1. Deforestation: Why it happens and what to do about it John Hudson, DFID UNFCC Workshop on Reducing Emissions from Deforestation in Developing Countries Rome, 30 August to 1 September 2006

2. The presentation…  Deforestation is not new  It is complicated – many causes and interrelationships  Some specific examples  What to do?

3. It’s not new  Changes in nature and extent of forests are not new  Forests have ebbed and flowed during recorded and geological history  It is the speed of change in some countries that is new  As natural forests decline, managed forests, plantations and trees on farms replace them (see next slide)

4. Changes in quality and quantity of forests over time

5. Many causes…  Direct causes – e.g. shifting agriculture, commercial agriculture, plantations, infrastructure  Underlying causes – e.g. poverty; population pressure; market and policy distortions; insecure/unclear tenure, failures of governance  Predisposing factors – biophysical characteristics, social upheavals

6. Some crude generalisations  More people, less forest, but…  Higher per capita income, greater deforestation, but…  Higher farm prices (trade liberalisation, subsidies, devaluations) increase deforestation  Higher off-farm employment and higher wages decrease deforestation

7. More generalisations…  Greater access (more roads) increases deforestation  Mixed evidence about logging – but excess processing capacity drives over-harvesting  Deforestation is greater in open access regimes – property rights matter

8. Some specific examples: Indonesia  24% of forest cover (28 m ha) lost 1990-2005  Direct causes: logging (much illegal); conversion to oil palm, timber and coffee (planned & spontaneous); small scale agriculture; fire associated with land conversion  Underlying causes: population pressure and transmigration policy; contested land tenure; corruption; demand for timber and excess processing capacity; failures of capital markets (no due diligence); competition for power following decentralisation.

9. Some specific examples: Brazil  26,000 km 2 of Brazilian Amazon lost last year  Direct causes: conversion to agriculture (pasture, soya); colonisation and subsistence agriculture;  Underlying causes: demand for commodities (beef, soya); unclear and contested property rights; spontaneous colonisation and planned settlements

10. Some specific examples: Africa  Accounts for about half of global deforestation  Small-scale agriculture accounts for about 60%  Dry forests being converted at a rate 50% higher than rainforests  Logging is an important factor in parts of West and Central Africa  Demand for wood rarely drives deforestation on other than a local scale

11. What to do?  Multi-sectoral approach  Clearer, more secure property rights  Better governance and regulation  Payments for environmental services

12. Multi-sectoral approach  External factors drive deforestation – narrow forest sector solutions won’t work  Need a multi-sectoral approach – lots of policies and actions that deal with the complexity  But these haven’t worked well in the past Sectoral entities don’t cooperate Economic policy makers rarely think about forests Politically unattractive – many small steps

13. Property rights  Unclear and contested property rights are a major underlying cause of deforestation in most places  Reforms challenge established power relations, are politically sensitive and usually slow to fix  But there have been enormous changes in some parts of the world in the last 15 years or so

14. Better governance and regulation  Forests often associated with deep seated systems of political patronage, corruption, inconsistent legal frameworks, weak law enforcement and poverty  Must be resolved by wider governance reforms as well as specific actions related to forests  Such actions more likely to succeed if reinforced by markets that discriminate in favour of products from legal and well managed sources

15. Payments for environmental services  Experience in market / compensation based approaches is growing – but still very limited in countries where deforestation is greatest  Lack of property rights and high transaction costs pose problems  Carbon is biggest potential market  But how would payments to countries affect the behaviour of individual farmers and companies?