CHALLENGE
Although overseas development assistance for forests appears to have modestly increased in the past few years, and although many new promising mechanisms and sources are emerging, analysis reveals that the gap between the needs and existing funding for sustainable forest management is still very wide. There is a need for substantial new and additional funding from all sources to support sustainable forest management and make implementation the Non-Legally Binding Instrument (NLBI) effective on the ground.

APPROACH
In 2008, PROFOR financed analysis of funding sources and gaps towards implementing the NLBI in preparation for deliberations at the UNFF's Ad-Hoc Expert Group on finance.

RESULTS
This analysis presented an overview of the specific elements of the NLBI, including national measures, multilateral assistance, international cooperation and corresponding existing sources, and drew conclusions on the gap between existing financing flows and actual needs.  It served to provide policy advice to the Advisory Group on Finance of the Collaborative Partnership on Forests and the Director/Officer-in-Charge of the UNFF Secretariat on investment flows and finance schemes.

The study team developed a methodology for the mapping exercise, conducted analysis of the availability and scope of current funding sources, reviewed new developments in the climate change regime relating to forest finance and accessing sources and mechanisms for implementing the NLBI, and identified sources of funding for the various countries according to multiple criteria, as well as funding gaps.

The study also reviewed the thematic (planted forests, capacity building, processing, natural forest management, protected areas, etc.) and regional focus (Africa, Low Forest Cover Countries, etc.) of the flow of funding/investment as well as presented a short description of the governance structures of multilateral funding sources/mechanisms (e.g., Global Environment Facility, World Bank, etc.)

The analysis concluded that there was a substantial need for new and additional funding from all sources to support SFM and make the NLBI implementation effective on the ground. Although many new promising mechanisms and sources were emerging no serious deliberation to define and develop a SFM-specific funding mechanism or instrument existed.   Although ODA for forests appeared to have increased modestly in recent few years, concerted efforts were needed from both donor and recipient countries to mobilize more resources. 

CHALLENGE
Although overseas development assistance for forests appears to have modestly increased in the past few years, and although many new promising mechanisms and sources are emerging, analysis reveals that the gap between the needs and existing funding for sustainable forest management is still very wide. There is a need for substantial new and additional funding from all sources to support sustainable forest management and make implementation the Non-Legally Binding Instrument (NLBI) effective on the ground.

APPROACH
In 2008, PROFOR financed analysis of funding sources and gaps towards implementing the NLBI in preparation for deliberations at the UNFF's Ad-Hoc Expert Group on finance.

RESULTS
This analysis presented an overview of the specific elements of the NLBI, including national measures, multilateral assistance, international cooperation and corresponding existing sources, and drew conclusions on the gap between existing financing flows and actual needs.  It served to provide policy advice to the Advisory Group on Finance of the Collaborative Partnership on Forests and the Director/Officer-in-Charge of the UNFF Secretariat on investment flows and finance schemes.

The study team developed a methodology for the mapping exercise, conducted analysis of the availability and scope of current funding sources, reviewed new developments in the climate change regime relating to forest finance and accessing sources and mechanisms for implementing the NLBI, and identified sources of funding for the various countries according to multiple criteria, as well as funding gaps.

The study also reviewed the thematic (planted forests, capacity building, processing, natural forest management, protected areas, etc.) and regional focus (Africa, Low Forest Cover Countries, etc.) of the flow of funding/investment as well as presented a short description of the governance structures of multilateral funding sources/mechanisms (e.g., Global Environment Facility, World Bank, etc.)

The analysis concluded that there was a substantial need for new and additional funding from all sources to support SFM and make the NLBI implementation effective on the ground. Although many new promising mechanisms and sources were emerging no serious deliberation to define and develop a SFM-specific funding mechanism or instrument existed.   Although ODA for forests appeared to have increased modestly in recent few years, concerted efforts were needed from both donor and recipient countries to mobilize more resources. 

CHALLENGE

In 2007, Indonesia was committed to Reducing emissions from deforestation and forest degradation but was aware of outstanding methodological and financial issues that could stand in its way.

APPROACH

The Indonesia Forest Climate Alliance (IFCA), a study group consisting of Ministry experts as well as researchers from a range of national and international institutions, was created to provide research inputs with support from a core group of donors, including PROFOR, the  World Bank, the UK Department for International Development (DFID), the Australian Government and Deutche Gesellschaft fur Technische Zusammernarbeit (GTZ).

The objective of the analysis was to clarify possible strategies for REDD in Indonesia‘s major forest land use types and identify pilot projects for testing the potential of “avoided deforestation” payments. It analyzed the reduced level of emissions that could be anticipated through introduction of improved land use and land conversion strategies in five forest land use categories, namely: protected areas, production forests, forests being managed to provide raw material for the pulp and paper industry, for the oil palm industry and in peat lands. 

PROFOR made a significant contribution to financing a series of nine multi-stakeholder studies that assessed options for adjusting historical approaches to forest conservation, sustainable forest management and forest land use.

These studies analyzed how adjustment to forest conservation and land use strategies could lead to quantified and verifiable reduction in carbon emissions. Strong emphasis was given to linking climate change REDD initiatives to conservation and development strategies that would address poverty alleviation by engaging local communities as beneficiaries of programs for effective management of protected areas, for sustainable management of natural forests and for establishment by local communities and small holders of plantations and agro forestry crops such as oil palm on non forest and degraded lands.

• strengthened capacity for measurement and monitoring of forest change and carbon emissions,
• further exploration of potential carbon buyers and sellers,
• strengthened capacity for more effective forest governance (aimed especially at containment of illegal logging).
   

They also included provision for further development and testing of REDD payment distribution mechanisms.  The studies identified criteria and principles for the selection of pilot projects for implementation between 2009 and 2012 that would create opportunities to test the effectiveness of those land use strategies that would be most likely to slow deforestation and degradation.

CHALLENGE

In 2007, Indonesia was committed to Reducing emissions from deforestation and forest degradation but was aware of outstanding methodological and financial issues that could stand in its way.

APPROACH

The Indonesia Forest Climate Alliance (IFCA), a study group consisting of Ministry experts as well as researchers from a range of national and international institutions, was created to provide research inputs with support from a core group of donors, including PROFOR, the  World Bank, the UK Department for International Development (DFID), the Australian Government and Deutche Gesellschaft fur Technische Zusammernarbeit (GTZ).

The objective of the analysis was to clarify possible strategies for REDD in Indonesia‘s major forest land use types and identify pilot projects for testing the potential of “avoided deforestation” payments. It analyzed the reduced level of emissions that could be anticipated through introduction of improved land use and land conversion strategies in five forest land use categories, namely: protected areas, production forests, forests being managed to provide raw material for the pulp and paper industry, for the oil palm industry and in peat lands. 

PROFOR made a significant contribution to financing a series of nine multi-stakeholder studies that assessed options for adjusting historical approaches to forest conservation, sustainable forest management and forest land use.

These studies analyzed how adjustment to forest conservation and land use strategies could lead to quantified and verifiable reduction in carbon emissions. Strong emphasis was given to linking climate change REDD initiatives to conservation and development strategies that would address poverty alleviation by engaging local communities as beneficiaries of programs for effective management of protected areas, for sustainable management of natural forests and for establishment by local communities and small holders of plantations and agro forestry crops such as oil palm on non forest and degraded lands.

• strengthened capacity for measurement and monitoring of forest change and carbon emissions,
• further exploration of potential carbon buyers and sellers,
• strengthened capacity for more effective forest governance (aimed especially at containment of illegal logging).
   

They also included provision for further development and testing of REDD payment distribution mechanisms.  The studies identified criteria and principles for the selection of pilot projects for implementation between 2009 and 2012 that would create opportunities to test the effectiveness of those land use strategies that would be most likely to slow deforestation and degradation.

CHALLENGE

In 2007, Indonesia was committed to Reducing emissions from deforestation and forest degradation but was aware of outstanding methodological and financial issues that could stand in its way.

APPROACH

The Indonesia Forest Climate Alliance (IFCA), a study group consisting of Ministry experts as well as researchers from a range of national and international institutions, was created to provide research inputs with support from a core group of donors, including PROFOR, the  World Bank, the UK Department for International Development (DFID), the Australian Government and Deutche Gesellschaft fur Technische Zusammernarbeit (GTZ).

The objective of the analysis was to clarify possible strategies for REDD in Indonesia‘s major forest land use types and identify pilot projects for testing the potential of “avoided deforestation” payments. It analyzed the reduced level of emissions that could be anticipated through introduction of improved land use and land conversion strategies in five forest land use categories, namely: protected areas, production forests, forests being managed to provide raw material for the pulp and paper industry, for the oil palm industry and in peat lands. 

PROFOR made a significant contribution to financing a series of nine multi-stakeholder studies that assessed options for adjusting historical approaches to forest conservation, sustainable forest management and forest land use.

These studies analyzed how adjustment to forest conservation and land use strategies could lead to quantified and verifiable reduction in carbon emissions. Strong emphasis was given to linking climate change REDD initiatives to conservation and development strategies that would address poverty alleviation by engaging local communities as beneficiaries of programs for effective management of protected areas, for sustainable management of natural forests and for establishment by local communities and small holders of plantations and agro forestry crops such as oil palm on non forest and degraded lands.

• strengthened capacity for measurement and monitoring of forest change and carbon emissions,
• further exploration of potential carbon buyers and sellers,
• strengthened capacity for more effective forest governance (aimed especially at containment of illegal logging).
   

They also included provision for further development and testing of REDD payment distribution mechanisms.  The studies identified criteria and principles for the selection of pilot projects for implementation between 2009 and 2012 that would create opportunities to test the effectiveness of those land use strategies that would be most likely to slow deforestation and degradation.

CHALLENGE

In 2007, Indonesia was committed to Reducing emissions from deforestation and forest degradation but was aware of outstanding methodological and financial issues that could stand in its way.

APPROACH

The Indonesia Forest Climate Alliance (IFCA), a study group consisting of Ministry experts as well as researchers from a range of national and international institutions, was created to provide research inputs with support from a core group of donors, including PROFOR, the  World Bank, the UK Department for International Development (DFID), the Australian Government and Deutche Gesellschaft fur Technische Zusammernarbeit (GTZ).

The objective of the analysis was to clarify possible strategies for REDD in Indonesia‘s major forest land use types and identify pilot projects for testing the potential of “avoided deforestation” payments. It analyzed the reduced level of emissions that could be anticipated through introduction of improved land use and land conversion strategies in five forest land use categories, namely: protected areas, production forests, forests being managed to provide raw material for the pulp and paper industry, for the oil palm industry and in peat lands. 

PROFOR made a significant contribution to financing a series of nine multi-stakeholder studies that assessed options for adjusting historical approaches to forest conservation, sustainable forest management and forest land use.

These studies analyzed how adjustment to forest conservation and land use strategies could lead to quantified and verifiable reduction in carbon emissions. Strong emphasis was given to linking climate change REDD initiatives to conservation and development strategies that would address poverty alleviation by engaging local communities as beneficiaries of programs for effective management of protected areas, for sustainable management of natural forests and for establishment by local communities and small holders of plantations and agro forestry crops such as oil palm on non forest and degraded lands.

• strengthened capacity for measurement and monitoring of forest change and carbon emissions,
• further exploration of potential carbon buyers and sellers,
• strengthened capacity for more effective forest governance (aimed especially at containment of illegal logging).
   

They also included provision for further development and testing of REDD payment distribution mechanisms.  The studies identified criteria and principles for the selection of pilot projects for implementation between 2009 and 2012 that would create opportunities to test the effectiveness of those land use strategies that would be most likely to slow deforestation and degradation.

CHALLENGE

In 2007, Indonesia was committed to Reducing emissions from deforestation and forest degradation but was aware of outstanding methodological and financial issues that could stand in its way.

APPROACH

The Indonesia Forest Climate Alliance (IFCA), a study group consisting of Ministry experts as well as researchers from a range of national and international institutions, was created to provide research inputs with support from a core group of donors, including PROFOR, the  World Bank, the UK Department for International Development (DFID), the Australian Government and Deutche Gesellschaft fur Technische Zusammernarbeit (GTZ).

The objective of the analysis was to clarify possible strategies for REDD in Indonesia‘s major forest land use types and identify pilot projects for testing the potential of “avoided deforestation” payments. It analyzed the reduced level of emissions that could be anticipated through introduction of improved land use and land conversion strategies in five forest land use categories, namely: protected areas, production forests, forests being managed to provide raw material for the pulp and paper industry, for the oil palm industry and in peat lands. 

PROFOR made a significant contribution to financing a series of nine multi-stakeholder studies that assessed options for adjusting historical approaches to forest conservation, sustainable forest management and forest land use.

These studies analyzed how adjustment to forest conservation and land use strategies could lead to quantified and verifiable reduction in carbon emissions. Strong emphasis was given to linking climate change REDD initiatives to conservation and development strategies that would address poverty alleviation by engaging local communities as beneficiaries of programs for effective management of protected areas, for sustainable management of natural forests and for establishment by local communities and small holders of plantations and agro forestry crops such as oil palm on non forest and degraded lands.

• strengthened capacity for measurement and monitoring of forest change and carbon emissions,
• further exploration of potential carbon buyers and sellers,
• strengthened capacity for more effective forest governance (aimed especially at containment of illegal logging).
   

They also included provision for further development and testing of REDD payment distribution mechanisms.  The studies identified criteria and principles for the selection of pilot projects for implementation between 2009 and 2012 that would create opportunities to test the effectiveness of those land use strategies that would be most likely to slow deforestation and degradation.

CHALLENGE

In 2007, Indonesia was committed to Reducing emissions from deforestation and forest degradation but was aware of outstanding methodological and financial issues that could stand in its way.

APPROACH

The Indonesia Forest Climate Alliance (IFCA), a study group consisting of Ministry experts as well as researchers from a range of national and international institutions, was created to provide research inputs with support from a core group of donors, including PROFOR, the  World Bank, the UK Department for International Development (DFID), the Australian Government and Deutche Gesellschaft fur Technische Zusammernarbeit (GTZ).

The objective of the analysis was to clarify possible strategies for REDD in Indonesia‘s major forest land use types and identify pilot projects for testing the potential of “avoided deforestation” payments. It analyzed the reduced level of emissions that could be anticipated through introduction of improved land use and land conversion strategies in five forest land use categories, namely: protected areas, production forests, forests being managed to provide raw material for the pulp and paper industry, for the oil palm industry and in peat lands. 

PROFOR made a significant contribution to financing a series of nine multi-stakeholder studies that assessed options for adjusting historical approaches to forest conservation, sustainable forest management and forest land use.

These studies analyzed how adjustment to forest conservation and land use strategies could lead to quantified and verifiable reduction in carbon emissions. Strong emphasis was given to linking climate change REDD initiatives to conservation and development strategies that would address poverty alleviation by engaging local communities as beneficiaries of programs for effective management of protected areas, for sustainable management of natural forests and for establishment by local communities and small holders of plantations and agro forestry crops such as oil palm on non forest and degraded lands.

• strengthened capacity for measurement and monitoring of forest change and carbon emissions,
• further exploration of potential carbon buyers and sellers,
• strengthened capacity for more effective forest governance (aimed especially at containment of illegal logging).
   

They also included provision for further development and testing of REDD payment distribution mechanisms.  The studies identified criteria and principles for the selection of pilot projects for implementation between 2009 and 2012 that would create opportunities to test the effectiveness of those land use strategies that would be most likely to slow deforestation and degradation.

CHALLENGE

Kazakhstan is a forest-scarce country, with forests covering only 4.6 percent of the total area. Nearly 90 percent of the land is made up of steppe, desert and semi-desert. 26 million hectares are designated as forest estate (i.e. the forest fund), but less than half of this is actually covered with forest (12.5 million hectares).

The national state agency in charge of forests manages 5.78 million hectares, or 20 percent of the forest fund. Regional governments manage 79 percent of the forest fund, while privately owned forest area is minimal. The 2003 Forest Code makes special provision for the establishment of timber plantations in the forest fund through a variety of mechanisms, including through partnership with the private sector. However, despite these provisions and the availability of suitable land, the private sector has not been heavily involved in establishing plantations in the forest fund lands.

The recently completed Forest Protection Reforestation Project (FPRP) demonstrated significant demand for Participatory Forest Management, meaning where local communities participate in the management of forest resources in and around their communities. Results from the FPRP were influential in making changes to the Forest Code in 2012, including specific provisions for participatory/community forest management in the 2003 Forest Code.

APPROACH

This activity builds on the FPRP and will contribute to the analysis and research required for the preparation of the proposed Forestry Development Project, which includes expanded components on participatory forest management and the establishment of plantations in collaboration with the private sector.

Specifically, this activity will:

1. Analyze how land under the forest fund is currently being used, in order to determine to which areas are suitable for afforestation in partnership with the private sector and/or local communities.

2. Analyze the legal, regulatory, institutional and fiscal framework with respect to establishing plantations in collaboration with the private sector and local communities. This task will identify the reasons why there has been no uptake of the relevant provisions in the 2003 Forest Code, look into possible tenure models, and propose policy options.

3. Review attitudes held by private sector entities and local communities towards establishing plantations. A limited survey will interview potential investors and local communities.

4. Analyze market conditions and estimate demand for plantation products such as fuel wood; wood chips; pulp/chipboard; timber; and - in the case of local community forests -potentially fruits and nuts. This task will help ascertain local market prices for possible plantation products, and estimate the need for establishing local processing plants and the likelihood of there being sufficient local investors.

5. Assess the overall economic viability of different plantations and tenure models.

Based on these outputs, economic models will be developed to investigate the economic viability of establishing large-scale plantations in collaboration with the private sector and local communities.

RESULTS

This activity concluded in September 2018. The economic analysis showed that from the private sector perspective, the most viable plantation models are forest nurseries (pine, birch, spruce) to raise seedlings for the sale for ornamental and landscaping purposes, and fruit, nut and berry plantations. For energy plantations (poplar, saxaul, pine), once carbon values are factored in, the economic returns and thus the benefits for the economy as a whole are quite high. This provides good justification for the government to support the private sector in developing forest plantations, e.g. in the form of taking on the initial costs and risks of establishing fast growing plantations or providing payments for the global carbon benefits generated by plantations. In addition, this activity revealed that a much larger potential for suitable plantation areas seems to lie outside of the State Forest Fund altogether, on bare lands and naturally afforested lands within the agricultural land category (under pasture or straw-cutting lands).

This activity has equipped decision makers by contributing to a better understanding of the legal, regulatory and financial obstacles and challenges facing Kazakhstan in developing private plantations. The knowledge generated further underlines the importance of engaging private investors and communities in the establishment of plantations, particularly in view of the global benefits provided by afforestation (e.g. carbon sequestration) and Kazakhstan’s international commitments to combat climate change. As such, the activity offers recommendations to leverage the carbon benefits provided by forest plantations (e.g. provision of carbon neutral sustainable goods and services) and better recognize and integrate them in national policy and forest management considerations.

For more information, refer to the activity's synthesis paper on Kazakhstan Community-Private Plantations: Analysis to Better Understand the Potential for Developing Forest Plantations.

CHALLENGE

Kazakhstan is a forest-scarce country, with forests covering only 4.6 percent of the total area. Nearly 90 percent of the land is made up of steppe, desert and semi-desert. 26 million hectares are designated as forest estate (i.e. the forest fund), but less than half of this is actually covered with forest (12.5 million hectares).

The national state agency in charge of forests manages 5.78 million hectares, or 20 percent of the forest fund. Regional governments manage 79 percent of the forest fund, while privately owned forest area is minimal. The 2003 Forest Code makes special provision for the establishment of timber plantations in the forest fund through a variety of mechanisms, including through partnership with the private sector. However, despite these provisions and the availability of suitable land, the private sector has not been heavily involved in establishing plantations in the forest fund lands.

The recently completed Forest Protection Reforestation Project (FPRP) demonstrated significant demand for Participatory Forest Management, meaning where local communities participate in the management of forest resources in and around their communities. Results from the FPRP were influential in making changes to the Forest Code in 2012, including specific provisions for participatory/community forest management in the 2003 Forest Code.

APPROACH

This activity builds on the FPRP and will contribute to the analysis and research required for the preparation of the proposed Forestry Development Project, which includes expanded components on participatory forest management and the establishment of plantations in collaboration with the private sector.

Specifically, this activity will:

1. Analyze how land under the forest fund is currently being used, in order to determine to which areas are suitable for afforestation in partnership with the private sector and/or local communities.

2. Analyze the legal, regulatory, institutional and fiscal framework with respect to establishing plantations in collaboration with the private sector and local communities. This task will identify the reasons why there has been no uptake of the relevant provisions in the 2003 Forest Code, look into possible tenure models, and propose policy options.

3. Review attitudes held by private sector entities and local communities towards establishing plantations. A limited survey will interview potential investors and local communities.

4. Analyze market conditions and estimate demand for plantation products such as fuel wood; wood chips; pulp/chipboard; timber; and - in the case of local community forests -potentially fruits and nuts. This task will help ascertain local market prices for possible plantation products, and estimate the need for establishing local processing plants and the likelihood of there being sufficient local investors.

5. Assess the overall economic viability of different plantations and tenure models.

Based on these outputs, economic models will be developed to investigate the economic viability of establishing large-scale plantations in collaboration with the private sector and local communities.

RESULTS

This activity concluded in September 2018. The economic analysis showed that from the private sector perspective, the most viable plantation models are forest nurseries (pine, birch, spruce) to raise seedlings for the sale for ornamental and landscaping purposes, and fruit, nut and berry plantations. For energy plantations (poplar, saxaul, pine), once carbon values are factored in, the economic returns and thus the benefits for the economy as a whole are quite high. This provides good justification for the government to support the private sector in developing forest plantations, e.g. in the form of taking on the initial costs and risks of establishing fast growing plantations or providing payments for the global carbon benefits generated by plantations. In addition, this activity revealed that a much larger potential for suitable plantation areas seems to lie outside of the State Forest Fund altogether, on bare lands and naturally afforested lands within the agricultural land category (under pasture or straw-cutting lands).

This activity has equipped decision makers by contributing to a better understanding of the legal, regulatory and financial obstacles and challenges facing Kazakhstan in developing private plantations. The knowledge generated further underlines the importance of engaging private investors and communities in the establishment of plantations, particularly in view of the global benefits provided by afforestation (e.g. carbon sequestration) and Kazakhstan’s international commitments to combat climate change. As such, the activity offers recommendations to leverage the carbon benefits provided by forest plantations (e.g. provision of carbon neutral sustainable goods and services) and better recognize and integrate them in national policy and forest management considerations.

For more information, refer to the activity's synthesis paper on Kazakhstan Community-Private Plantations: Analysis to Better Understand the Potential for Developing Forest Plantations.