1. STORABLE, RENEWABLE RESOURCES Deforestation

2. Learning Objectives After this topic you should be able to Discuss the extent of the problem of deforestation and its impact on the global environment Outline the major causes of deforestation Sources of inefficiency in the harvesting decision To analyse how public policy and international action can ameliorate these effects locally and globally

3. 1. Forest Coverage – 1990-2015 Even though, globally, the extent of the world’s forest continues to decline as human populations continue to grow and demand for food and land increases, the rate of net forest loss has been cut by over 50 per cent. 31.6 per cent of global land area was forested in 1990 compared to 30.6 percent1 in 2015. More than 60 per cent of the worlds forests are in 7 countries ( Brazil, Canada, China, Indonesia, Russia, US and Zaire) Primary forests, especially tropical forests are key to maintaining biodiversity and in stabilising climate change (external benefits) http://www.fao.org/3/a-i4793e.pdf

4. Trends in Forestry There was a net loss of some 129 million ha of forest (natural and planted) from 1990 to 2015, representing an annual rate of –0.13 per cent and a total area about the size of South Africa. The biggest forest area loss occurred in the tropics, particularly in South America and Africa, although the rate of loss in those areas has decreased substantially in the past five years

5. The Extent of Deforestation 1 The bulk of the world’s forest is natural forest, amounting to 93 per cent of global forest area or 3.7 billion ha in 2015. From 2010 to 2015, natural forest decreased by a net 6.6 million ha per year (8.8 million ha of loss and 2.2 million ha of natural forest gain). This is a reduction in net annual natural forest loss from 8.5 million ha per year (1990 to 2000) to 6.6 million ha per year (2010 to 2015). Planted forest area has increased by over 110 million ha since 1990 and accounts for 7 per cent of the world’s forest area. The average annual rate of increase between 1990 and 2000 was 3.6 million ha.

6. YearForest (000 ha)Annual change (000 ha)Annualized (%) * Change (%) 19904 128 269 20004 055 602–7 267–0.18 20054 032 743–4 572–0.11 20104 015 673–3 414–0.08 20153 999 134–3 308–0.08 Global forest area change from 1990 to 2015 * Calculated as the compound annual growth rate

7. #CountryForest area (000 ha) % of country land area % global forest area 1Russian Federation814 931 4820 2Brazil493 538 5812 3Canada347 069 359 4United States of America310 095 328 5China208 321 225 6Democratic Republic of the Congo 152 578 654 7Australia124 751 163 8Indonesia91 010502 9Peru73 973582 10India70 682222 Table 2 Top ten countries by forest area in 2015

8. By far the largest area of forest converted to other land uses between 1990 and 2015 was in the tropics The continents with the greatest forest area loss are Africa and South America. Net forest area has increased in temperate countries ;little change in the boreal and subtropical climatic domains.

10. The largest proportion of the world’s forest is in high- income countries, followed by upper middle, lower middle and lower income countries. This is true for total forest area, primary forest, other naturally regenerated and planted forest (Figure 2).

12. Forest Area by country income categories Forest area change among high-income countries has been positive over the last 25 years, with increases averaging over 0.05 per cent per year. Upper middle-income countries have the second largest proportion of forest area and have managed to reduce annual forest loss from a rate of 0.14 per cent from 1990 to 2000 to no appreciable loss from 2010 to 2015. Clearly, forest area gains and reductions in forest loss have been greatest in the high- and upper middle-income categories (Figure 4), while loss rates have remained virtually unchanged over the past 25 years in the low-income category. For low-income countries the rates of forest losses are essentially unchanged, with annual rates between 0.57 per cent and 0.64 per cent over the 25-year period.

14. The Extent of Deforestation 2 Reduced forest stocking is less visible but it is an important reality in many parts of the world. Over the past 25 years global carbon stocks in forest biomass decreased by almost 17.4 gigatonnes (Gt). This reduction was mainly driven by conversion to other land uses and forest degradation.

15. Deforestation and Carbon loss The losses of entire stretches of forests, combined with losses of individual trees from forests that remain, pumped an average of 3.2 billion tons of carbon dioxide into the atmosphere each year from 2011 to 2015 (U.N. Food and Agriculture Organization) That was down by about a quarter from the yearly average of the 10 years prior.

16. Total Carbon Emissions from Deforestation

17. Forestry and Decarbonisation Forests absorb and store an additional two billion tonnes of CO 2 per year (2011-2015), excluding emissions from deforestation. Developed countries continue to represent the bulk of the overall estimated carbon sink, with a share of 60 per cent (2011-2015). Developing countries account for the remaining 40 per cent of the total carbon sink. At the regional level, Africa, Asia and Latin America and the Caribbean all continued to release more carbon than they absorb, although emissions from Africa and Latin America decreased between 1990 and 2015. Brazil alone represented more than 50 per cent of the overall estimated reduction in carbon emissions between 2001and 2015. The forests of Europe and North America functioned as net carbon sinks between 1990 and 2015 since they absorb more carbon than they release, whereas Oceania did not show a clear trend in forest emissions over the same period. http://www.fao.org/news/story/en/item/281182/icode/

18. To sum up so far…. The rate of forest area loss is declining and the indicators for sustainable forest management reveal positive progress in forest management. At the same time, important challenges remain. The existence of sound policies, legislation and regulation is not always coupled with effective incentives or enforcement. Unsustainable forest practices and forest conversion clearly persist – despite increased efforts – and the benefits from forest utilization in some countries do not effectively reach local communities.

19. Deforestation in Amazon

20. Deforestation in Brazil Since 2004 the rate of deforestation in the Brazilian Amazon has fallen nearly 80 per cent to the lowest levels recorded since annual record keeping began in the late 1980s. it is nonetheless important to understand why more than 580,000 square kilometers (224,000 square miles) of Amazon forest has destroyed in Brazil since 1980.

22. Amazon deforestation

23. Causes of Deforestation

24. Causes of Deforestation in Brazil- 1. Increasing land use for farming and livestock Several factors have spurred recent Brazil's growth as a producer of beef: 1. Currency Devaluation 2. Control over foot and mouth 3. Infrastructure 4. Land tenure laws

25. How Brazil reduced its deforestation rates In 2004, the Action Plan for the Prevention and Control of Deforestation in the Legal Amazon was released. One of its initiatives is to reduce deforestation by 2020 by 80% relative to the average deforestation in the years 1996–2005 By 2004, deforestation in the Amazon had reached almost 28,000 km²; in 2012 it had dropped to 4,656 km² These reductions are a result of specific policies’ The Brazilian strategy to tackle the causes of deforestation is based on three axes: territorial planning; monitoring and control; and the promotion of sustainable activities after consultation and with the participation of local communities. Brazil must not only further reduce the deforestation rates, but also avoid some of the reversals that occurred some years ago. In order to do so, the challenge is to effectively address new deforestation dynamics and promote sustainable activities, particularly in agriculture.

26. Sources of inefficiency that drives deforestation There are two prime sources of inefficiency which have resulted in excessive rates of deforestation (1) Perverse incentives for landowners (1) Perverse incentives for Nations

27. Perverse Incentives for Landowners Government policies Examples such as Reduced taxes on income derived from agriculture System of property rights Concession agreements on publicly owned forests

28. Perverse Incentives for Nations Benefits are external, costs of preventing deforestation are internal to the nation Two major Benefits Biodiversity Climate Change Clear rationale for market failure and why national governments cannot be expected to solve the problem themselves

29. Public Policy and International Actions Actions to be taken to mitigate the high rates of deforestation and perverse incentives may occur at two levels (1) individual nations http://uk.reuters.com/news/video?videoId=76429 (2) international actions

30. Individual Nations Public Policy To restore effective incentives Review concessions to harvest publicly controlled land Review property rights systems Enlist support of consumers through certification These policies should benefit nations as inefficient practices cost more than the benefits received

31. International Actions Several Economic Strategies exist to resolve global inefficiencies. These include: 1. Debt Nature swaps (eg Madagascar) 2. The World Heritage Convention 3. Royalty Payments 4. Carbon Sequestration Credits

32. Summary Not all private firms follow efficient management practices; this is partly due to perverse incentives due to gov. policy Inefficient deforestation has occurred due to a failure to incorporate global benefits from standing forests Improving efficiency and encouraging sustainable forestry practices needs to be addressed at the level of the individual country and also through international actions

33. Reading Tietenberg & Lewis (2008) Environmental and Natural Resource Economics, chapter 13 (available on Sulis) Butler, R 2014 ‘Deforestation in the Amazon’ http://www.mongabay.com/brazil.html FAO (2015), The Global Forest Resource Assessment, 2015 http://www.fao.org/3/a-i4793e.pdfhttp://www.fao.org/3/a-i4793e.pdf Directed links