Angeli Mehta reports on how more money on the table for countries that show results in curbing tree loss could have a catalysing effect
Good news was in short supply at September’s United Nations General Assembly, as its Secretary-General Antonio Guterres excoriated leaders for a failure to tackle multiple crises, including climate and biodiversity loss, thanks to a swathe of geopolitical tensions.
Colombia’s newly elected president Gustavo Petro was no less critical: endless consumption and the war on drugs are destroying the Amazon rainforest, he said. He called for finance to protect the Amazon and for debt forgiveness to allow his country to use its own resources to tackle forest loss. The Colombian government has promised to go after “land grabbers” who turn forest into cattle ranches, after illegal logging made 2021 one of the worst years for deforestation.
One bright spot on this darkening horizon is a deal reached in September that will see Norway pay Indonesia for cutting carbon dioxide emissions by reducing deforestation and preserving carbon-rich peatlands. Indonesia, home to the planet’s third-largest expanse of tropical rainforest, with one of the richest levels of biodiversity, has cut deforestation rates every year for the past six.
Norway will now pay for a portion of the resulting verified emissions reductions for the three years to 2020 under a previously agreed REDD+ mechanism.
It was hard to imagine, back in 2016, that the scale of reductions would have been achieved
Last year Indonesia pulled out of that agreement, which specified a range of actions the country should take to cut deforestation, saying it hadn’t been paid.
The new partnership focuses on outcomes rather than mechanisms and will support Indonesia’s aim to create a carbon sink in its land and forest sector by 2030, absorbing 140 million tonnes more carbon dioxide than it emits.
Payments for the years from 2020 will be determined by a new, mutually agreed measurement, reporting and verification protocol, and all the money will go into Indonesia’s Environment Fund. A new methodology for reporting and verification is expected to lead to financing from other public or private institutions, which will help pay for the reduction in emissions.
“It was hard to imagine, back in 2016, that the scale of reductions would have been achieved. It's actually quite remarkable,” says Daniel Zarin, executive director of forests for international conservation NGO, the Wildlife Conservation Society. The Indonesian government reported a 90% reduction in deforestation between 2015 and 2020, although there is debate about definitions, with Global Forest Watch assessing a far smaller reduction in the loss of primary forest.
But the agreement isn’t just important for its own sake, suggests Zarin. “They're getting recognition and finance for delivering results, but it’s also built trust and confidence into this space.” Previously, he says, tropical forest countries have complained of overly bureaucratic mechanisms that don’t reward them adequately for their efforts, whilst donor countries refuse to put up more cash until they see results.
“We seem to be breaking through that chicken and egg problem.” More money on the table to support payment for the delivery of results “should have a catalysing effect” on efforts to end deforestation.
Without action some of the world’s most valuable food and agriculture companies could lose up to 26% of their value by 2030
Investors and banks were urged to step up their own contribution to those efforts by eliminating commodity-driven deforestation from their portfolios in a report from the U.N. Climate Change High-Level Champions. It says nature and land use is a “major blind spot” for investors, despite forest, land and agriculture industries contributing 22% of global emissions. Without action the report predicts that some of the world’s most valuable food and agriculture companies could lose up to 26% of their value by 2030.
On the sidelines of the U.N. assembly, Germany pledged to more than double its financial support for international biodiversity funds to 1.5 billion euros ($1.4 billion) a year; while the governments of Ecuador, Gabon, the Maldives and UK set out a political vision to scale up funding. No figures are included, but the plan commits the (so far 16) signatories to work together and with others to close the biodiversity funding gap.
Guillermo Lasso, president of Ecuador, said the shared vision “defines what we expect from governments, financial institutions, the private sector, philanthropists and civil society, to face the challenge of increasing and mobilising resources for biodiversity.”
It calls on developed countries to increase international finance, and the multilateral and bilateral funding agencies – particularly the Global Environment Facility (GEF) – to “develop innovative and inclusive solutions to accelerate, simplify and streamline access to financial resources for developing countries as soon as possible”.
These renewed commitments send clear signals to other world leaders about priorities, but in the words of Marco Lambertini, director general of WWF International “the time is over for just bold statements. These pledges must be fulfilled (and) change must be delivered”.
Such new and increased resources are urgently needed to underpin the goals of reversing biodiversity loss and protecting 30% of land and oceans by 2030, which many countries are pledging to support at the long-delayed biodiversity summit (COP15) due to take place in December in Canada. But whether holdouts, including Brazil and Argentina, will agree remains to be seen.
Main picture credit: Willy Kurniawan/Reuters
This article is part of the October 2022 edition of The Sustainable Business Review. See also:
ESG Watch: Banks’ net-zero pledges in the spotlight at Climate Week New York
Brand Watch: Can blockchain help indigenous people turn the tide on deforestation
Society Watch: Energy crisis puts wind in the sails of community renewables push
PepsiCo’s biggest challenge: winning over millions of farmers to regenerative practices
Comment: Five ways the world can break the deadlock on funding climate damageUN General Assembly Amazon deforestation Indonesia REDD+ Global Forest Watch biodiversity