breaking the link between commodities and climate changebreaking the link between commodities and...

Breaking the Link betweenCommodities and Climate ChangeJune 2013

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About the PaperThis paper from the Environmental Investigation Agency, National Wildlife Federation, Natural Resources Defense Council, Rainforest Action Network, Rainforest Alliance, Solidaridad Network, and the Union of Concerned Scientists was prepared by Climate Advisers with the support of the ClimateWorks Foundation, the Gordon and Betty Moore Foundation, and the Climate and Land Use Alliance. The report evolved through a process of discussion, analysis, and research by a diverse group of civil society stakeholders.

The authors of the paper are Nigel Purvis, Michael Wolosin, and Cecilia Springer of Climate Advisers.

About Climate AdvisersClimate Advisers is a mission-driven consulting firm specializing in U.S. climate change policy, international climate cooperation, and climate-related forest conservation. Located in Washington, DC, but working globally, Climate Advisers conducts original analysis, policy maker outreach, and public education activities designed to inform and strengthen climate policy in politically realistic and economically sensible ways.

Contact1320 19th Street, NW, Washington, DC 20036, United States climateadvisers.com

Please direct comments to Michael Wolosin at: [email protected]

http://climateadvisers.com

mailto:wolosin%40climateadvisers.com?subject=Comments

Breaking the Link between Commodities and Climate Change

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Breaking the Link between Commodities and Climate ChangeThe Obama Administration’s opportunity to advance a major climate solution championed by both business and environmentalists

Executive Summary

President Obama has said he intends to use his second term to fight climate change, which he has described as one of the greatest threats facing the world. Conservatives generally think the President is moving too quickly while progressives see the administration as moving too slowly. Here is one way that the President can lead on climate change in a manner that major companies, progressives, and Congress could enthusiastically support.

Many of the world’s best known companies and environmental groups are urging the President to join them in breaking the link between commodities and climate change. The production of just four commodities (soy, palm oil, beef, and pulp/paper) accounts for the majority of global deforestation, which represents roughly 15% of the world’s climate emissions. Commodity-driven deforestation also contributes to regional insecurity and human rights abuses. Responding to growing consumer concern, companies like Coca-Cola, Disney, McDonald’s, Office Depot, Nestle, and Unilever are seeking to eliminate deforestation from the products they offer.

The Consumer Goods Forum, a global industry network representing companies with $3 trillion in annual revenue, has pledged to break this commodity and climate change link by 2020. Now, the President and Secretary of State Kerry need to make good on an Obama administration pledge last year to play a leadership role in this effort. Specifically, here’s what the United States needs to do.

• Strengthen global demand for deforestation-free commodities. Working with companies and advocates, the United States should help create vibrant markets for forest-friendly commodities through trade policy and its own procurement practices, while also clamping down on trade in commodities grown on illegally deforested lands by enforcing and expanding U.S. trade laws.

• Increase global supply of deforestation-free commodities. The United States should reform its foreign aid and investment programs to help key developing nations channel agricultural commodity production onto already deforested lands and improve the productivity of family farms, while at the same time strengthening legal protections for forests.

• Create greater transparency in global commodity trade. The United States should use its extensive satellite network and technical know-how to improve global forest monitoring and help commodity producers, traders, and processors ensure their supply chains are untainted by deforestation.

The time for action is now. This large-scale climate solution enjoys strong business support and would do much to enhance global food security, promote sustainable economic growth, and improve governance in developing countries. Strong U.S. leadership is both essential and politically feasible.



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Recommendations for Congress

Immediate Steps High-Impact Actions

• Fully fund imple-mentation of forest-protecting laws Congress has already passed

• Increase funding for targeted low-carbon agricultural assistance in forest-rich nations

• Ban the import of products produced on illegally defor-ested land

• Support strong forest and sustain-ability negotiating provisions in future trade agreements

Recommendations for the Administration

Immediate Steps High-Impact Actions

• Recruit Brazil and Indonesia to join the Tropical Forest Alliance

• Mobilize U.S. banks for forest-friendly financing

• Use U.S. techni-cal expertise to increase transpar-ency

• Use U.S. agricul-tural aid to redirect production onto already deforested lands

• Establish a White House task force to drive toward ambi-tious outcomes

• Negotiate forest protections in future trade agreements

• Create a bold new fund for private sector investments in sustainable agri-culture

• Issue an ex-ecutive order for deforestation-free procurement by 2020



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The Case for U.S. Leadership

In his second inaugural address, President Obama proclaimed: “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.”

In his 2013 State of the Union address, the President promised continued Executive Branch climate action, and he has directed his Cabinet to find climate solutions that strengthen international security and spur economic growth. In addition, Secretary of State Kerry has vowed to move climate action to the center of American diplomacy.

Roughly 15% of global carbon pollution comes from forest loss—more than the emissions produced from all the cars, buses, trains, and airplanes in the world.1 A small group of commodities—beef, palm oil, timber and paper products, and soybeans—are responsible for most of that deforestation.2 Clearing of land to create pasture for cattle ranching is the primary cause of deforestation in the Amazon. In Southeast Asia and South America, rainforests are converted to plantations for paper production and for palm oil, which is used in processed foods and cosmetics and as a substitute for traditional cooking oils and diesel fuel. And Africa is emerging as the new frontier for commodity-driven deforestation.

Beyond releasing billions of tons of carbon into the air, deforestation and illegal logging also contribute to regional insecurity and human rights abuses. Corruption and poor governance make many forested communities in developing nations particularly vulnerable to exploitation and even forced eviction when forests are cleared for agriculture. Illegal logging is sometimes associated with cartels that rival those of the drug trade when it comes to bribery, corruption, money laundering, and even violence—costing governments over $10 billion per year in lost revenue.3 In contrast, smart policies, good governance, and market incentives to reduce unsustainable and often illegal forest exploitation and clearing can benefit local communities, reduce poverty, and protect carbon-rich tropical forests and the biodiversity they contain.

Recent experience demonstrates that nations with strong forest protections can reduce deforestation while simultaneously increasing agricultural outputs by intensifying production where yields are low and by restoring productivity to lands that were previously cultivated but are now unproductive and underutilized. In Brazil, deforestation in the Amazon dropped by more than 75% from 2005 to 2012, while at the same time agricultural production and commodity exports increased,4 restoring Image source: Carl Carnemark / The World Bank



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Without more sustainable methods for sourcing raw materials, companies risk destroying the security of supply on which their trade and profitability depends.

over 10 million hectares of degraded land to agricultural productivity.5 Moving forward, Brazil could meet projected demand for beef through 2022 by increasing productivity on only 24% of existing good-quality pasture area in the Amazon, which would require only about $500 million per year of investment, yielding a 20% rate of return.6 In Indonesia, the land needed for projected palm oil expansion through 2020 can be easily accommodated without any additional clearing.7

The climate benefit of breaking the link between commodity production and deforestation is already substantial, with great potential for further emissions reductions. The drop in climate pollution achieved by Brazil through forest conservation exceeded all the climate benefits secured in all economic sectors by all developed nations that participated in the Kyoto Protocol, the leading climate treaty.8 Reducing tropical deforestation, moreover, is one of the most cost-effective climate solutions the United States could pursue.9

To capture these diverse benefits, major companies, civil society groups, and government leaders around the world are calling on the United States to help transform global commodity markets to make them climate and forest friendly.

The Business Case for Action

Major corporations are increasingly aware that environmental risks threaten their business model and long-term profitability and pose branding liabilities. Without more sustainable methods for sourcing raw materials, companies risk destroying the security of supply on which their trade and profitability depends.10 An MIT survey of over 3,000 corporate executives across the world found that well over half of these executives believe that focusing on sustainability contributes to long-term profitability.11 This is why companies increasingly highlight environmental sustainability, and forest conservation in particular, as a core value when marketing their brands.12

In addition, reputational risks from poor environmental practices, including deforestation, have never been greater for major companies. Selling products made in environmentally destructive ways intensifies reputational risks, particularly for companies that sell directly to consumers. Tracking increased consumer interest in the topic, media coverage of corporate environmental actions has increased six-fold since the 1980s.13 Highly visible consumer boycotts and protests by environmental watchdog groups have targeted well-known brands like Nestle and Adidas.

These campaigns have often succeeded in convincing companies to change their corporate practices to minimize negative public attention. For example, in 2006 Greenpeace reported that McDonald’s (and other major food companies) were purchasing soy grown on illegally deforested land in the Amazon. The soybean industry responded, resulting in a highly effective and ongoing moratorium on the purchase of soy from newly deforested land by the entire soy-processing sector in Brazil.14 Since then, environmental activists have secured dozens of deforestation-free15 commitments from corporations that are major purchasers of internationally traded commodities.

In 2010, the Consumer Goods Forum, a global consortium of over 400 of the world’s largest consumer-facing companies, committed to eliminate deforestation



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from palm oil, beef, soy, and paper supply chains by 2020.16 Coca-Cola CEO Muhtar Kent, chairman of the Forum, summarized the views of these companies when he said: “We believe that farmers can meet future demand without chopping down another single tree and we are working hard to turn our commitments into on-the-ground realities.”17

Turning words into action, major companies both within and outside the Consumer Goods Forum are implementing specific commitments to reduce deforestation from key commodities. For example, Nike, Coca-Cola, Reebok, Adidas, Timberland, and others have committed to eliminating deforestation from their supplies of cattle products. Office Depot, Xerox, and Staples have committed to only buying paper made from well-managed forests or 0recycled content and even broke ties with major suppliers known to cause massive deforestation in their production. Last year, Disney pledged to eliminate paper products containing irresponsibly produced fiber. Pepsi recently told suppliers that it would use only sustainably grown palm oil in its products no later than 2015. In 2009, McDonald’s launched a program to work with its suppliers to source more sustainably managed beef, poultry, coffee, palm oil, and wood fiber. Nestle and Unilever have made commitments that cover a wide range of their commodity ingredients. These companies and many others see ending deforestation as a business imperative,18 and their actions have persuaded some of their largest suppliers to adopt and implement industry-leading deforestation-free policies.

The Tropical Forest Alliance

In June 2012, the Obama administration joined with the Consumer Goods Forum to announce the formation of the Tropical Forest Alliance 2020, which will work toward eliminating deforestation from the production of major agricultural commodities by 2020.19 Achieving that goal would constitute a major piece of the near-term carbon emission reductions needed to slow global climate change and would be a significant step towards ensuring the sustainability of natural systems for future generations. U.S. leadership is vital to the success of the Tropical Forest Alliance. Corporations understand that the U.S. government’s diplomatic influence, market power, foreign assistance programs, and technical know-how can help them meet their 2020 commitments.

When launching the Tropical Forest Alliance, the United States pledged to conduct private sector outreach, bring together key leaders, and enhance collaboration on reducing commodity-driven deforestation. It laid out measures for accountability, citing the need for time-bound goals, monitoring and enforcement, and clear delineation of responsibility.20 The U.S. government outlined an ambitious work plan to identify joint policy recommendations with developing- and developed-country governments, additional private sector partners, and civil society leadership.21

The Tropical Forest Alliance will operate through the voluntary actions of its members.22 Capitalizing on the great opportunity that the Tropical Forest Alliance represents will require the U.S. government to match the ambition of companies, civil society, and other governments23 with bold and timely actions of its own. While a small team at the U.S. Agency for International Development has been working hard to launch this new initiative, the administration should take a broader, more inclusive approach. Now is the moment for the Obama administration to focus its collective assets on defining concrete, large-scale objectives and a clear strategy for leveraging the unique power of a corporate network that represents $3 trillion in annual revenue. Below are concrete policy recommendations that the U.S. government should commit to implement to demonstrate clear and meaningful U.S. leadership.



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Capitalizing on the great opportunity that the Tropical Forest Alliance represents will require the U.S. government to match the ambition of companies, civil society, and other governments with bold and timely actions of its own.

Policy Recommendations

The United States government should prioritize and accelerate a policy agenda to truly help companies meet their ambitious goal of ending commodity-driven deforestation by 2020, focusing on three big outcomes: (1) increasing global demand for commodities that are produced without deforestation, (2) increasing the supply of “deforestation-free” commodities, and (3) improving transparency and accountability of the global commodities market. To accomplish each of these outcomes, the United States needs to work strategically with the private sector, developing-country governments, and civil society organizations on a combination of immediate steps and, over the next three years, high-impact policy advances. Delivering results will take new energy, high-level leadership, and a sustained political commitment from the Obama administration.

1. Strengthening global demand for deforestation-free commodities

Consumer markets are changing and increasingly favor commodities that are demonstrably produced without deforestation. The United States government can further stimulate global demand for climate- and forest-friendly commodities by implementing existing U.S. import controls on timber and forest products that have been illegally harvested and by more effectively using government procurement and trade policies across both forest and agricultural commodities.

Immediate Step:

Fully implement existing law against importing illegal forest products.In 1900, the United States Congress passed the Lacey Act, to prevent U.S. trade in illegally caught wildlife.24 In 2008, Congress amended the Act with bi-partisan support to cover a broader range of illegally harvested plant products, such as timber and forest products (including paper and cardboard).25 Lacey requires importers to take steps to ensure that the products they bring into the United States were legally harvested and traded. The United States provides some technical assistance in developing countries to strengthen implementation of the Lacey Act and some training for producers and importers to help secure compliance.

The United States consumes roughly 20% of global forest products, making it one of the world’s top three consumers.26 The Lacey Act has an impact on global forest products trade beyond products landing on U.S. shores because many producers find it easier and cheaper to make sure that all their forest commodities meet Lacey Act standards, rather than keeping forest commodities destined for the United States completely segregated from those heading to other importing nations.27 Not all clearing and selective logging for wood and wood products in developing countries violates the laws and regulations of those countries, but a significant amount does—and illegal logging is often the gateway to much broader deforestation. Reducing illegality thus has a major impact on reducing deforestation and associated carbon emissions.

The United States has been a global leader in banning trade in illegal forest products, but it is not yet making the most of the Lacey Act. Domestic enforcement



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action has been limited, and additional international outreach and technical assistance could significantly speed market transformation:

• The Department of Agriculture, which oversees the collection of data required to ensure compliance with the Lacey Act, needs a unified electronic database to efficiently process data from importers. For complex “chain-of-custody” tracking, upgrading this system would reduce burdens on importers, speed implementation, and enable more rapid and complete monitoring and enforcement of the law.

• The Department of Interior’s Fish and Wildlife Service provides the domestic enforcement unit for the Lacey Act, investigating companies that import illegally sourced products into the United States. But staffing levels need to be increased to fully enforce the law across the scope of imports subject to Lacey after the 2008 amendments.29

• Internationally, the U.S. Agency for International Development and the U.S. Department of State should increase outreach to producers and processors in both forested nations and intermediate processing nations like China to help them understand how to comply with the Lacey Act and the benefits of doing so.

Approximately $13.5 million is needed to implement the Lacey Act more efficiently and effectively—an investment that, in addition to its climate benefits, would significantly reduce the $1 billion of annual losses to U.S. producers due to the illegal forest products trade.30

High-Impact Actions:

Use trade agreements for forest protection.In 2006, the United States signed a bilateral trade agreement with Peru that included a groundbreaking Environment Chapter that supported Peru’s efforts to improve forest governance and reduce illegal logging.31 The Peru agreement’s forest provisions have had some positive impacts, but the U.S. government should take a more proactive role to ensure that these provisions are fully implemented. The United States should also prioritize the principles enshrined in the Peru Environment Chapter in new trade agreements, most importantly the Trans-Pacific Partnership (TPP), an agreement that will include nations with high rates of deforestation (such as Malaysia and Vietnam) and major importers of global commodities (Japan, Australia, and the United States). The U.S. government deserves credit for proposing an environment chapter in the TPP that would improve natural

Image source: Carl Carnemark / The World Bank



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Consumer markets are changing and increasingly favor commodities that are demonstrably produced without deforestation.

resource governance and combat illegal trade of timber. It should prioritize these provisions, as well as expand them to include mechanisms for sharing data on deforestation and to support trade partners’ efforts to govern effectively by banning the trade of commodities produced on illegally obtained and/or cleared land. Trade agreements such as the TPP could also provide financial incentives for sustainable production and consumption by, for example, reducing export and import tariffs on deforestation-free products in accordance with applicable trade disciplines. These provisions should also be included in other types of commercial agreements negotiated by the United States, including bilateral investment treaties.32

Establish deforestation-free procurement goals.By adopting new, forest-specific procurement goals, the U.S. government could leverage domestic purchases to facilitate much broader change. As the single greatest consumer of goods and services in the United States,33 the federal government has the power to define the production standards of global markets through its procurement policy. Efforts to tap into the transformative power of U.S. green procurement policy go back several decades. In 1993, for example, President Clinton issued an executive order to promote waste reduction in goods like paper through procurement of products with recycled content, which kick-started the widespread adoption of corporate recycled-paper policies.34 These paper procurement standards could be improved further by increasing the recycled content standards for all government purchases and businesses doing business with the government, and by requiring double-sided copying for Executive Branch documents. In addition, the U.S. government should implement measures to reduce waste and loss of products that are driving deforestation. A recent study conducted for the Food and Agriculture Organization found that roughly one-third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tons per year.35 Minimizing this waste would help reduce the pressure on forests from food commodities.

While the U.S. government gets most of the beef, soy, vegetable oils, and paper it consumes from domestic farmers and suppliers, each year the federal government purchases billions of dollars of products that may contain deforestation-linked ingredients. For example, many of America’s favorite food and personal care products are now made with palm oil that is causing deforestation in Southeast Asia and is a growing threat in Africa and Latin America. The U.S. government should take simple measures to prevent U.S. taxpayers from driving deforestation through government purchases.

In 2009, President Obama signed an executive order requiring 95% of federally purchased goods to meet sustainability standards, including energy-efficient, water-efficient, and non-toxic production.36 That order, with slight modification, could include deforestation standards. The British government, for example, has recently committed to deforestation-free procurement for products that include palm oil and wood.37 If the U.S. government matches the recent pledge made by major companies in the Consumer Goods Forum, such leadership could magnify the transformative impact of U.S. buying power by prompting other nations to follow suit and by speeding the deployment of deforestation-free standards and certification systems.



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Ban importation of commodities grown on illegally deforested land.The Lacey Act’s prohibition against illegally harvested wildlife and wood products is part of a “rule-of-law” tradition in the United States to deny the importation of products made or obtained in violation of local and international law. In 1930, the United States adopted laws against importing goods made by child or slave labor.38 The Executive Branch researches and reports on the worst offenders globally as required by Congress,39 supports preventive and enforcement projects concerning forced labor in more than 50 countries, and conducts outreach to companies to help them comply with guidelines developed by the Department of Labor.40 Through an executive order issued by President Clinton, the Executive Branch also enforces a 1999 government procurement ban on purchasing products that have been made with such labor.41

As another example, in 2001, both Presidents Clinton and Bush issued executive orders prohibiting U.S. import of diamonds from specific countries with rebel movements that use revenues from diamond mining to undermine legitimate governments through armed conflict and other illegal actions.42 In 2003, Congress passed the Clean Diamond Trade Act,43 which requires all U.S. diamond retailers to meet internationally negotiated standards for tracking diamonds to ensure they are not so-called conflict diamonds. This global diamond tracking system, known as the Kimberley Process, has dramatically reduced international trade in conflict diamonds.44

The United States can build on this history of success by extending its rule-of-law approach to international trade by banning the importation of commodities grown on lands that were deforested illegally—not just wood and wood products harvested illegally. Just as we help developing nations fight crime by making sure that criminals who illegally cut forests to make furniture cannot sell that furniture in the United States, criminals who harm forest-dependent communities to cut forests illegally and grow commodities should not be allowed to sell those commodities in the United States. Helping commodity-producing forest-rich countries to enforce their own laws more systematically can reduce conflict and promote fair competition and economic growth, while delivering major climate change results. This transformative approach would be both politically and legally complex and would require close collaboration across governments, businesses, and NGOs. The Tropical Forest Alliance provides an ideal forum to work with importing and exporting nations to incubate this policy development.

2. Increasing the supply of deforestation-free commodities

Over the past 50 years, the United States has worked globally to improve agriculture, raise living standards, and enhance food security. The Obama administration, with strong leadership from Raj Shah, Administrator of the U.S. Agency for International Development, has made global food security a major foreign policy priority once more. After dropping from 17% of total foreign aid in 1980 to just 3% in 2006, the Obama administration’s Feed the Future program and other U.S. agricultural foreign assistance has increased by a multiple of 2.5 in dollar terms and climbed back up to 5% of total U.S. aid, amounting to $1.5 billion a year in 2011.45

Over the same half century, the United States helped establish a global norm that nations should create national parks and wilderness areas to protect their most precious forests and wildlife, following the conservation example set first by Theodore Roosevelt more than 100 years ago. Whereas few developing nations had national systems in 1980, today many developing nations have placed in excess of 10% of their forested lands under some type of legal protection.46 During this period, the United States provided hundreds of millions of dollars in support, including debt relief to nations that invested in their national park systems;47 regional conservation initiatives, such as the Congo Basin Forest Partnership;48 and training for national park system scientists, guards, and managers in developing countries.49 Under President Obama, foreign aid for forest conservation has increased substantially.50



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Under President Obama, foreign aid for forest conservation has increased substantially.

However, despite this record of leadership and progress, the United States has pursued its international forest and agriculture goals independent from trade and foreign policy. Without policy alignment and coherence, U.S. leadership and investments in protecting tropical rainforests globally are increasingly being undermined by commodity-driven deforestation “hot spots” around the world. To avoid this, the United States should consider the following strategic adjustments in its foreign assistance programs.

Immediate Step:

Promote zero-deforestation lending and investment policies.Large-scale forest clearing for commodity production requires a significant investment of up-front capital, often supplied by major commercial banks and international financial institutions. Over the past decade, some of these lenders have developed social and environmental safeguards that have reduced their role in global deforestation, but most private sector banks have not. Recently, a number of commercial banks, such as BNP Paribas, Citibank, and Rabobank, have adopted lending policies that require palm oil refiners to purchase palm fruit from growers that follow sustainability standards. This approach needs to become a global norm, followed by all banks for all deforestation-linked commodities. To move banks in that direction, the United States should use the Tropical Forest Alliance to promote a voluntary compact for deforestation-free commodity financing.51

Image source: The World Bank



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More directly, the Obama administration can advance the TFA agenda through the Overseas Private Investment Corporation (OPIC), a government-run and taxpayer-funded financial institution chartered by the U.S. Congress, which offers political risk insurance and other financial products to help American companies manage risks associated with foreign investment. OPIC has already adopted environmental standards to safeguard against unintentional environmental damage, including a ban on support for commercial activities that would clear high-value forests.52 But OPIC can also take a more proactive approach. Over the past three years, OPIC allocated over $6.2 billion to green energy projects for climate mitigation.53 In contrast, only a single, $1 million forest-related project was approved.54 The White House, State Department, and Congress need to work with OPIC to ramp up investments to help shift the expansion of commodity agriculture away from high-carbon forests and peat lands. OPIC should consider launching a fund to invest in innovation in deforestation-free agriculture and landscape management, supporting activities such as identification and dissemination of sustainable agricultural productivity technologies where forest protections are in place and methods to restore productivity of degraded lands. It should also syndicate low-cost debt to encourage sustainable agricultural production in key countries, with a particular focus on increasing productivity of small and medium enterprises in areas with strong forest protections.


Support land management reforms in key countries.The United States has long recognized that “sustainable development is closely linked to sound democratic governance and the protection of human rights.”55 Currently, the U.S. Agency for International Development works in 32 countries to help communities maintain the rights to their land.56 But in 2012, of the top 10 recipients of governance aid from the U.S. government, only two were tropical forest countries (Colombia and Liberia).57 Other countries with current or projected high rates of deforestation should be added to that list, and support for three approaches should be prioritized:

• Formalization of the land and resource rights of forest-dependent communities. Strong empirical evidence demonstrates that recognition of those rights is a barrier to deforestation.

• Implementation of rule-of-law, enforcement, and anti-corruption programs in commodity-producing forest-rich nations. U.S. agricultural expansion assistance and governance assistance need to proceed in tandem to minimize corruption, social inequality, and natural resource conflicts. The United States can help train local judges and decision makers on adjudicating land management controversies and provide support to build effective alternative dispute resolution mechanisms.

• Development of regulatory reforms to eliminate perverse incentives to clear forests in connection with commodity production. For example, in Indonesia, palm oil plantation developers that voluntarily protect high-carbon forests and peat lands within their concessions may have their licenses revoked by Indonesian authorities for non-compliance with regulatory provisions that require them to clear and plant the entire concession.

Improve agricultural productivity.58

Increasing crop and livestock yields in key commodity-producing forest-rich nations, if coupled with improved forest management and protection, could save 1.6 million hectares of forest from being cleared and avoid more than a billion tons of CO2 emissions.59 In areas of rapidly deforesting countries that have strong land management and forest protection policies, the U.S. government should support a combination of agricultural technology advances and productivity assistance. This is needed most among small-scale farmers, whose yields are far below commercial standards. The United States should couple this productivity assistance



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Strong evidence demonstrates that recognition of the land and resource rights of forest-dependent communities is a barrier to deforestation.

with training of local farmers to assure deforestation-free production within diverse family farms and forests. Doing so would significantly increase global food security and improve livelihoods in poor rural communities.60 Small-scale farmers collectively cultivate less than 18% of global agricultural land but are responsible for the majority of the food supply in developing nations.61 Increasing the productivity and sustainability of smallholder systems should be a priority for the Tropical Forest Alliance.

Redirect agricultural expansion to underutilized, degraded lands.The United States should help commodity-producing forest-rich nations create local and national land-use plans and incentive systems that identify and make more attractive those degraded areas suitable for agricultural expansion. Smart land-use plans would take into account, among other factors, soil quality, water availability, crop suitability, and the land rights of indigenous and other local communities. Technical assistance can help identify the most suitable areas for rehabilitation, design effective clearing and weed management techniques that maintain soil structure, investigate the most effective ways to restore soil nutrients such as establishing fast-growing cover crops, and invest in ways to share these techniques with farmers on the ground. Assistance will also be needed to resolve complex and overlapping claims to land and resources in ways that safeguard the rights of indigenous peoples, local communities, and smallholder farmers. Finally, incentive systems are needed to overcome the cost differentials of preparing degraded land and lost revenue from forest clearing, making land rehabilitation more attractive to producers than deforestation.

Image source: Edwin Huffman / The World Bank



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3. Improving transparency and accountability

Eliminating deforestation from commodity production will depend on achieving greater transparency in global commodity markets and supply chains. Sellers who wish to capture the price premiums associated with supplying environmentally sustainable commodities need the capacity to demonstrate that their shipments were produced without causing deforestation. Consumer goods companies and other buyers seeking to purchase only deforestation-free commodities need systems in place to help them make informed buying decisions and to demonstrate compliance with their public commitments to end the purchase of commodities grown on deforested land by 2020. As a practical matter, this means building low-cost global systems to monitor forests and supporting credible chain-of-custody systems to ensure that products are deforestation-free. Here too the United States has a lot to offer via the Tropical Forest Alliance.

Immediate Step:

Increase satellite monitoring applications.Over the past few decades, rapid advances in remote-sensing technologies have created ways to more accurately monitor changes in land use, including deforestation and expansion of agricultural lands. The United States’ National Aeronautics and Space Administration (NASA) has long been the global leader in generating satellite data that has revolutionized forest and land-use monitoring and science, for example through the Landsat program’s more than four decades of continuous data collection. The United States should now prioritize the application and dissemination of these and other satellite and aerial data sources to increase transparency and accountability regarding deforestation globally.

With this goal in mind, the United States should work collaboratively with Tropical Forest Alliance partners to develop and disseminate reports that summarize and pinpoint global deforestation, including real-time maps that overlay deforestation and the expansion of commodity agriculture. These reports should be accompanied by the online publication of raw data in readily accessible formats for other users. Furthermore, the United States should provide support for developing-country governments and civil society organizations to overlay national, regional, and local land classification, property, and licensing maps. This will allow governments, companies, and civil society to track deforestation to the individual farm or plantation, thereby linking deforestation events to those responsible for them in the commodity supply chain. The Tropical Forest Alliance provides an ideal venue for new collaboration on forest and land-use monitoring innovations that would help bring the best information available to supply chain decision makers.


Support new agricultural product chain-of-custody systems.The United States should invest significantly with companies and other countries in establishing new and credible systems for assuring traceability of soy, beef, palm oil, and other key commodities. In order for companies to meet consumer demand for deforestation-free products, each entity in the supply chain—from growers to processors—needs to be able to tell whether specific commodity shipments were produced in ways that contributed to deforestation. This means companies, third-party environmental certifiers, middlemen, and outside auditors need to be able to reliably trace commodities from deforested areas through to their buyers.



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Consumer goods companies and other buyers seeking to purchase only deforestation-free commodities need systems in place to help them make informed buying decisions

The United States has invested significantly in establishing tracking systems for wood products, several of which are well underway and working reasonably well.62 Chain-of-custody tracking systems and voluntary certifications for other commodities driving deforestation—such as soy, beef, and palm oil—are generally behind systems for wood, and few of the existing systems meet a deforestation-free standard. This provides opportunities for the United States government to help make existing systems more effective in eliminating deforestation. It should establish and support partnerships with leading civil society groups that are developing these systems and the businesses that need them to pilot chain-of-custody systems at scale for palm oil, beef, and soy. By helping to create traceability systems in deforestation hotspots, and partnering with ready and willing purchasers from the beginning, U.S. investments in supply chain tracking would significantly accelerate a transition to deforestation-free agricultural production.

Train experts to effectively implement transparency and traceability technologies. The vast information produced by the satellite monitoring and chain-of-custody tracking systems will only be useful if stakeholders understand how to use them. Local governments and civil society organizations need training on how to utilize satellite data on forest cover and how to work with communities and stakeholders to evaluate new information. Commodity growers need training on how to submit data to tracking systems that ensure their compliance with transparency and traceability standards. Refiners and manufacturers need training on how to use new tracking systems to make sure they meet their commitment to not purchase products grown on recently deforested land. The U.S. government should support these new training programs in partnership with other major economies and companies participating in the Tropical Forest Alliance.

Image source: The World Bank



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Commit to Leadership

To succeed, the U.S. government must commit itself to genuine and sustained leadership on reducing commodity-driven deforestation. Strong U.S. leadership is essential to mobilize international action and to align the U.S. government internally. The Tropical Forest Alliance provides a vehicle for doing both.

• Organize for success.Many of the recommendations outlined here require new policies and strong political will. Even some of the less challenging policy measures require significant commitments from federal agencies that have other priorities. High-ambition outcomes are far more likely if the White House actively coordinates the administration’s internal policy deliberations and helps convene businesses and other stakeholders. President Obama himself should kick-start this process by publicly endorsing the Tropical Forest Alliance as a way to achieve business, climate, and foreign policy goals. The President should articulate clear goals and deadlines for the Alliance and create and empower a White House task force to develop this year a blueprint for success, promote action, and ensure agency accountability.

• Elevate deforestation in U.S. diplomacy. Harmonizing America’s vital national interests in global food security, climate protection and international development must be a major foreign policy priority of the United States. Leveraging the Tropical Forest Alliance should underpin that effort. Through the Alliance, the United States can work with like-minded countries to coordinate diplomatic strategies. The United States, in addition, can partner through the Alliance with leading businesses and civil society groups.

At the State Department, Secretary Kerry, a long-time environmental leader and champion of forest and climate action, should lead the Tropical Forest Alliance. Domestically, he should work with the President to press for interagency cooperation and robust action. Internationally, he should use his convening power to bring together agriculture, environmental, and development ministers from developed and developing countries, along with corporate and NGO CEOs, to forge partnerships and widen commitments to action. Secretary Kerry and his advisers should make sure that deforestation is on the agenda at major global summits such as APEC and the G20 and in bilateral meetings with leaders and ministers from tropical forest nations, as well as with major economic powers that process and consume internationally traded commodities.

• Play to win. By meeting the goals of the Tropical Forest Alliance—ending deforestation for agricultural commodities by 2020—the United States can reduce climate pollution and environmental degradation with the active support of the world’s leading companies, U.S. consumers, and major foreign allies, while enhancing global food security, promoting sustainable economic growth, and improving governance in forest-rich developing countries. Success will depend on whether the President and Secretary Kerry give the Alliance the high-ambition goals and political attention it deserves.



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Summary of U.S. Policy Recommendations

Summarized below are the goals and policies the U.S. government should pursue to reduce climate pollution and eliminate tropical deforestation from international agricultural commodity production by 2020, working through the Tropical Forest Alliance, the United States’ partnership with leading companies, civil society, and other governments.

Goal Subject Policy Recommendation

Strengthen demand for deforestation-free products

Rule of law

Establish an electronic tracking system for documenting legally harvested timber and wood products

Step up enforcement of the Lacey Act ban on importing illegally produced timber and wood products

Train developing nations on how to comply with U.S. commodity import laws

Ban the import of commodities produced on illegally deforested land

Trade

Negotiate forest protections in future trade and investment agreements, in-cluding upcoming agreements with the Pacific region

Enforce the forest provisions of the Peru Free Trade Agreement

Procurement Commit to remove deforestation from U.S. government procurement by 2020

Build supply of deforestation-free products

Lending and investment

Promote a voluntary compact among commercial banks to decline to finance agricultural commodity investments that cause deforestation

Increase funding for private sector investments in sustainable agriculture

Foreign assistance reform

Support forest community land rights and land tenure reforms

Support rule-of-law, anti-corruption, enforcement, and regulatory reform pro-grams in commodity-producing forest-rich nations

Increase agricultural yields for smallholders in conjunction with forest conser-vation measures

Redirect agricultural expansion onto suitable but previously deforested de-graded lands

Increase trans-parency

Monitoring and tracking

Use satellite and aerial data to issue easy-to-understand reports and maps on forest cover and changing land use for agriculture

Support establishment of chain-of-custody and auditing systems for com-modities like soy, beef, and palm oil

Commit to U.S. leadership

DiplomacyElevate the goals of the TFA in U.S. diplomacy in bilateral meetings with key nations, as well as in multilateral forums such as the G20

Government organization

President Obama should endorse the TFA and empower a White House task force to deliver results



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Endnotes1. Scientists have recently converged around a global estimate of gross deforestation for 2000-2005 of 3.0 gigatons CO2 per year,

while emissions from soils, peat loss, and forest degradation could account for another 2.3 gigatons CO2 per year, for a total of 5.3 gigatons CO2 per year. Le Quéré, C. et al. 2009. “Trends in the sources and sinks of carbon dioxide,” Nature Geoscience, 2: 831-836. (http://www.nature.com/ngeo/journal/v2/n12/abs/ ngeo689.html). Harris, N. et al. 2012. “Progress Toward a Consensus on Carbon Emissions from Tropical Deforestation,” Winrock International and Woods Hole Research Center. (http://www.whrc.org/news/pressroom/pdf/WI_WHRC_Policy_Brief_Forest_CarbonEmissions_finalreportReduced.pdf)

2. Boucher, D. et al. 2011. The Root of the Problem: What’s Driving Deforestation Today? Union of Concerned Scientists, Washington, DC.

3. Nellemann, C., INTERPOL Environmental Crime Programme (eds). 2012. Green Carbon, Black Trade: Illegal Logging, Tax Fraud and Laundering in the Worlds Tropical Forests, A Rapid Response Assessment, United Nations Environment Programme, GRID-Arendal, Arendal, Norway. (http://www.unep.org/pdf/RRAlogging_english_scr.pdf)

4. Boucher, D. 2012. “Another Large Drop in Deforestation in Brazil,” Union of Concerned Scientists, The Equation. (http://blog.ucsusa.org/another-large-drop-in-deforestation-in-brazil/)

5. Butler, R. A. 2012. “Degraded lands hold promise in feeding 9 billion, while preserving forests,” MongaBay. (http://news.mongabay.com/2012/0329-swf_degraded_lands_opportunity_clay.html)

6. Barreto, P., da Silva, D. 2013. How can one develop the rural economy without deforesting the Amazon? Amazon Institute of People and Environment (IMAZON), Belém, Brazil. (http://www.imazon.org.br/publications/books/how-can-one-develop-the-rural-economy-without-deforesting-the-amazon)

7. Sizer, N. 2012. “The False Choice Between Palm Oil and Indonesian Forests,” WRI Insights, World Resource Institute. (http://insights.wri.org/news/2012/11/false-choice-between-palm-oil-and-indonesian-forests)

8. Boucher, D. 2010. “New data shows REDD+ is succeeding,” MongaBay. (http://print.news.mongabay.com/2010/1215-boucher-redd_is_succeeding.html)

9. Numerous estimates of global abatement costs in 2030 price industrial emissions reductions at $20-$30 per ton, and forest emission reductions at $10-$15 per ton (including studies from McKinsey and Company and the Environmental Protection Agency). This estimate, moreover, likely overstates the true cost of forest conservation because in the EPA assessment, it was assumed that the United States would need to compensate developing countries for reducing deforestation.

10. In its Commitment on Deforestation and Forest Stewardship, Nestle has recognized that its success “is intimately connected with the health of the forests and forested landscapes from which it sources some of its raw materials.” Nestle. 2011. “Commitment on Deforestation and Forest Stewardship.” (http://www.nestle.com/asset-library/Documents/Media/Statements/2011-Nestle_Commitments_on_Deforestation_Forest_Stewardship.pdf)

11. Haanaes, K. et al. 2012. “Sustainability Nears a Tipping Point,” MIT Sloan Management Review with the Boston Consulting Group. (http://sloanreview.mit.edu/sustainability-interactive-tool/business-case-profitability/)

12. Paul Polman, CEO of Unilever, noted in an interview: “When we achieved the Rainforest Alliance certification [of environmental good practice for Lipton brand tea], we saw our business growing in all the countries in which we did it, and consumers feeding back that the tea tastes better.” Greenwise. 2012. “Unilever: ‘We have an opportunity to re-invent consumption.’” (http://www.greenwisebusiness.co.uk/news/unilever-we-have-an-opportunity-to-reinvent-consumption-2932.aspx)

13. Flammer, C. 2012. “Corporate Social Responsibility and Stock Prices: The Environmental Awareness of Shareholders,” MIT Sloan School of Management. (http://www.corporate-sustainability.org/conferences/fourth-annual-research-conference/Flammer.pdf)

14. Greenpeace. 2008. “Landmark Amazon soy moratorium extended,” Greenpeace International. (http://www.greenpeace.org/international/en/news/features/amazon-soya-moratorium-renewed-170608/)

15. Deforestation-free is intentionally left undefined as NGOs, businesses, and governments have not yet reached consensus on a precise definition.

16. Consumer Goods Forum. 2013. “Sustainability.” (http://sustainability.mycgforum.com)

17. Video: “The Consumer Goods Forum on Deforestation.” (http://www.youtube.com/watch?v=7wQCXXEaT3A)

18. Paul Polman, CEO of Unilever has said: “Amongst businesses there is now a critical mass forming around [ending] deforestation.” Confino, J. 2012. “Rio+20: Unilever CEO on the need to battle on to save the world,” The Guardian. (http://www.guardian.co.uk/sustainable-business/rio-20-unilever-battle-save-world)

19. The Consumer Goods Forum. 2012. “Consumer Goods Forum and the US Government announce a joint initiative on deforestation,” Press release.

20. Video: “Rio+20: Greening our Supply Chains.” (http://www.ustream.tv/recorded/23424068)

21. USAID. 2012. “Reducing Deforestation Through Sustainable Supply Chains,” Press release. (http://www.usaid.gov/news-information/press-releases/reducing-deforestation-through-sustainable-supply-chains)

22. U.S. Agency for International Development. 2013. “Tropical Forest Alliance 2020.” (http://www.usaid.gov/climate/tfa2020)



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23. The European Union, for example, has resolved to provide significant financial support to developing countries with the goal of halting tropical deforestation by 2020. European Union. 2009. “European Parliament resolution of 23 April 2009 on addressing the challenges of deforestation and forest degradation to tackle climate change and biodiversity loss.” Official Journal of the European Union. (2010/C 184 E/08)

24. U.S. Fish and Wildlife Service Office of Law Enforcement. 2006. “18 USC 42-43, 16 USC 3371-3378, Lacey Act,” (http://www.fws.gov/le/pdffiles/Lacey.pdf)

25. Animal and Plant Health Inspection Service. 2008. “Amendments to the Lacey Act from H.R. 2419, Sec. 8204,” U.S. Department of Agriculture. (http://www.aphis.usda.gov/plant_health/lacey_act/downloads/background--redlinedLaceyamndmnt--forests--may08.pdf)

26. FAO, as cited in World Wildlife Fund. 2012. “The 2050 Criteria: Guide to Responsible Investment in Agricultural, Forest, and Seafood Commodities,” WWF Report, Washington, DC. (http://awsassets.panda.org/downloads/the_2050_critera_report.pdf)

27. The European Union Timber Regulation, passed in 2010 and enacted in 2012, takes a complementary approach to the Lacey Act by similarly denying market access to illegally harvested timber and associated wood products.

28. From 2000-2009, reducing illegal logging in Indonesia, Brazil, and Cameroon prevented over 1.2 billion tons of CO2 from being released (one-fifth of the UK’s total emissions over the same period). Ending illegal logging within the next decade would prevent up to 22 billion tons of CO2 from being released. Lawson, S. and L. MacFaul. 2010. “Illegal Logging and Related Trade: Indicators of the Global Response,” Chatham House, London, UK.

29. Enforcement actions are necessary for the law to have impact, encouraging the private sector to prioritize legal purchasing. For example, in a recent case this unit pursued an enforcement action on the Gibson Guitar Company, leading Gibson to admit guilt, pay significant fines, give up confiscated wood, and improve their internal systems to comply with the law. The case received attention from high-profile national media and was also closely tracked by the wood products trade press. However, additional actions and ongoing vigilance is necessary to ensure broad compliance with the law.

30. Environmental Investigation Agency. 2011. “The U.S. Lacey Act: Tackling the Illegal Trade in Timber, Plants, and Wood Products,” Environmental Investigation Agency, Washington, DC.

31. Office of the U.S. Trade Representative. 2012. “Final Text (Peru TPA),” Executive Office of the President. (http://www.ustr.gov/trade-agreements/free-trade-agreements/peru-tpa/final-text)

32. A recent agreement between Canada and Benin, for example, encourages the investors of both countries to comply with internationally recognized standards of corporate social responsibility. The U.S. government should champion these types of provisions in future investment agreements, along with forest protection measures to ensure that international investors help developing nations meet domestic forest conservation goals. Cotula, L. 2013. “Is the tide turning for Africa’s investment treaties?” International Institute for Environment and Development. (http://www.iied.org/tide-turning-for-africa-s-investment-treaties)

33. Environmental Protection Agency. 2010. “Environmentally Preferable Purchasing.” (http://www.epa.gov/epp/pubs/about/about.htm)

34. Now, over 645 large companies have recycled-paper procurement policies. According to a government assessment of the executive order, “This responsible use of Government purchasing power will not only help the environment, but will also stimulate the growth of the recycled content paper industry in the 21st century.” Complementing the ability to set standards for the actual products it purchases, the U.S. government can also influence global suppliers to adopt more sustainable production methods through its procurement policies. In either case, suppliers don’t want to be excluded from supplying governments, particularly the U.S. government. Environmental Paper Network. 2011. “The State of the Paper Industry 2011: Steps Toward an Environmental Vision.” (http://environmentalpaper.org/documents/state-of-the-paper-industry-2011-full.pdf). Birgfeld, E. et al. 2000. “Greening the Government: A Report to the President on Federal Leadership and Progress,” Office of the Federal Environmental Executive. (http://www.gpp.org/greengovt.pdf)

35. Food and Agriculture Organization of the United States. 2011. Global food losses and food waste. (http://www.fao.org/docrep/014/mb060e/mb060e00.pdf)

36. The White House. 2009. “Executive Order 13514 of October 5, 2009: Federal Leadership in Environmental, Energy, and Economic Performance,” Federal Register 74(194). (http://www.gpo.gov/fdsys/pkg/FR-2009-10-08/pdf/E9-24518.pdf)

37. Central Point of Expertise for Timber Procurement. 2012. “UK Statement on Palm Oil”, Department for Environment, Food, and Rural Affairs. (http://www.cpet.org.uk/cpet-news/news stories/UK-statement-on-palm-oil) and Central Point of Expertise for Timber Procurement. 2012. “The UK public procurement policy on timber”, Department for Environment, Food, and Rural Affairs. (http://www.cpet.org.uk/uk-government-timber-procurement-policy)

38. Section 307 of the Smoot-Hawley Tariff Act of 1930 (19 U.S.C. Section 1307).

39. Trade and Development Act of 2000 (106th Congress, H.R.434.ENR).

40. U.S. Department of Labor. 2012. “Office of Child Labor, Forced Labor, and Human Trafficking.” (http://www.dol.gov/ilab/programs/ocft/)

41. The White House. 1999. “Executive Order 13126 of June 12, 1999,” Federal Register 64(115). (http://www.gpo.gov/fdsys/pkg/FR-1999-06-16/html/99-15491.htm)

42. Executive Order 13194 for Sierra Leone and Executive Order 13213 for Liberia.

43. 108th Congress. 2003. “An Act to implement effective measures to stop trade in conflict diamonds, and for other purposes.” (http://www.treasury.gov/resource-center/sanctions/Documents/pl108_19.pdf)



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44. Kimberley Process. 2013. “The Kimberley Process: unique and effective.” (http://www.kimberleyprocess.com/web/kimberley-process/kp-basics)

45. OECD Creditor Reporting System. Organization for Economic Co-operation and Development. (http://stats.oecd.org)

46. International Union for Conservation of Nature and U.N. Environment Programme. 2010. “The World Database on Protected Areas (WDPA),” UNEP-WCMC, Cambridge, UK. (http://www.protectedplanet.net)

47. U.S. Agency for International Development. 2011. “Innovative Financing for Forest Conservation and the Environment: Tropical Forest Conservation Act (TFCA),” USAID Environment. (http://transition.usaid.gov/our_work/environment/forestry/tfca.html)

48. U.S. Department of State. 2009. “Congo Basin Forest Partnership,” Bureau of Oceans and International Environmental and Scientific Affairs. (http://www.state.gov/e/oes/rls/fs/2009/129962.htm)

49. U.S. Agency for International Development. 2013. “Parks in Peril,” Natural Resources Management and Development Portal. (http://rmportal.net/projects/content/parks-in-peril)

50. Wolosin, M. 2012. “US Forest-Climate Assistance: An Assessment,” Resources for the Future and Climate Advisers, Washington, DC. (http://www.climateadvisers.com/pdf/RFF-Rpt-Wolosin-ForestClimateAssistance.pdf)

51. The Banking Environment Initiative is currently working with the U.K. government to produce such a compact with several major banks. This compact process is in its fledgling stages, and U.S. government support could bring in a critical mass of banks to support deforestation-free financing. Banking Environment Initiative. 2013. “BEI Latest,” University of Cambridge Programme for Sustainability Leadership. (http://www.cpsl.cam.ac.uk/bei)

52. Overseas Private Investment Corporation. 2010. “Environmental and Social Policy Statement.” (http://www.opic.gov/sites/default/files/consolidated_esps.pdf)

53. Jones, A., et al. 2013. ”The U.S. Contribution to Fast-Start Finance: FY12 Update,” World Resources Institute, Climate Advisers, and ODI, Washington, DC. (http://www.climateadvisers.com/pdf/WRI13_FactSheet_4c_OCNUSFSF_r55.pdf)

54. Ibid.

55. U.S. Agency for International Development. 2013. “Importance of Democracy, Human Rights, and Governance to Development.” (http://www.usaid.gov/what-we-do/democracy-human-rights-and-governance/importance-democracy-human-rights-governance)

56. U.S. Agency for International Development. 2013. “Primer: Land Tenure and Property Rights,” USAID Land Tenure and Property Rights Portal. (http://usaidlandtenure.net/sites/default/files/USAID_Land_Tenure_Primer_0.pdf)

57. Foreignassistance.gov database. 2013. “Foreign Assistance Sectors.” (http://foreignassistance.gov/ObjectiveView.aspx?budTab=tab_Bud_Overview)

58. Commodity production in developing nations has been growing and will likely continue to grow. Despite this trend, U.S. farmers have made record profits. Importantly, the policy recommendations presented here would not harm U.S. farmers or run afoul of the annually approved Bumpers Amendment prohibition on the use of taxpayer funds to help foreign producers grow crops that compete with similar commodities grown in the United States. On the contrary, these are “level playing field” recommendations that would help bring developing-country producers into compliance with the same international norms that apply to U.S. farmers. The Obama administration can work with Congress to ensure an annual, country-by-country determination that U.S. foreign assistance programs are not increasing foreign production of internationally traded commodities beyond what would have occurred in the absence of U.S. assistance.

59. Carbon savings calculated at 200 tons per hectare. Fairhurst, T. and D. McLaughlin. 2009. “Sustainable Oil Palm Development on Degraded Land in Kalimantan,” World Wildlife Fund. (http://tropcropconsult.com/downloads_files/Fairhurst2009.pdf). Notably, increasing agricultural yields in forested areas without strong forest policies could make additional deforestation more economically attractive. Chomitz, K. & P. Buys. 2007. At Loggerheads?: Agricultural Expansion, Poverty Reduction, and Environment in the Tropical Forests. World Bank Publications.

60. Prakash-Mani, K. 2013. “Enabling food security through smallholder farming,” Swiss Re Centre for Global Dialogue. (http://cgd.swissre.com/features/Enabling_food_security_through_smallholder_farming.html)

61. Food and Agriculture Organization of the United Nations. 2012. “Smallholders and Family Farmers.” (http://www.fao.org/fileadmin/templates/nr/sustainability_pathways/docs/Factsheet_SMALLHOLDERS.pdf)

62. For example, by launching and investing heavily in the Responsible Asia Forestry and Trade Alliance, a partnership with several NGOs, the U.S. government helped bring 1.3 million hectares of tropical forest and more than 20 factories in the Asia and Pacific region under Forest Stewardship Council (FSC) certification and chain-of-custody tracking by working directly with government and private forest managers and wood manufacturers. (“RAFT Results.” http://www.responsibleasia.org/?page_id=1544). All told, over 30 million hectares of forest outside Europe and North America are certified to the FSC standard, which has strict chain-of-custody tracking rules (“Global FSC certificates: type and distribution.” https://ic.fsc.org/download.facts-and-figures-april-2013.a-1831.pdf). In another example, USAID provided initial funding for Liberia’s LiberFor program, which worked with forest auditors to barcode every tree felled in the country to track a log from stump to export (“Lessons from the Establishment of a Timber Chain of Custody System in Liberia.” February 2013. http://www.profor.info/notes/lessons-establishment-chain-custody-system-liberia). These systems have also been an important tool for suppliers to comply with the Lacey Act, as they provide a strong paper trail for outside auditors trying to establish whether a company performed sufficient due diligence in making wood purchases.