Excellencies, distinguished guests, ladies and gentlemen
It is a great honor and pleasure for me to be here today to address this landmark Ministerial meeting and discuss with you the future of forestry for APEC economies. I wish to express my special gratitude to the State Forestry Administration of China for inviting FAO to this historical gathering. I also wish to convey my gratitude to co-hosts Mexico and Papua New Guinea, as well as APFNet and APEC Secretariat for their support. In discussing the special agenda of this session “New Challenges and New Opportunities for Forestry in APEC Economies”, the key word is change. Rapid change is requiring that we better anticipate and plan for the future, and that we adapt to change faster than ever before.
Change brings with it immense challenges for forestry – considering the long time frames required for growing forests – but, change also creates many exciting opportunities.
It is this framework of challenges and opportunities that my talk centers on today.
Today, I want to talk about five key issues at the core of the challenges that confront APEC’s forestry leadership:
- The need for rebuilding of the forest resource base.
- Challenges relating to carbon and climate change.
- The need to encourage and enable investment in forestry.
- The question of who should own the forests and who should manage them?
- And finally, leadership, policy and governance – including the critical importance of political will in meeting the challenges that confront us.
To start – let’s take a quick look at some statistics that broadly describe where the APEC economies sit compared with the rest of the world. APEC economies encompass a land area of 5.9 billion hectares, approximately 45 percent of the global total. The APEC population is 2.7 billion people or 40 percent of the global population.
The APEC economies have forest cover of about 2.2 billion hectares; more than half the global total. Forests cover 36 percent of land area in APEC economies; significantly higher than forest cover in the rest of the world. Forests in APEC economies are mainly classified as “Other naturally regenerating” forests – comprising 59 percent. Primary forests – those with little noticeable human impact – comprise 33 percent (one-third) of all APEC forests. Planted forests comprise 8 percent of forests. The majority of forests in APEC economies are temperate or boreal. Less than 20 percent of APEC forests are tropical forests.
During the past 20 years, forest cover in APEC economies increased by 22 million hectares, while the rest of the world lost 157 million hectares of forests. Almost half the APEC economies have increased their forest areas, while a similar number have suffered declining forest areas. The highest rates of increase have been in Viet Nam, China and the Philippines, while the highest rates of loss have been in Malaysia, Indonesia and Papua New Guinea. It’s important to note, however, that some APEC economies, such as Indonesia, that had been losing forests at a very high rate in the past have significantly reduced deforestation rates in recent years.
Despite the wealth in forest resources in several APEC economies, there remains a critical need to rebuild the forest resource base. In some economies, the extent and implications of forest loss are obvious. Some previously timber-rich economies have seen forest cover and wood supplies severely reduced where the forestry sector has become a sunset industry. In many others, forests have become severely degraded as a result of poor management. This has altered forest ecosystems, led to biodiversity loss, and has left the forests more vulnerable to factors such as forest fires, invasive species, and storm damage.
In many places, forest ecosystem services have been seriously affected. We have inadequate supplies of clean water. We have serious soil erosion, leaching and sedimentation problems. We have many endangered species and high rates of species extinction. Carbon emissions from forest lands have increased and carbon sequestration potential has declined. In simple terms, we have not done as well as we should have in managing our forests, and we now need to repair our mistakes.
During the past decade, climate change has been the vehicle that has returned forestry to the center-stage of international dialogue. And without doubt, in the coming decade, where climate change goes, forestry will follow.
Climate change offers immense potential opportunities for forestry. Carbon markets are evolving in many APEC economies and we are right to be cautiously seeking opportunities to integrate forestry into these endeavours. In New Zealand, for instance, forestry is already part of the New Zealand Emission Trading Scheme. For developing economies, REDD+ potentially offers significant funding for reducing emissions from deforestation and forest degradation, implementing sustainable forest management and conserving and enhancing carbon stocks. For example, the recent Indonesia-Norway REDD+ partnership has earmarked up to a billion dollars to support reduction of greenhouse gas emissions from forests and peatlands.
However, with these opportunities also come challenges. Frequently we hear talk of carbon money being a “windfall” for forestry. But we must remember that people certainly want something in return for their money. That “something” is – in broad terms – forest conservation and sustainable forest management. And sustainable forest management is something that foresters have found extremely difficult to achieve in the past. We have to be sure that any additional funds coming to forestry through REDD+ mechanisms are put to good use and produce tangible results.
Carbon provides potential new avenues of forestry financing. But, more generally, attracting investment remains a major challenge for forestry. More investment is needed to make progress towards sustainable forest management. More money is required to effectively manage conservation areas. Investment is required in planted forest establishment. In some economies, promoting domestic value-adding will require new investment in wood processing facilities. Generally, we need more investment in research, education and capacity building.
In economies where forests are mainly publicly owned and managed, government investment is likely to be the key driver of improved performance. In this case, increased financing will largely depend on political will and stronger advocacy to build the case for higher budget allocations for forestry.
In economies where non-government ownership is significant, private investment in forestry will be an important component in increasing forest cover and improving forest management. Many APEC economies have used incentives to encourage forestry investments. Examples include providing seedlings for planting, land grants, subsidies, low interest loans, and tax breaks.
Generally, however, providing an enabling environment for private sector investment has proven to have far greater impact on forest investments than direct incentives. An enabling environment for investment includes such things as clear and secure tenure and property rights, consistent policies, strong governance, tackling corruption, reducing bureaucracy, developing infrastructure, and building an economy that reduces risk and encourages people to do business.
It was my late-FAO colleague Jack Westoby who famously pointed out that, “Forestry is not about trees, it is about people. And it is about trees only insofar as trees can serve the needs of people”.
We have often been slow to recognize and react to this truth. In many cases the problems we have created have been because we haven’t asked “who?” Who should own the forests? Who should manage the forests? Among the APEC economies, the answers have varied. But there is now a clear trend towards devolution of forest management to the private sector, communities and individuals. There is increasing recognition that giving people a stake and a say in how forests are managed results in better outcomes. In economies such as China, Philippines and Viet Nam, forest management rights and responsibilities are increasingly being devolved to communities and households. In Australia, Chile and New Zealand, governments have privatized commercial forests.
There is a wealth of experience in APEC of different ownership and management models and we can learn from all of them. But, if we are to have better forest stewardship and more efficient production of forest goods and services, governments must consider letting go of direct forest management responsibilities. Forest management will increasingly be in the hands of households, communities and the private sector – those able to react faster to change. Government roles will increasingly be to monitor, regulate, and facilitate.
Government roles in forestry will also include setting policy, ensuring quality of governance and providing leadership and direction.
Policies and legislation should empower people to be involved in decision-making and to do business. Policies should help to resolve conflicts and establish trade-offs among competing objectives. Policies should provide a stable, enabling environment that rewards ‘good’ behaviors and penalizes ‘bad’ practices. Key policy issues will continue to include forest rehabilitation, provision of ecosystem services, and progress towards sustainable forest management.
There is a need to strengthen governance in several APEC economies; both in general and within the forestry sector. Significant international attention is now being given to Forest Law Enforcement and Governance, or FLEG. Some significant progress is being made. Until recently, we couldn’t even talk about corruption in international dialogues. Now we recognize it is a widespread problem and it is increasingly being confronted in most economies.
Better governance will be a necessary condition to continuing to export to high-paying markets – especially the United States and the European Union. Governance standards will also be of great importance in attracting carbon financing. Economies with poor governance will be severely disadvantaged in competing for carbon funds, with money moving away from more risky investments.
Finally, a key role for APEC governments is to continue to provide leadership – not only to their own forestry sectors, but globally. Greater resources, access to expertise and higher levels of economic development mean that most new developments in forestry are pioneered by economies in either the APEC or European blocs. For global forestry to continue to move forward and meet emerging challenges it is critical that APEC economies continue to invest in new developments. And that they provide leadership, guidance and assistance to less-developed economies.
In 2007, APEC leaders set an aspirational goal to increase forest cover in the APEC economies by at least 20 million hectares by 2020. We are making solid progress towards the goal, but at the rate of gain between 2005 and 2010, we will fall short. It remains a clearly achievable goal, but meeting it will require:
- Accelerating afforestation and reforestation efforts;
- Reducing agricultural encroachment into forest lands, and addressing unsustainable logging and other drivers of deforestation;
- Improving forest governance and controlling illegal timber trade; and
- Improving fire management, and reducing invasive species incursions and other ecosystem health issues.
With the commitment evidenced by this unique meeting of the forestry leadership of APEC, I am very confident that we will meet this challenge and I wish the Ministers every success in their deliberations.
Finally, I wish to assure you of FAO’s continuing support and partnership with APEC economies to meet our new challenges, and tap new opportunities towards attaining our common goals in forestry sector.