Forests Sourcebook - HCV Resource Network

Besides channeling potential timber revenue away from
national development efforts—particularly from the people
living in and near the forests—the low prices at which these
concessions are often granted encourage waste, unsustainable
management, plundering for short-term gain, and
replacement by less valuable and less sustainable activities.
Strengthening of governance usually touches upon sensitive
local and national interests, which are benefiting from the
status quo.
Furthermore, growing populations lead to an increase in
the conversion of forests for other land uses (for example,
clearing of forests for agriculture; see figure 1). The Food
and Agriculture Organization (FAO) estimates that each
year 13 million hectares of forest are permanently converted
to agriculture, mostly in the tropics. Spillovers from poor
policies in other sectors can also contribute to rapid rates of
deforestation. This has been particularly evident in recent
decades, for example, in the conversion of forest areas to oil
palm plantations in Indonesia.
Although some forest products, primarily lumber and
fuelwood, are delivered through markets, the economic
value of many of the other forests goods and services (for
example, environmental services, biodiversity, and carbon
sequestration) go unrecognized by the market. Creative new
mechanisms are needed to compensate those preserving
environmental services and to provide incentives through
market-based methods to reduce loss of forests’ environmental
services.
Safeguarding global public goods is not a national priority
in countries struggling with problems of poverty reduction.
As a result, forests’ potential is unexploited in developing
countries because the forest sector has to compete for
development investment and governments have limited
interest in investing in the sector through loans when the
benefits are often global rather than national or local. These
investments must compete for resources against such high
priority sectors as health, education, and infrastructure.
Weak governance in the forest sector is pervasive and leads
to ineffective use of funds. Forest authorities often lack the
capacity to implement policy reforms and programs effectively
and have limited capacity to access, and make use of,
extra-budgetary financing. Furthermore, incentives for the
private sector to implement sustainable forest management
are either absent or limited.
The forest sector represents one of the most challenging
areas in the development of community and global public
policy. Despite significant resource flows, international concern,
and political pressure, a combination of market and
institutional failures has led to forests failing to realize their
potential to reduce poverty, promote economic growth, and
be valued for their contributions to the local and global
environment.
Figure 1
60,000
50,000
40,000
30,000
20,000
10,000
Main Causes of Deforestation, by
World Region, 1990–2000
Conversion of forest area to small-scale
shifting agriculture
Conversion of forest area to small-scale
permanent agriculture and other land uses
Conversion of forest area to large-scale
permanent agriculture or other land uses
Conversion to agricultural and forest
plantations
Africa
Latin
America
Asia
Pan-
Tropical
UNLOCKING FORESTS’ POTENTIAL
The problem of sustainable forest management (SFM) is
highly complex and can only be addressed by a range of
actions targeted at (i) the policy framework, (ii) strengthening
of governance, (iii) removal of market distortions
and engaging market actors, (iv) full valuation and sharing
of forest benefits through market and other mechanisms,
(v) capacity building, and (vi) mobilization of adequate
financial resources.
Countering the drivers of deforestation and forest degradation
to enable sustainable forest management will require,
among other factors, greater innovation and better coordination
in global forestry dialogue, national sectoral planning,
and technical analysis that addresses these forces and factors.
Capturing the potential of forests to advance poverty reduction,
support economic growth, and deliver local and global
environmental services will require donors to work in close
coordination with governments, the private sector, and other
key stakeholders in the forest sector, and to link forest sector
activities with national strategies. This can involve working
with emerging external constraints and opportunities.
2 INTRODUCTION: OPPORTUNITIES AND CHALLENGES IN THE FOREST SECTOR