Financing sustainable forest management: A comprehensive approach to resource mobilization at country level Nadi, Fiji, 24 July 2012 Camilla Nordheim-Larsen Global Mechanism of the UNCCD

 The Global Mechanism  The challenge: mobilizing resources for SFM  Financing for SFM/ SLM: integrated approach within the framework of sustainable development and poverty alleviation  Developing Integrated Financing Strategies (IFS): approach and lessons learned Overview

The Global Mechanism  Financial mechanism of the UNCCD  Tasked to mobilise resources for sustainable land management (SLM)  Promoting synergistic implementation of the Rio Conventions  Supports developing countries in designing Integrated Financing Strategies (IFS) leading to multi-year investment frameworks Similar challenges in financing SFM and SLM

Increasing recognition of the multiple values and functions of forests (e.g. environmental services, NTFP) But: many of these services are not traded in markets or accounted for in national budgets, and forest owners and managers do not receive any returns for them This creates conditions for exploiting forests unsustainably The challenge: financing SFM Demonstrating the benefits of SFM

 People’s livelihood is not only dependent on forests in isolation, but on the availability of healthy soils, clean water, food production and the safeguarding of biodiversity  Sustainable forestry, land water management, climate change and biodiversity need to be addressed in an integrated manner. The challenge: financing SFM Adopting an integrated approach

Deforestation Illegal logging Soil erosion Agricultural encroachment High water-use crops Declining soil fertility & salinity Loss of arable land Excessive chemical use Low farm income Water pollution - fertiliser & pesticides; Siltation Decreasing water availability Urban encroachment Increasing food & water needs Increasing pollution Mining Dumping of waste Excessive resource extraction Loss of land cover Landslides Loss of soil fertility Rangeland degradation Conversion to agri lands Invasive species

National Development Plan, Sectoral Plans, National Action Plan, etc. External Sources of Financing Innovative Sources of Financing Investment Framework Internal Sources of Financing Mainstrea ming SLM National Context Integrated financing strategy Socio-Economic Development and Poverty Alleviation Integrated Financing Strategy

Financing sources, instruments and mechanisms Analysis of the financing context Internal resources National budget National funds (e.g. national forest funds) Private investments ( e.g. from farmers, companies, individuals, etc.) Local budgets ( e.g. municipalities) External resources Bilateral/ multilateral cooperation Non-ODA  Direct foreign investments  Remittances  NGO and foundations  Decentralised cooperation Innovative resources Market based instruments  Emissions trading  Payment for environmental services  Certification schemes Investment instruments  Debt swaps  Conservation concessions Fiscal instruments  Subsidies  Differential taxation on land use  Deforestation taxes Climate change funds  REDD++, Green fund  Adaptation fund

Opportunities and constraints for mobilising resources for SFM Analysis of the financing context Opportunities Policy frameworks in place (international, regional, sub-regional, national) Multitude of existing ‘traditional’ financing sources, instruments and mechanisms Emerging innovative financing sources (e.g. climate change, market based mechanisms) Constraints SFM not national priority Weak inter-sectoral coordination and collaboration Inadequate legal and institutional framework Insufficient capacities related to use of relevant financing sources and mechanisms financing

Entry points for mobilising resources for SFM Analysis of the financing context Constraints SFM not national priority Weak coordination and collaboration Inadequate legal and institutional framework Insufficient capacities related to use of relevant financing sources and mechanisms financing Action points Show the contribution of forests to GDP and sustainable development (e.g. economic valuation) Identify and analyse traditional existing sources of funding Identify and analyse potential innovative sources Strengthen inter-sectoral coordination at all levels Strengthen institutional and legal frameworks Mainstream SFM as a national priority

National Sources MoA; MoE; + Land- use MoA; MoI; + research institutions MoF; MoE; + Local authorities + private inv. MoE; MoF; Land-Use + Local authorities MoT; MoF + Local Authorities External Sources bilateral (EC, GIZ, DFID); GEF and multilateral (ADB, WB & IFAD) financing; FDI; Foundations etc. Investment Framework CC Resilience - Integrated Watershed Mgt. Alternative Income Generation Biodiversity Conservation Reduce Deforestation Rehabilitation of degraded agricultural lands External Sources Innovative Mechanisms Carbon financing, PES, conservation easements, debt-swaps; innovative taxation schemes

Lessons learned  Ensuring sustainable and predictable financing flows requires a holistic, comprehensive approach  Lack of financing not always the issue: enabling environment key for resource mobilisation  Challenge to develop projects and programmes that cuts across sectors  ‘First door’ of finance: domestic budgets and national investments

Thank you! Camilla Nordheim-Larsen Programme Coordinator The Global Mechanism of the UNCCD