related to forests? • Reducing conflict and addressing equity in wealth distribution—without an equitable society, social capital breaks down • Legal and institutional framework to address inter-generational issues What do we sustain and how do we sustain it? Global Forestry Forum

How do we conserve and enhance these critical values…. Soil and Water conservation Biodiversity The carbon cycle Forests Ecosystem Health And Productivity Industry and Trade Social Benefits Global Forestry Forum

Forests and Agriculture • Forests and agriculture have often been seen as being in conflict • Can we create an integrated approach to sustainable land management? • Is there a win-win scenario? Global Forestry Forum

Global Forestry Forum

Investment and Sustainable Forest Management • Forests have been a source of capital in the past, but sustainable management implies we invest back into the forest • Growing trend towards plantation forests as native forests are depleted • How do we attract capital flows into the forest sector and ensure that capital contributes to sustainable forest management? Global Forestry Forum

A ‘natural infrastructure’ model Forests provide both goods and services Many environmental services like carbon sequestration, water purification and biodiversity conservation are unpriced, undervalued and therefore we under-invest in them Emergence of market mechanisms and price signals for environment is an important trend Global Forestry Forum

The concept of a commercial market for an environmental service.. Global Forestry Forum

Carbon Sequestration • The threat of climate change is the first global driver for an environmental service market • Forests grow by absorbing carbon dioxide from the atmosphere and storing it as wood • Many emissions regulations recognize reforestation of areas cleared in the past as a credit against emissions • Substantial work has occurred to operationalize this new product Global Forestry Forum

There is a growing technical, legal and commercial basis for forest-based carbon markets… Global Forestry Forum

Water Quality • Forests are critical to regulation of water quality, water yield and hydrological cycles • Often a disconnect between upstream land management and downstream water users—leads to inefficient capital allocation • Good example of dryland salinity in Australia Global Forestry Forum

Biodiversity • Global trend towards homogenization of ecosystems and loss of diversity • This can lead to unstable or unhealthy systems—insect and disease outbreaks, spread of weeds, loss of services like pollination and waste decomposition • Growing number of instruments to use markets for both species and ecosystem conservation Global Forestry Forum

Outlook and Conclusion • Sustainable Forest Management is leading to a different way of viewing the value of forests • A dis-functional society cannot manage its forests sustainably—need to address social issues before environmental • In a ‘sustainable society, forests will increasing be seen, and valued, as a key part of the natural infrastructure Global Forestry Forum

Sustainable Forest Management and markets for environmental services