Forest Tenure, Governance and Emerging Global

Challenges

Arvind Khare, Andy White, Augusta Molnar, William Sunderlin

Conference on Challenges for Land Policy and Administration

World bank, Washington DC, 14 February 2008

Outline

1. Introduction- Shift from MDGs to Security- Underlying problems remain same- Convergence in Forest

landscapes2. Key Forces Shaping Future

Options and Opportunities– Growth of Global Economy– Energy: Big Changes and Big

Unknowns– Forest Industry and Trade– Convergence of Food, Fuel and

Fiber– Climate Change: More Heat and

More Uncertainty3. Challenges Facing Forests and

People- Human, Civil and Property Rights- Poverty in Forest Areas- Violent Conflicts in Forest Landscapes- Forest Conservation and Forest Refugees- Forests and Economic Growth

4. Way Forward

Introduction

• MDGs overtaken by politically pressing issues of security – energy, national, environmental (climate and water)

• Problems behind MDG’s are same (in many cases) as those behind insecurity – political marginalization, poverty, inequity, lack of respect for human rights and democratic processes

• Challenges converging on 30% of earth’s surface that is considered “forest” – poor and poorly governed

• Rights and democratic governance – not only moral imperative but social and economic, and ecological imperative

• BRICS driving Global Growth:– BRICs overtake the G6 by 2040– $55 trillion global GDP today, near $80 trillion by 2020, $150

trillion by 2100?• Growth in demand for commodities

– Food to double by 2020– Meat by 50%– Price of sugar doubled, oil, steel and gold tripled and copper

quadrupled since 2001• Land required for food alone would 3 billion ha (without in

productivity

Growth of BRICS and Global Demand

Global Economics: Goldman Sachs.

2003

Energy: Big Changes, Big Unknowns

Source: OECD/IEA (2006).

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

Q1/

05

Q2/

05

Q3/

05

Q4/

05

Q1/

06

Q2/

06

Q3/

06

Q4/

06

Q1/

07

($U

S b

lns)

Global Biofuels Financings: Q1/05-Q1/07

2010 2015 2030

With No New Government Measures On Climate Change

EuropeUSBrazilChinaIndia

14.8 14.9 8.3 0.7 0.1

18.0 19.8 10.4 1.5 0.2

26.6 22.8 20.3 7.9 2.4

Total 41.5 54.4 92.4

With Government Measures

Europe US Brazil China India

16.4 16.4 8.6 1.2 0.1

21.5 27.5 11.0 2.7 0.3

35.6 42.9 23.0 13.0 4.5

Total 48.8 73.0 146.7

Projected world biofuels consumption (MToe)• By 2030 Demand for energy 50%• Biofuels – increase in investment, consumption and area• Brazil – 4.5 million ha by 2016, oil palm in tropics – up by 5.5 million ha in last 10 years• 100 million Toe of biofuels = 35 million ha

Growth in demand for forest products in developing countries; Industrial wood consumption to reach 1.85 billion cu m by 2020Continued demand for fuelwood and charcoal in many parts of the worldTight demand and supply situationIncrease in price of wood and land (Uruguay)

Forest Industry and Trade

Convergence of Food, Fuel and Wood Fiber Markets

50

100

150

200

250

300M

ar-0

0

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

(Ind

ex M

arch

200

0=10

0)

(USA) Ethanol (USA) Gasoline (Brazil) Non-Conifer Roundw ood

(USA) Corn Palm Crude oil (MYR/ton)

.

Source: Bloomberg, Wood Resources, CIBC World Markets

• Key food, fuel and fiber prices have been on an upward trend. Is there any causation, or just correlation?• With biofuel production spreading, will the world price for oil become a support price for farm and forest products?

Climate Change: More Heat and More uncertainty

1. Climate Change – UNFCC (Kyoto) – CDM2. Carbon Markets – Public forests or large

plantations3. Bringing governments back to the table, robust

national, global regimes are inevitable but without clarity of rights and benefits more conflicts in forest landscapes

4. UNFCCC’s proposed forest mechanism (REDD, carbon markets, PES) – no discussion of local rights, equity and legitimacyPrevalent models of forest governance neither equipped to deal with the pressure emanating from converged markets nor or prepared to adopt complex trading schemes

Extensive Poverty; Slow/No Growth

-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

Africa Asia & Oceania L America & Caribbean Developing World

Ave

rage

Ann

ual G

DP

Per

Cap

ita G

row

th 1

975-

2004

High Forest Countries* Low Forest Countries

• extensive, chronic, poverty in forest areas

• “bottom billion” – 58 countries “falling apart and falling behind” (P. Collier ’07)

• ½ “bottom billion” are “forest rich”

• “growth” located in urban, coastal areas

• “forest rich” countries doing significantly worse

Economic Growth: ITTO Producer Countries Fare Worse Than Rest of Developing World – Why?

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Ave

rage

Ann

ual G

DP

per

Cap

ita G

row

th 1

975-

2004

ITTO Producer Countries Non ITTO Producer Countries

• Clues from economic literature:

• concentration of “rents” – “point source” problem

• focus on export of primary commodities

• growth comes from:

1. diffuse production systems (now often illegal)

2. returns to scale (SMEs) (now heavily constrained)

3. diversification of exports (now often discouraged)

Relationship between forest cover and select governance indicator

-2.50

-2.00

-1.50

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

0 10 20 30 40 50 60 70 80 90 100

Percentage of land covered by forests

Vo

ice

and

Acc

ou

nta

bil

ity

Ind

icat

or

Sco

re

No conclusive correlation between the forest cover in a country and its score on a governance indicator. Source: World Bank “Governance Matters” 2007. This dataset includes indicators for 6 dimensions of governance: Voice and Accountability, Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption.

Forests and Governance

Governance indicators for ITTO producer countries vs. other developing countries

-1.5

-1

-0.5

0

0.5

1

1.5

Rule of Law Control ofCorruption

Political Stability

Wo

rld

Ba

nk

go

ve

rna

nc

e in

de

xe

s

ITTO Producer Countries

Other developing countries(non ITTO producer)

The ITTO producer countries score lower in all categories, and for the 3 represented above, this difference is statistically significant (.05 double tailed t-test). This tends to show that it is not merely the presence of forest, but of a large export-oriented forest industry that is correlated to poor governance performances.

Governance: ITTO Countries Fare Worse than Other Developing Countries

Among the 33 ITTO producer countries: 27 (81%) are more prone to political instability than countries with similar income levels. 72% of them have lower respect for the rule of law than countries in the same income category. 70% of them have a higher corruption rate than countries within the same GDP range.

Both Trade and Aid models need to be revamped

Where have we been investing? ITTO – industrial concession model; WB – industrial concession model – Cambodia, Africa; IDB, ADB – same. Bilaterals – “social” forestry, trust funds to Banks.

What has industrial/trade model wrought?

Continued threat and changing nature of violent conflict – in forested countries

In the past twenty years 30 countries in the tropical regions of the world have experienced significant conflict between armed groups in forest areas.

Source: D.Kaimowitz ETFRN NEWS 43/44

Forests in Conflict Zones since 1990Doris Capistrano, Ruben de Koning, Yurdi Yasmi

Continent forest threate

ned (‘000 Sq km, %

of total)

Population

threatened (x

1.000.000)

Africa 1.300 (53%)

52

Latin America

504 (21%

)

13

South/ Southeast Asia

521 (22%

)

63

Europe/ Central Asia/ N America

104 (4%)

-

Total 2.429

127

•9% of all forest, 20 % of forest in the tropics threatened, spread over 29 countries.

•Most threatened forest in Africa, most of 127 million forest dwellers potentially affected live in Asia.

BUT WHERE DOES THE FOREST COME IN?

•Good news: armed conflicts are declining.•Bad news: human rights violations continue at the same rate.

Role of the Forest and Forest Rights

• In 15 of 25 forest was used as cover (Sierra Leone, Myanmar).

• In 7 of 15 armed groups used forest for finance (Liberia, Cambodia).

• In 9 out of 25 countries disputed forest access/ownership added to grievances that motivated armed conflict (Philippines, Mexico).

• Equally, disputed tenure underlies about 40 % of localised low intensity forest related conflicts (118 Cases across the globe).

Implications

1.We’re not equipped to deal with past problems, much less current crises

2.Rethink what forest “development” is doing:

1.Focus on development in forest areas not on forests;

2.Reconsider models of trade and aid in forests3.Reconsider the conservation models4.Engage emerging global/national regime on

climate change5.Get beyond “the forest sector” – engage

ministries that will shape the future (land, energy, trade)

Build on, strengthen, what’s new and what’s working

1. Civil society is growing in strength and capacity

2. (Some) governments are increasingly open to reforms

3. Increasing market opportunity for small-scale enterprises – leading to Growth

4. Conservation organizations are reconsidering human rights and rethinking approaches

5. New development approaches, partnerships emerging (e.g. VPAs)

More of the same will not work – x ha of Pas, Y ha of certified forests etc.

For those who care about rural people and forests -

situation never so daunting, opportunity for

a dramatic difference never so great-

We must do things differently

www.rightsandresources.org