CHALLENGE

Brazil’s Forest Code requires all private landowners to retain the original forest or woodland on 20% of their land to ensure the provision of ecosystem services. Over the years, however, due to poor enforcement of the law, most landowners have not kept adequate areas devoted to forest reserves ("Reserva Legal"). The New Forest Code (Law 12.651/2014) now allows the re-establishment of the forest reserve either on-farm or on other private and public lands that are currently degraded or under-utilized. In an effort to facilitate compliance, the new Forest Code also allows new generation forest plantations of native species that can be harvested, provided adequate attention is devoted to maintaining their ecosystem services (protection of watersheds and biological diversity).

APPROACH

The program consists of four elements:

1. Review of the economic and financial analysis of the proposed models, carried out by the State Secretariat for Environment (Secretaria do Meio Ambiente, SMA) in Sao Paulo, jointly with the Institute for Forest Research and Studies (IPEF).
2. Market study, which evaluates the market potential for key products considered under the replanting program by adapting the value chain approach already used under PROFOR.
3. Design of financing instruments, based on the review of existing instruments and dialogue with financing institutions.
4. Dissemination/Knowledge exchange which involves disseminating results of the study in three languages: Portuguese, English, and Spanish.

RESULTS

This activity is ongoing, to date. The following studies were completed:

(a) Assessing, validating, and adjusting, as needed, the analysis carried out on the economic viability of the proposed sustainable forest management (SFM) models 

(b) Assessing market potential for wood products (See attached report by Amantino Ramos de Freitas and summary by Maria Isabel Braga.)

(c) Evaluating existing studies and information, and implementing additional studies to fill existing information gaps, aiming at the elaboration of a business model for a multipurpose pilot forestry pole in the Paraíba do Sul River Basin

(d) Defining a research and development agenda based on what has already been done regarding forest restoration in the Mata Atlântica and Amazon biomes, and on an analysis of potential benefits based on the results of research already completed

Some key findings so far are:   

• All studies agreed that returns of investments in native species plantations could be high. Yet the level of risk is so high that in practice it is rare to find significant scale investments in native species. The time required for native species to produce valuable timber is significantly longer than the two exotic species that are produced on a large scale in Brazil, Eucalyptus and Pinus. This long period to recuperate the investment generates risks that are difficult to overcome. Research and development, which can reduce risks and variability of performances, can contribute to mitigate such risks. In addition, it is important to increase the emphasis on non-timber products (like fruits, palm hearth, and so on), which can reduce the period required to recuperate the investment.   
• Research and development (R&D) to scale up native species silviculture in Brazil. The study proved that, in some situations, planting native trees in Brazil can be a good yet risky business. 
• The study identified 30 native species with higher potential for commercial production of timber (15 species from the Atlantic biome and 15 from the Amazonian biome). Specific gaps and priorities were identified in eight research areas: (i) seeds and seedlings, (ii) forestry breeding and improvement, (iii) wood technology, (iv) topo climatic zoning, (v) forestry management, (vi) vegetative propagation, (vii) market for wood products, and (viii) policy and legislation. 
• The results have found that the cost to develop 30 species is around US$8 million over 20 years. The estimated results are as follows: (a) productivity to increase in the range of 25 percent in the short term and from 56 percent to 85 percent in the medium and long term, (b) forestry costs to decrease by 20 percent, and (c) round wood to lumber conversion rates from 20 percent to 40 percent in thinning, and from 40 percent to 50 percent in the final cut. Together, these three variables could possibly increase and impact IRR up by 5 percent, making forestry with native species viable in Brazil, with a risk adjusted return comparable to mainstream investments such as eucalyptus plantations.
• For every US$1 dollar invested in R&D, there is an estimated gain of US$2.4 in benefits, with a necessary scale of at least 10,000 hectares to justify investments in R&D. In terms of scale, this means that US$8 million is needed for R&D plus US$100 million for forest assets (US$10,000 per hectare over 30 years). Based on the potential future market demand of tropical timber species, the study estimated a potential of more than 1 million hectares for silviculture with native species to meet future demand tropical lumber by the year 2050, corresponding to more than 10 percent of the Brazilian Nationally Determined Contribution target on restoration of degraded lands. The next step is to identify the specific interests of the multilateral agencies, public sector, private companies and financial sector to actually invest in such development program and native forestry plantation assets. 

These findings are informing a concept note for a new project proposal to the World Bank for implementation of commercially viable multi-purpose native tree forests.

More findings and results will be shared on this page when they become available.

CHALLENGE
 

Illegal logging is acute in the Russian Federation, particularly in the Far East which houses many valuable hardwood species. The problem has a strong negative influence on economic development in the regions, which can be measured by two indicators: the existing size of budget losses and the local, unreported income from illegal logging and associated timber trade. These two indicators hamper economic development not just in particular regions but in the country as a whole.

To further enhance forest governance and to target activities at the regional or district level, it is crucial for the government forestry agencies and legislative bodies to know both of the above-mentioned parameters. Not less important is to assess the effectiveness of prior governance measures on the basis of constant annual monitoring. Both of these needs can be met by developing and implementing a unified method for calculating (or estimating) the economic impacts of illegal activities, particularly the budget losses and unreported local revenues. Complementing efforts from different government agencies and environmental NGOs, which focus on the existing size of budget losses, this project aims to develop a unified method to quantify unreported income from illegal logging.
 

APPROACH

The project will be divided into two steps, the first step contains development of the methodology and the second one is the field testing of the methodology itself.

In order to develop a unified method to calculate economic losses, the project reviews different methods currently being employed both internationally and in Russia. Capitalizing on the strengths and addressing the weaknesses of existing approaches, PROFOR will develop a step-by-step valuation methodology.
The methodology will then be field tested in the Russian provinces of Khabarovskii and Primorskii Krais.
The output from this task will be set of estimated values for benefits and losses accruing to different stakeholders associated with the illegal timber trade, including government and local communities.

RESULTS

This activity is ongoing. Findings will be shared on this page when they become available. For stories and updates on related activities, follow us on Twitter and Facebook, or subscribe to our mailing list for regular updates.

CHALLENGE
 

Illegal logging is acute in the Russian Federation, particularly in the Far East which houses many valuable hardwood species. The problem has a strong negative influence on economic development in the regions, which can be measured by two indicators: the existing size of budget losses and the local, unreported income from illegal logging and associated timber trade. These two indicators hamper economic development not just in particular regions but in the country as a whole.

To further enhance forest governance and to target activities at the regional or district level, it is crucial for the government forestry agencies and legislative bodies to know both of the above-mentioned parameters. Not less important is to assess the effectiveness of prior governance measures on the basis of constant annual monitoring. Both of these needs can be met by developing and implementing a unified method for calculating (or estimating) the economic impacts of illegal activities, particularly the budget losses and unreported local revenues. Complementing efforts from different government agencies and environmental NGOs, which focus on the existing size of budget losses, this project aims to develop a unified method to quantify unreported income from illegal logging.
 

APPROACH

The project will be divided into two steps, the first step contains development of the methodology and the second one is the field testing of the methodology itself.

In order to develop a unified method to calculate economic losses, the project reviews different methods currently being employed both internationally and in Russia. Capitalizing on the strengths and addressing the weaknesses of existing approaches, PROFOR will develop a step-by-step valuation methodology.
The methodology will then be field tested in the Russian provinces of Khabarovskii and Primorskii Krais.
The output from this task will be set of estimated values for benefits and losses accruing to different stakeholders associated with the illegal timber trade, including government and local communities.

RESULTS

This activity is ongoing. Findings will be shared on this page when they become available. For stories and updates on related activities, follow us on Twitter and Facebook, or subscribe to our mailing list for regular updates.

CHALLENGE

Across the world, the growing scarcity of ecosystem services has led to a flurry of conservation innovations over the past decade in the form of payment schemes and nascent markets for these services. The global economic value of ecosystem services is estimated in the trillions of dollars, though actual payments for protecting these services are developing unevenly around the globe.

While Latin America has experimented extensively with diverse types of systems, developments in Asia and in Africa have lagged behind, although there is a large pipeline of projects ready to be initiated by international development banks and funds.

Against this global backdrop, the Chinese government made extraordinary efforts in driving some of the largest public payment schemes for ecosystem services in the world. As of 2005, over RMB 50 billion had already been spent on the Sloping Land Conversion Program, and 7.2 million ha of cropland enrolled. The government also spent RMB 2 billion annually on the Forest Ecosystem Compensation Fund, which in 2005 covered 26 million ha of forest area across 11 provinces in China.

Given concerns about the effectiveness and financial sustainability of these efforts, policy circles debated how to improve these programs as well as how to explore and develop other market-based tools and regulatory innovations to better address China's environmental and development challenges.

APPROACH

To inform this growing debate, PROFOR supported the development of a report entitled "Developing Future Ecosystem Service Payments in China: Lessons Learned from International Experience". The China Council on International Cooperation on Environment and Development (CCICED) Eco-compensation Taskforce asked Forest Trends to develop this report as a summary of the global experience in payments for ecosystem services (PES), emphasizing lessons of particular relevance to China.

MAIN FINDINGS

The key issues regarding the effectiveness and efficiency of PES programs are: the importance of policy, institutional and legal frameworks; improving the poverty reduction impacts of PES by engaging local communities in the process of negotiation, design and implementation; devising methods to improve targeting; and the need to engage the private sector in order to better capture the value of ecosystem services and to improve the financial sustainability of current and future PES programs by relieving the burden on public funds.

International experience also suggests that by bringing in local communities and governments more closely into all aspects and stages of PES design and implementation, China will be able to significantly improve equity and efficiency issues in current and future PES schemes, and work toward reconciling the dual goals of conservation and sustainable rural development.

CHALLENGE

Across the world, the growing scarcity of ecosystem services has led to a flurry of conservation innovations over the past decade in the form of payment schemes and nascent markets for these services. The global economic value of ecosystem services is estimated in the trillions of dollars, though actual payments for protecting these services are developing unevenly around the globe.

While Latin America has experimented extensively with diverse types of systems, developments in Asia and in Africa have lagged behind, although there is a large pipeline of projects ready to be initiated by international development banks and funds.

Against this global backdrop, the Chinese government made extraordinary efforts in driving some of the largest public payment schemes for ecosystem services in the world. As of 2005, over RMB 50 billion had already been spent on the Sloping Land Conversion Program, and 7.2 million ha of cropland enrolled. The government also spent RMB 2 billion annually on the Forest Ecosystem Compensation Fund, which in 2005 covered 26 million ha of forest area across 11 provinces in China.

Given concerns about the effectiveness and financial sustainability of these efforts, policy circles debated how to improve these programs as well as how to explore and develop other market-based tools and regulatory innovations to better address China's environmental and development challenges.

APPROACH

To inform this growing debate, PROFOR supported the development of a report entitled "Developing Future Ecosystem Service Payments in China: Lessons Learned from International Experience". The China Council on International Cooperation on Environment and Development (CCICED) Eco-compensation Taskforce asked Forest Trends to develop this report as a summary of the global experience in payments for ecosystem services (PES), emphasizing lessons of particular relevance to China.

MAIN FINDINGS

The key issues regarding the effectiveness and efficiency of PES programs are: the importance of policy, institutional and legal frameworks; improving the poverty reduction impacts of PES by engaging local communities in the process of negotiation, design and implementation; devising methods to improve targeting; and the need to engage the private sector in order to better capture the value of ecosystem services and to improve the financial sustainability of current and future PES programs by relieving the burden on public funds.

International experience also suggests that by bringing in local communities and governments more closely into all aspects and stages of PES design and implementation, China will be able to significantly improve equity and efficiency issues in current and future PES schemes, and work toward reconciling the dual goals of conservation and sustainable rural development.

CHALLENGE

Across the world, the growing scarcity of ecosystem services has led to a flurry of conservation innovations over the past decade in the form of payment schemes and nascent markets for these services. The global economic value of ecosystem services is estimated in the trillions of dollars, though actual payments for protecting these services are developing unevenly around the globe.

While Latin America has experimented extensively with diverse types of systems, developments in Asia and in Africa have lagged behind, although there is a large pipeline of projects ready to be initiated by international development banks and funds.

Against this global backdrop, the Chinese government made extraordinary efforts in driving some of the largest public payment schemes for ecosystem services in the world. As of 2005, over RMB 50 billion had already been spent on the Sloping Land Conversion Program, and 7.2 million ha of cropland enrolled. The government also spent RMB 2 billion annually on the Forest Ecosystem Compensation Fund, which in 2005 covered 26 million ha of forest area across 11 provinces in China.

Given concerns about the effectiveness and financial sustainability of these efforts, policy circles debated how to improve these programs as well as how to explore and develop other market-based tools and regulatory innovations to better address China's environmental and development challenges.

APPROACH

To inform this growing debate, PROFOR supported the development of a report entitled "Developing Future Ecosystem Service Payments in China: Lessons Learned from International Experience". The China Council on International Cooperation on Environment and Development (CCICED) Eco-compensation Taskforce asked Forest Trends to develop this report as a summary of the global experience in payments for ecosystem services (PES), emphasizing lessons of particular relevance to China.

MAIN FINDINGS

The key issues regarding the effectiveness and efficiency of PES programs are: the importance of policy, institutional and legal frameworks; improving the poverty reduction impacts of PES by engaging local communities in the process of negotiation, design and implementation; devising methods to improve targeting; and the need to engage the private sector in order to better capture the value of ecosystem services and to improve the financial sustainability of current and future PES programs by relieving the burden on public funds.

International experience also suggests that by bringing in local communities and governments more closely into all aspects and stages of PES design and implementation, China will be able to significantly improve equity and efficiency issues in current and future PES schemes, and work toward reconciling the dual goals of conservation and sustainable rural development.

CHALLENGE
Growing demand for food, fuel and other commodities, coupled with natural resource scarcity, has created an urgent need to produce more with less. Intensified production on farmed land in the tropics will be necessary to protect intact ecosystems from conversion and reduce emissions from deforestation and forest degradation (REDD), and most ongoing efforts to prepare national REDD+ strategies have rightly acknowledged this potential.

A range of agroforestry and landscape restoration practices can respond to this intensification challenge, increasing soil fertility and crop productivity very significantly, often by an order of two to three times compared to current yields in many parts of the tropics. Agroforestry farming systems and more intensive tree planting and management systems can also act as a safety net for rural families during times of environmental stress, and provide a wide range of timber, fuels and non wood forest products. Arguably, no other form of agricultural land use can potentially lock up more carbon per hectare of cropland than farm forestry and agroforestry making these technologies the ideal vector for addressing both food security and climate change in overpopulated and degraded landscapes.

Yet, despite the very considerable body of on-farm experience which has been gained in agroforestry and other tree-based technologies, investment in these approaches has been lagging. The challenge ahead is not so much a shortage of scientific knowledge about suitable agroforestry or more intensive farm forestry systems, but rather a lack of understanding of farmers’ specific constraints to adoption, and deficiencies in policy support and investments to scale up already well proven techniques.

APPROACH
Building on PROFOR's past experience with Investment Forums in Africa, PROFOR organized with a number of partners a new investment forum hosted by the World Agroforestry Centre in Nairobi, Kenya. Gathering representatives of leading private sector financial institutions, forest and agribusiness companies, non-governmental organizations. national forest associations and high level national government policy leaders, the Forum helped to identify immediate investment opportunities, to discuss the main constraints to investment and to identify policy and institutional reforms needed to overcome those constraints, as well as mechanisms to help create an enabling climate for accelerated private sector investment.

MAIN POLICY MESSAGES

• Policies and institutions need to be reoriented to ensure that investments in trees and landscape restoration are addressed in the decentralization agenda.
• Improving value-addition at the local level can increase incentives for better management of landscapes and trees in farming systems.
• Payments for environmental services can help.  Markets for environmental services from trees and from better managed farming landscapes are potentially important for carbon sequestration, for biodiversity conservation, for tourism, for and watershed management.
• Forest organizations need to be revitalized.
• Rural development efforts should work across sectors to encourage synergies.
• Policies that support good governance encourage private investment.
• Conversely, policies that improve land, water and tree governance can minimize the risks of large-scale land acquisitions.

RESULTS
Besides a very successful forum which was attended by 100 participants in Nairobi in May 2011, this activity yielded a collection of background papers available on this page and an Overview piece for distribution at Forest Day 5. The theme is also resonant with the World Bank and development partners' growing interest in climate-smart agriculture.  

CHALLENGE
Growing demand for food, fuel and other commodities, coupled with natural resource scarcity, has created an urgent need to produce more with less. Intensified production on farmed land in the tropics will be necessary to protect intact ecosystems from conversion and reduce emissions from deforestation and forest degradation (REDD), and most ongoing efforts to prepare national REDD+ strategies have rightly acknowledged this potential.

A range of agroforestry and landscape restoration practices can respond to this intensification challenge, increasing soil fertility and crop productivity very significantly, often by an order of two to three times compared to current yields in many parts of the tropics. Agroforestry farming systems and more intensive tree planting and management systems can also act as a safety net for rural families during times of environmental stress, and provide a wide range of timber, fuels and non wood forest products. Arguably, no other form of agricultural land use can potentially lock up more carbon per hectare of cropland than farm forestry and agroforestry making these technologies the ideal vector for addressing both food security and climate change in overpopulated and degraded landscapes.

Yet, despite the very considerable body of on-farm experience which has been gained in agroforestry and other tree-based technologies, investment in these approaches has been lagging. The challenge ahead is not so much a shortage of scientific knowledge about suitable agroforestry or more intensive farm forestry systems, but rather a lack of understanding of farmers’ specific constraints to adoption, and deficiencies in policy support and investments to scale up already well proven techniques.

APPROACH
Building on PROFOR's past experience with Investment Forums in Africa, PROFOR organized with a number of partners a new investment forum hosted by the World Agroforestry Centre in Nairobi, Kenya. Gathering representatives of leading private sector financial institutions, forest and agribusiness companies, non-governmental organizations. national forest associations and high level national government policy leaders, the Forum helped to identify immediate investment opportunities, to discuss the main constraints to investment and to identify policy and institutional reforms needed to overcome those constraints, as well as mechanisms to help create an enabling climate for accelerated private sector investment.

MAIN POLICY MESSAGES

• Policies and institutions need to be reoriented to ensure that investments in trees and landscape restoration are addressed in the decentralization agenda.
• Improving value-addition at the local level can increase incentives for better management of landscapes and trees in farming systems.
• Payments for environmental services can help.  Markets for environmental services from trees and from better managed farming landscapes are potentially important for carbon sequestration, for biodiversity conservation, for tourism, for and watershed management.
• Forest organizations need to be revitalized.
• Rural development efforts should work across sectors to encourage synergies.
• Policies that support good governance encourage private investment.
• Conversely, policies that improve land, water and tree governance can minimize the risks of large-scale land acquisitions.

RESULTS
Besides a very successful forum which was attended by 100 participants in Nairobi in May 2011, this activity yielded a collection of background papers available on this page and an Overview piece for distribution at Forest Day 5. The theme is also resonant with the World Bank and development partners' growing interest in climate-smart agriculture.  

CHALLENGE
Growing demand for food, fuel and other commodities, coupled with natural resource scarcity, has created an urgent need to produce more with less. Intensified production on farmed land in the tropics will be necessary to protect intact ecosystems from conversion and reduce emissions from deforestation and forest degradation (REDD), and most ongoing efforts to prepare national REDD+ strategies have rightly acknowledged this potential.

A range of agroforestry and landscape restoration practices can respond to this intensification challenge, increasing soil fertility and crop productivity very significantly, often by an order of two to three times compared to current yields in many parts of the tropics. Agroforestry farming systems and more intensive tree planting and management systems can also act as a safety net for rural families during times of environmental stress, and provide a wide range of timber, fuels and non wood forest products. Arguably, no other form of agricultural land use can potentially lock up more carbon per hectare of cropland than farm forestry and agroforestry making these technologies the ideal vector for addressing both food security and climate change in overpopulated and degraded landscapes.

Yet, despite the very considerable body of on-farm experience which has been gained in agroforestry and other tree-based technologies, investment in these approaches has been lagging. The challenge ahead is not so much a shortage of scientific knowledge about suitable agroforestry or more intensive farm forestry systems, but rather a lack of understanding of farmers’ specific constraints to adoption, and deficiencies in policy support and investments to scale up already well proven techniques.

APPROACH
Building on PROFOR's past experience with Investment Forums in Africa, PROFOR organized with a number of partners a new investment forum hosted by the World Agroforestry Centre in Nairobi, Kenya. Gathering representatives of leading private sector financial institutions, forest and agribusiness companies, non-governmental organizations. national forest associations and high level national government policy leaders, the Forum helped to identify immediate investment opportunities, to discuss the main constraints to investment and to identify policy and institutional reforms needed to overcome those constraints, as well as mechanisms to help create an enabling climate for accelerated private sector investment.

MAIN POLICY MESSAGES

• Policies and institutions need to be reoriented to ensure that investments in trees and landscape restoration are addressed in the decentralization agenda.
• Improving value-addition at the local level can increase incentives for better management of landscapes and trees in farming systems.
• Payments for environmental services can help.  Markets for environmental services from trees and from better managed farming landscapes are potentially important for carbon sequestration, for biodiversity conservation, for tourism, for and watershed management.
• Forest organizations need to be revitalized.
• Rural development efforts should work across sectors to encourage synergies.
• Policies that support good governance encourage private investment.
• Conversely, policies that improve land, water and tree governance can minimize the risks of large-scale land acquisitions.

RESULTS
Besides a very successful forum which was attended by 100 participants in Nairobi in May 2011, this activity yielded a collection of background papers available on this page and an Overview piece for distribution at Forest Day 5. The theme is also resonant with the World Bank and development partners' growing interest in climate-smart agriculture.  

CHALLENGE
Growing demand for food, fuel and other commodities, coupled with natural resource scarcity, has created an urgent need to produce more with less. Intensified production on farmed land in the tropics will be necessary to protect intact ecosystems from conversion and reduce emissions from deforestation and forest degradation (REDD), and most ongoing efforts to prepare national REDD+ strategies have rightly acknowledged this potential.

A range of agroforestry and landscape restoration practices can respond to this intensification challenge, increasing soil fertility and crop productivity very significantly, often by an order of two to three times compared to current yields in many parts of the tropics. Agroforestry farming systems and more intensive tree planting and management systems can also act as a safety net for rural families during times of environmental stress, and provide a wide range of timber, fuels and non wood forest products. Arguably, no other form of agricultural land use can potentially lock up more carbon per hectare of cropland than farm forestry and agroforestry making these technologies the ideal vector for addressing both food security and climate change in overpopulated and degraded landscapes.

Yet, despite the very considerable body of on-farm experience which has been gained in agroforestry and other tree-based technologies, investment in these approaches has been lagging. The challenge ahead is not so much a shortage of scientific knowledge about suitable agroforestry or more intensive farm forestry systems, but rather a lack of understanding of farmers’ specific constraints to adoption, and deficiencies in policy support and investments to scale up already well proven techniques.

APPROACH
Building on PROFOR's past experience with Investment Forums in Africa, PROFOR organized with a number of partners a new investment forum hosted by the World Agroforestry Centre in Nairobi, Kenya. Gathering representatives of leading private sector financial institutions, forest and agribusiness companies, non-governmental organizations. national forest associations and high level national government policy leaders, the Forum helped to identify immediate investment opportunities, to discuss the main constraints to investment and to identify policy and institutional reforms needed to overcome those constraints, as well as mechanisms to help create an enabling climate for accelerated private sector investment.

MAIN POLICY MESSAGES

• Policies and institutions need to be reoriented to ensure that investments in trees and landscape restoration are addressed in the decentralization agenda.
• Improving value-addition at the local level can increase incentives for better management of landscapes and trees in farming systems.
• Payments for environmental services can help.  Markets for environmental services from trees and from better managed farming landscapes are potentially important for carbon sequestration, for biodiversity conservation, for tourism, for and watershed management.
• Forest organizations need to be revitalized.
• Rural development efforts should work across sectors to encourage synergies.
• Policies that support good governance encourage private investment.
• Conversely, policies that improve land, water and tree governance can minimize the risks of large-scale land acquisitions.

RESULTS
Besides a very successful forum which was attended by 100 participants in Nairobi in May 2011, this activity yielded a collection of background papers available on this page and an Overview piece for distribution at Forest Day 5. The theme is also resonant with the World Bank and development partners' growing interest in climate-smart agriculture.