FOREST PATHWAYS

REPORT 2023
DEEP DIVES
Lead Authors
Dr Mary Gagen, WWF-UK and Swansea University. Nigel Dudley,

CONTENTS
Equilibrium Research. Dr Steve Jennings, Alauda Consulting Ltd.
Hannah L. Timmins, Equilibrium Research. William Baldwin-
Cantello, WWF-UK. Laura D’Arcy, WWF-UK. John Dodsworth,
WWF-UK. Damian Fleming, WWF International. Hermine
Kleymann, WWF International. Pablo Pacheco, WWF-US.
Fran Price, WWF International.

Contributing Authors
Claudia Amicone, Fundacion Vida Silvestre Argentina. Irfan

DEEP DIVES
Bakhtiar, WWF-Indonesia. Osvaldo Barassi Gajardo, WWF-Brazil.
Charlotte Benham, ZSL. Dr Ananta Ram Bhandari, WWF-Nepal.
Ivaneide Bandeira Cardozo, Kanindé Ethno-Environmental
Defense Association. Gijs Breukink, WWF-Netherlands. Colman
O Criodain, WWF International. Tim Cronin, WWF-Australia. Guardians of the land: Indigenous Peoples
Cleo Cunningham, BirdLife International. Michael Davis, WWF-
Australia. Damary Elage, Kanindé Ethno-Environmental Defense and forest governance 4
Association. Karen Ellis, WWF-UK. Cristina Eghenter, WWF
International. Mariana Ferreira, WWF-Brazil. Rory Francis, WWF- Indigenous Peoples and forest management 8
Cymru. Shaun Hurrell, WWF-Sweden. Zhonghao Jin, WWF-China.
Jean-Paul Obame Engone, WWF-Gabon. Israel Correa do Vale
Junior, Kanindé Ethno-Environmental Defense Association. Lucía Repurposing harmful agricultural subsidies
Lazzari, Fundacion Vida Silvestre Argentina. John Lotspeich, to curb forest loss 10
Trillion Trees. Liliana Lozano, WWF International. Tracey Lue,
WWF-Canada. Robin McGhee, WWF- UK. Louise McRae, ZSL.
Carmen Monges WWF-Paraguay. Taruhim M.C. Quadros, WWF- Cross-region efforts to promote a responsible
Brazil. Tim Rayden, WCS. Veronica Robledo, WWF-UK. Oscar timber supply chain in Gabon 14
Rodas, WWF-Paraguay. Lucia Ruiz, WWF-US. Felipe Spina Avino,
WWF-Brazil. Meg Symington, WWF-US. Victória Varela, WWF-
Brazil. Daniel Venturi, WWF-Brazil. Bitate Uru Eu Wau Wau, Voluntary carbon finance mechanisms can provide
Kanindé Ethno-Environmental Defense Association.
needed finance for forest protection and restoration 20
Advice and Review
Mike Barrett, WWF-UK. James Brampton, WWF-Greater Mekong.
Do we need a new Global Nature Bank? 24
Nicola Brennan, WWF-UK. Luca Chinotti, WWF International.
Jane Crabb, WWF-UK. Zhou Fei, WWF-China. Akiva Fishman How selective logging can lead to forest loss,
WWF-US. Huma Khan, WWF International. Margaret Kinnaird,
WWF International. Tomasz Pezold Knezevic WWF-CEE. Yeqing
and what’s being done about it 28
Li, WWF-China. Karen Luz, WWF International. Paul de Ornallas,
WWF-UK. Per Larsson, WWF-Sweden. Neha Sinha, WWF-India. The dark side of the timber trade 32
Jean Timmers, WWF-Brazil. Analiz Vergara Herdoiza, WWF-US.
Rachel Wilson, WWF-UK. Brittany Williams, WWF-US. Mark
Wright, WWF-UK. Lucy Young, WWF-UK. Yu Xin, WWF-China. Seeing more than wood in the trees:increasing the
value of responsible forestry through ecosystem services 36
Editing and Design
Jonathan Gledson (www.millerdesign.co.uk): Infographics.
Lessons from Colombia’s forests 40
Evan Jeffries (swim2birds.co.uk): Copy editing and proofreading.
Matt Wood (madenoise.com): Design.

CONCLUSIONS AND RECOMMENDATIONS 46

Sam Pollard, WWF-UK: Forest Stripes. In collaboration
with the University of Reading, and University of Derby.
showyourstripes.info

ANNEX 1: METHODS 50
With grateful thanks to:
Richard Betts. Jon Drori. David Edwards. Ed Hawkins.
Miles Richardson. The Forest Declaration Assessment Partners.

How to cite this report: WWF (2023) The Forest Pathways Report.
Gagen, M.H., Dudley, N., Jennings, S., Timmins, H.L. Baldwin-
REFERENCES 54
Cantello, W., D’Arcy, L., Dodsworth, J.E., Fleming, D., Kleymann, H.,
Pacheco, P., Price, F., (Lead Authors). WWF, Gland, Switzerland.

Facts correct as of October 18th 2023 and for Forest

Declaration Assessment 2023 draft of that date.

Cover photography: Aerial shot of the Amazon,

Loreto region, Peru.
© Brent Stirton / Getty Images
The Forest Stripes, livingplanetindex.org/fsi. Population
abundance of species that rely on forests, 79% average
decline 1970 to 2018. The Forest Specialists Index
measures the change in average population abundance
of monitored species which strongly depend on forest
habitats. The image shows the change in the index
between 1970 and 2018, which gives an average decline
in relative abundance of 79%, from 1,428 forest specialist
populations monitored in 346 species. The Forest Stripes
are a collaboration between WWF, the University of
Reading, University of Derby and ZSL, the Zoological
Society of London, part of the wider Climate Stripes family
(biodiversitystripes.info / showyourstripes.info)
© Greg Armfield / WWF-UK

3
 DEEP DIVE WHY ARE INDIGENOUS PEOPLES CRITICAL ACTORS IN EFFECTIVE

Guardians of the land: Indigenous

AND EQUITABLE FOREST GOVERNANCE?
Research drawing on data from 64 countries comprising 82% of global land area shows that

Peoples and forest governance

IPs and local communities own or govern, either through legal or customarily-held tenure,
approximately 18% of the total; but only 10% has been formally recognized.2 Their lands are in
good ecological condition,3 and intersect 40% of all terrestrial protected areas and ecologically
intact landscapes.4 IPs hold an intimate connection to their lands and waters and accumulated
knowledge on the conservation of their territories. Traditional Indigenous territories coincide
with areas that encompass 80% of the world’s biodiversity,5 providing global environmental
LILIANA LOZANO FLORES, WWF INTERNATIONAL,
CRISTINA EGHENTER, WWF INTERNATIONAL,
“Only by recognizing the rights, knowledge, innovations, and values functions and services.6 Furthermore, IPs have contributed to mitigation strategies related to
TRACEY LUE, WWF-CANADA of Indigenous Peoples and local communities will we be able to push resource management and forest monitoring;7 their lands contain at least a quarter of carbon
stored above ground in global tropical forests.8 They have also been proven to hold knowledge
forward the global agenda to sustainably use and conserve biodiversity.” and capacity that often gives them a greater ability to respond and adapt to environmental
threats more swiftly than centralized state responses. Finally, in addition to ecological and
LAKPA NURI SHERPA, INDIGENOUS REPRESENTATIVE FROM NEPAL. DECEMBER 2022. COP15.
cultural contributions, studies in the Amazon biome have shown that Indigenous forest

INTRODUCTION
management strategies have made proven contributions to the local and national economy in
terms of carbon sequestration, pollution reduction and sustainable use of resources.9
Indigenous Peoples (IPs) and local communities are vital custodians of the world’s IPs have developed a diversity of management practices that have allowed them to keep the flow of
remaining natural landscapes, with at least 15.5% (5.11 million km2) of the total forest forest resources and ecological services together with ensuring the provision of their livelihoods.10
area formally and traditionally governed by them (data from 52 countries representing These management practices rely on traditional ecological knowledge that can include temporal
90% of the global forest area).1 Globally, there is growing recognition of the important restriction or total protection of certain species, protection of specific habitats due to cultural or
roles and contributions of IPs as custodians of biodiversity as well as partners in the ecological value, resource rotation, monitoring of forest resources and habitat, and watershed
conservation, restoration and sustainable use agenda. Appropriate recognition of, and management.11 Furthermore, management practices are supported by self-governance systems
support for, the rights of IPs over land and resources, and engaging them as partners which enable Indigenous groups for self-organization, institutional learning and innovation that
and rights-holders rather than beneficiaries, is critical for reaching globally ambitious allow them to adapt and overcome the multiple socio-environmental challenges they face.
forest goals. We must further invest in advocating for recognition of the collective rights
of IPs, supporting self-governance systems, enhancing the revival and intergenerational
transmission of traditional and local ecological knowledge, and fostering appropriate
DRIVERS AND CHALLENGES THREATENING INDIGENOUS TERRITORIES
social and cultural management practices based on traditional knowledge systems. Multiple land-use drivers threaten Indigenous territories including mining, land conversion for
agriculture and livestock rearing, infrastructure development, and illegal logging. A recent study
shows that over a quarter of IPs lands could face pressure in the future if commodity-driven
development increases; this could be exacerbated if it is combined with a lack of formalized
rights and poorly applied Free, Prior and Informed Consent (FPIC) processes.12 Tenure
insecurity further undermines the sustainability and future of their territories and forests, while
persistent structural and cultural challenges – linked to the primacy of colonial values over
Indigenous vision and the perception of IPs as a homogeneous group – hamper the full inclusion
of IPs in forest governance.

Multiple institutional responses to the diverse and interrelated threats and challenges have
been developed, both by IPs and state institutions. These have included old and new models
linked to state-led conservation (e.g. creation and expansion of protected areas); community-
based conservation such as the integrated conservation and development projects (ICDP); co-
management schemes; and, recently, market-based mechanisms such as payment for ecosystem
services.13 However, these tools have not always been fully successful, and in some cases they
have brought major problems. For instance, the setting of protected area systems such as
the ARPA system in Brazil has shown success in conservation outcomes14. Simultaneously,
in some cases, the establishment of protected areas has also been linked to processes of land
dispossession and less access to forest resources increasing the risk of livelihood provision to
local communities15.

More recent developments have included rights-based approaches such as the recognition of
rights to ancestral lands and territories, governance systems, and sustainable economies.16 Such
approaches recognize that IPs play an outsized role in conservation through their worldviews,
cultures and ways of life,17 despite often receiving little to no formal recognition or support. The
© Marizilda Cruppe / WWF-UK
full inclusion and recognition of IPs not only makes conservation more equitable, but makes it
more successful in terms of effective biodiversity and conservation outcomes.18

4 FOREST PATHWAYS REPORT 2023 5

 RECOMMENDATIONS AND WAYS FORWARD
International policy and corporate funding supporting Indigenous initiatives has not
been enough to halt deforestation and conversion within Indigenous territories. We also
highlight that policies considering the whole range of ecosystems critical for culture,
livelihood and territorial claims is a key recurrent ask from Indigenous Peoples and
local communities19.

We ask for strengthening of the governance rights of IPs to protect their lands as well as
critical policy developments that include:

For the governments

•R
 ecognizing IPs as rights-holders, and as leaders and partners in addressing climate
crisis and biodiversity loss. This implies recognizing their territories, rights and self-
organization, as well as their leadership role, distancing from only considering them as
collaborative stakeholders or participants, especially when it refers to decision-making
process over their territories.

• Ensuring that financial and technical resources are directly accessible to

Indigenous groups to support their stewardship of forest and natural ecosystem
lands, which requires:

• Recognizing IPs as rights-holders and partners for effective collaboration.

• Using human rights-based approaches (HBRA) at all times (self-determination,

participation, access, get benefits, socio-cultural diversity).

• Consultation, participation, FPIC, inclusivity, transparency, culturally-tailored,

and coherent donor support.

• Taking into account the heterogeneous groups and contexts.

• Transformational and holistic support, moving from only a “technical” view.

For conservation NGOs

•R
 especting Indigenous rights and supporting Indigenous communities in leading
forest and ecosystem stewardship.

• Policy advocacy at national and subnational scale to influence national laws

and policies on the recognition of Indigenous and traditional territories, their
management practices and self-governance systems. This implies providing adequate
space for a dialogue in which Indigenous values, perspectives and priorities are
listened and attended to.

•S
 upport the strengthening of self-governance systems to empower Indigenous
institutions. This entails strengthening the community actors and the social
mechanisms that allow the functioning and sustainability of the Indigenous
institutions. For instance, getting recognition as an Indigenous community; accessing
rights to land and resources; putting in place mechanisms for preserving and
ensuring the intergenerational transmission of the rich cultural diversity; running
a comprehensive conservation approach that combines Indigenous and western
knowledge systems; and strengthening youth and women’s role in conservation.

•S
 trengthening governance for resource management to empower Indigenous forest
stewardship. This entails running locally-led resource management practices in
harmony with Indigenous traditional systems and specific ecosystems. For instance,
implementing community-based subsistence strategies that rely on local production;
enhancing Indigenous entrepreneurship; developing community-based monitoring
strategies that combine both technological and traditional knowledge. © Marizilda Cruppe / WWF-UK

6 FOREST PATHWAYS REPORT 2023 7

 DEEP DIVE Pathways to fairer recognition of rights and roles. The CBD’s Global

Indigenous Peoples
Biodiversity Framework gives more explicit attention to IPs’ rights and roles than
previous agreements such as the Aichi targets, including the unresolved issue of
how to ensure that Indigenous territories count towards the 30x30 target, whether
incorporated within the existing PA and OECM frameworks or through some

and forest management

alternative means.37 The GBF final statement wording was ambiguous, and it is
important that this ambiguity does not pass into implementation. Given the evidence
that Indigenous territories are critical to sustainable forest management and protection
they must be included in the GBF’s 30X30 target. Inclusion of Indigenous territories
more widely in area-based conservation has many implications, including greater
IPs inhabit – either under legal agreements or through less formal and often insecure expectations for monitoring and adaptive management, and the need to react to
traditional governance arrangements20 – many of the world’s remaining areas of high changing climatic conditions.38 At the same time, many Indigenous territories remain
biodiversity, particularly tropical and boreal forests. Research drawing on publicly under pressure39and the need for adequate rights-based protection from threats is
available geospatial resources found that IPs manage or have tenure rights over at least growing all the time.
~38 million km2 21in 87 countries or politically distinct areas on all inhabited continents.
The new opportunities presented by the GBF also carry some risks. Under
This is over a quarter of the world’s land surface and intersects with about 40% of all
implementation it is vital that governments do not simply hand over target-based
terrestrial protected areas and ecologically intact landscapes (for example, boreal and
responsibility for management of large land areas to IPs without adequate support,
tropical primary forests, savannas and marshes).22 Research also suggests that at least
which would risk IPs being unable to defend their territories against outside pressures.
a third of so-called Intact Forest Landscapes exist on Indigenous territories, probably
IP partnerships should be fostered with government departments, NGOs and,
more.23 IPs therefore play a critical role in global biodiversity conservation strategies
where appropriate, with traders and businesses who are committed to rights-based
and in the future of these landscapes.
and conversion and degradation-free commodities practices and sustainable forest
Biodiversity in Indigenous territories. There is good evidence from multiple management. Expanding funding and ensuring it reaches the people on the ground
sources that management of traditional territories by IPs is at least as effective – is an important priority.
sometimes more effective – in retaining natural vegetation cover than alternatives,
including many state-run protected areas.24,25,26 This success, however, has been linked
to secure land tenure in forest and ecosystem areas, a clear enabling condition.27
Across the tropics Indigenous territories have a fifth less deforestation, conversion
and degradation.28 There is good information on the role of sacred natural sites in
conserving aspects of biodiversity,29 and some slightly more anecdotal or partial
evidence of successful conservation from ICCAs and other forms of community
management.30,31,32 The site- and context-specific factors that enable the link between
Indigenous territories and better outcomes for both IPs and their territories and for
broader forest goals are poorly understood in detail and an area in which greater
evidence is needed to inform policy.

IPs’ representatives have been active in international conservation institutions,

particularly the CBD, and have also increasingly been recognized for their conservation
efforts on the ground. For example, in Canada, First Nations groups are protecting
the Great Bear Rainforest,33 containing a quarter of the world’s remaining coastal
temperate rainforests, an estimated 20% of the world’s remaining wild salmon34 and
territories of 27 coastal First Nations.35 Key success factors were use of ecosystem-based
management (EBM) promoting human well-being and ecology, a strengthening of First
Nations rights, land-use planning, development of enabling legislation and engaging key
stakeholders and First Nations. The project brought consensus to protect 8.5 million
hectares of coastal BC temperate rainforest,36 supported local economic development
and ended decades of conflict.

© Luis Barreto / WWF-UK

8 FOREST PATHWAYS REPORT 2023 9

 DEEP DIVE

Repurposing harmful agricultural

subsidies to curb forest loss
HERMINE KLEYMANN,
WWF INTERNATIONAL
THE GLOBAL AGENDA ON REPURPOSING SUBSIDIES
Repurposing environmentally harmful subsidies is high up on the global agenda.
Global alliances, including non-state actors and business coalitions, are calling for
reform and repurposing of subsidies to achieve more sustainable food systems while
embracing a just rural transition, and a nature-positive and net-zero economy.40 Given
that about a quarter of global emissions are associated with food production, and half
of this is linked to land-use change,41 repurposing subsidies may have a significant
impact on climate mitigation. Moreover, target 18 of the new Kunming-Montreal Global
Biodiversity Framework (K-M GBF), adopted in 2022 by 196 member governments,
calls upon governments to identify (by 2025) and eliminate, phase out or reform
harmful subsidies by 2030 in a “just, effective, and equitable manner”. In addition, the
G7 in 2022 committed to “redirect or eliminate incentives including subsidies harmful
to biodiversity by 2030 at the latest”.

An estimated US$378 billion to US$1 Trillion (42,43 and section 1.3 of this report)
of potentially environmentally harmful subsidies are spent in the agricultural
sector each year, including crop commodities responsible for driving forest loss and
conversion of other natural ecosystems. This also has impacts on greenhouse gas
emissions, carbon sequestration and biodiversity loss. At the same time, it is estimated
that US$460 billion per year are needed to halt and reverse forest loss by 2030.
Currently, domestic and international mitigation finance for forests averages
US$2.3 billion per year – less than 1% of the total needed.44

Consequently, repurposing harmful subsidies is needed not only to promote

deforestation- and conversion-free agriculture and agri-food production, but also to
support the uptake of practices that support restoration of degraded lands, including
through agroforestry or regenerative agriculture,45 as well as forest and biodiversity
conservation. The value of forests to improve and support agriculture, help build
resilience to climate change46 and contribute to food security47 and production is
evident, but is so far hardly reflected in agricultural (support-) policymaking.

AGRICULTURAL SUBSIDIES AND DEFORESTATION

Agriculture drives more than 90% of tropical deforestation.48 A portion of commercial
agricultural expansion is driven by subsidies, in a range of different ways. However, the
transmission mechanisms through which subsidies lead to deforestation are complex
and difficult to quantify.49 A number of efforts have been made to understand these
links. For example, a recent study from the World Bank50 examines the causal link
between agricultural price support and deforestation, and estimates that it would be
responsible for about 2.2 million hectares of forest loss per year, or 14% of annual
deforestation. In addition, the report suggests that subsidies in consuming countries
also contribute to tropical deforestation in producing countries (e.g. increasing
subsidies to livestock in the USA would have some impact on soy expansion in Brazil,
and subsequently on deforestation).

© Andre Dib / WWF-Brazil

10 FOREST PATHWAYS REPORT 2023 11

 REPURPOSING WHY AND HOW? AN AGENDA FOR ACTION
Many conventional agricultural support and incentive programmes do not achieve There has not been a better time to drive this agenda forward, with international
their intended purpose and lead to undesirable environmental outcomes.51 Removing attention on the transformation of food systems67 and the urgency of repurposing
subsidies may reduce those outcomes, but more is needed to support the transition environmentally harmful food subsidies (see Deep Dive on Subsidies). At the same
to more sustainable food systems, including behavioral and technological shifts.52 time a new EU regulation on deforestation-free products (EUDR)68 has been adopted,
In this regard, a subsidy reform is not only about removing harmful subsidies but preventing the import of agricultural commodities that are associated with deforestation
repurposing these resources to ensure effectiveness and long-term sustainability, into the EU. Furthermore, in the Glasgow Leaders Declaration on Forests and Land
including consideration of social fairness and inclusion. Sustainable development, Use69145 government leaders representing 90% of global forests have committed to
poverty eradication and food security must take center stage as most of the agricultural work together to halt and reverse forest loss and land degradation by 2030, including to
support policies’ intention is to increase food security and reduce rural poverty.53 “redesign agricultural policies and programmes to incentivize sustainable agriculture,
Therefore, the successful repurposing of subsidies is highly dependent on political promote food security, and benefit the environment”.
will and public perception.
While this looks like an obvious opportunity to reconcile forests and agriculture,
Social, economic and environmental dimensions need to be considered existing institutional and political silos have to be overcome through strong political
in designing the repurposed subsidy; guidance exists and can be built on, as is will and collective action. What is needed now is a strong action-oriented global agenda
discussed below. driven by ambitious public and private sector champions.

From a social dimension, the subsidy reform needs to be just, fair and equitable.54 At international level, such an agenda could pursue the following actions:
The Just Rural Transition initiative55 has developed a set of 10 principles aimed at
providing guidance and a framework to shift towards just rural food systems, including  stablish a working group that cuts across and marries work and progress under
•E
what this means in terms of desired outcomes, planning and decision-making processes, the Glasgow Leaders’ Declaration70 and the United Nations Food System
systemic changes needed, and tensions that must be managed.56 Summit71 with the aim to more explicitly link agricultural subsidies and forest-related
goals.
From an economic perspective, the private financial and social economic costs and
benefits of reforming subsidies and repurposing options need to be fully considered. • Create an intersectoral working group (with members from FAO’s COFO and COAG)
A subsidy reform will entail short- and long-term gains, trade-offs, and winners and on subsidies, best-practice examples and incentives for agriculture and forests,
losers that have to be fully acknowledged for specific private actors and for the society capitalizing on relevant findings of flagship reports from FAO and WB.
as a whole.57 Tools such as FAO’s Monitoring and Analyzing of Food and Agricultural
• Establish dialogues and roundtables on sustainable agri-food repurposing with
Policies (MAFAP)58 or BIOFIN’s new guideline59 can help identify, analyze and monitor
finance ministers of forest-rich countries and key consumer governments. This
harmful subsidies, their current and true costs (including externalities), redesign
could be facilitated through the Forest and Climate Leaders Partnership.
options, and socioeconomic and environmental trade-offs.
• Establish a task team on the role and promotion of forests and ecosystems in the
The environmental dimension of the reform contributes to reaching wider societal
agri-food agenda under the Just Rural Transition initiative72.
and development goals. Current and conventional agricultural subsidies, while
historically focused on improving food security and progressing on socioeconomic • Use the momentum of the recently adopted EU Deforestation Regulation
indicators,60 often lead to undesired outcomes61 and potentially have wider negative (EUDR)73 and tailor agricultural repurposing-support programmes to meet
impacts on the environment including driving forest loss.62 However, many positive the EU’s requirements.
examples and studies of public incentives programmes that promote a deforestation-
and conversion-free and forest-positive agriculture exist and can be drawn on.63,64 At national level, governments can start to identify and reform subsidies and scale
up policies and support for deforestation- and conversion-free and forest-supporting

CONCLUSION AND RECOMMENDATIONS agriculture, including through:

• Taking advantage of and engaging in existing support programmes, including

There is political momentum and opportunity to repurpose harmful agricultural
FAO’s MAFAP, BIOFIN’s new guidance on repurposing (see above) and the
subsidies to protect forests and other natural ecosystems, as well as to support
findings of key research in this space (WB, CIF, ODI, WRI).
restoration of degraded agricultural lands and natural ecosystems. Much of the
debate has focused on the agricultural sector and food systems, but has neglected • Updating and strengthening National Determined Contributions (NDCs) by
the contributions of forests and their wildlife in maintaining ecosystem services (soil including targets from the agricultural sector that affect forests.74
health, pollination, seed dispersal, water flow etc.) for the long-term sustainability of
agriculture, food systems, and rural people’s well-being. • Including a national target and/or policies in the National Biodiversity Strategy
and Action Plans (NBSAPs) on sustainable agriculture (target 10 K-M GBF)
When looking at the role of forests in food production, both the risks and opportunities aiming at addressing deforestation and conversion in agricultural production.
need to be taken into consideration. If designed correctly, repurposed agricultural
subsidies can incentivize a deforestation- and conversion-free agricultural production • Optimizing the benefits of forests for food production and security by taking
and at the same time promote forest-positive regenerative agriculture and agroforestry policy measures aimed at sustainable management of both forest products and
systems, that include sustainable tree-based food production and sustainable forest ecosystem services,75 as well as protecting, maintaining and restoring
intensification65 through the integration of trees and woodland into farming systems.66 critical forest corridors.76
Since repurposing options entail social, economic and environmental trade-offs and
winners and losers, strong political will and societal acceptance is needed (see Case
Study: Wonderful Welsh Woodlands).

12 FOREST PATHWAYS REPORT 2023 13

 DEEP DIVE CHANGING ATTITUDES

Cross-region efforts to promote Of the 15 million hectares under logging concessions in Gabon, Chinese timber
enterprises represent the largest group, with over half of Gabon’s production forest

a responsible timber supply chain

(estimates range from 50-70%) being under Chinese ownership.

A major change WWF has witnessed in Gabon has been a shift in approach by Chinese
forest enterprises towards pursuing FSC certification. Increasing the number of Chinese

in Gabon
companies reaching certification standards would provide a signal to the market, and a
blueprint for Chinese forest enterprises working in Gabon and the wider Congo Basin.
This would in turn lead to an uptick in sustainable forest management in the country,
and should also lead to positive impacts for biodiversity and the well-being of local
communities over the longer term.

JOHN DODSWORTH, WWF-UK, Sustainable forest management practices, such as reduced impact logging, have Although it is hard to pinpoint one specific cause of the shift, a combination of the
JEAN-PAUL OBAME ENGONE, WWF-GABON, achieved a great deal in avoiding degradation from logging. Reduced impact logging Chinese government’s roll-out of the amended Forest Law, coupled with the President
ZHONGHAO JIN, WWF-CHINA (RIL), as one example, has been found to reduce species loss in logged areas77, preserve of Gabon committing to mandatory certification, have both played their part. China’s
taxa78 and reduce impacts on the physical environment79 including protecting the amended Forest Law includes a ban on buying, transporting, and/or processing
soil during logging80, a crucial enabling condition of ensuring forest management illegally sourced timber, and requires processing companies to establish a data record
does not lead to severe degradation, and leaves forests with the soil, water quality, of raw materials and products (Article 65, see below). Meanwhile, in September 2018
and seedbanks needed to undergo natural regeneration, post logging. RIL has also the former President of Gabon, H.E. Ali Bongo Ondimba, declared that all operating
allowed management to reduce carbon emissions from logging81. Defining degradation forest concessions in Gabon would have to be FSC certified by 2022 (recently pushed
is complex, but, green forest economy pathways have the potential to be limiting to back to 2025). On 31 January 2020 a cooperation agreement was signed between the
high forest cover nations, without embedding the allowance of sustainable forest Ministry of Forests of Gabon and the Forest Stewardship Council (FSC). WWF helped
management as a means to avoid degradation in definitions, goals, commitments and to influence this by raising awareness and advocating to promote legality and FSC
targets, and ensuring the agency to develop economically. certification with the forestry administration, and supporting Chinese forest enterprises
to move towards FSC implementation.
We share here a case study in which Gabon has taken steps to develop a sustainable
bioeconomy, with the forest sector representing the largest private sector employer. The
implementation of a log export ban, commitment to move towards FSC certification by
2025, creating the enabling environment for processing facilities to operate sustainably,
provide examples of the steps Gabon is making.

INTRODUCTION
Gabon is one of the world’s most forested countries, with over 88% of its total surface
area (267,667 km2) covered by tropical rainforests. Its floral diversity is linked to the
Guinean-Congolese regional center of endemism,82 and the diversity of its lowland
plant species is among the richest in all of Africa.83 Gabon’s forests are also rich in
wildlife, with a highly diverse megafauna, including about 60% of the world’s remaining
critically endangered forest elephants.84 It also maintains a significant population of
western lowland gorillas, mandrill monkeys, forest buffalos, and noteworthy birdlife.

Of the 22 million hectares of forest in Gabon, about 15 million are under logging
concessions. The Forest Code makes the sustainable management of allocated forest
concessions mandatory, as well as the processing of wood, banning the export of whole
logs. In 2018, the Gabonese authorities announced that FSC certification would become
mandatory by 2025. At present, there remains a gap between commitments towards
the FSC certification and implementation and compliance with Forest Management
Certification requirements promoted by the government.

Chinese-owned companies have the biggest stake in Gabon’s forest concessions. This
case study first looks at the encouraging signs of a shift towards sustainable forest
management by Chinese (and other) companies in Gabon, before taking a broader view
of China’s potential for reducing the demand for illegal and unsustainable timber and
fostering sustainable forest management.

© N.C. Turner / WWF

14 FOREST PATHWAYS REPORT 2023 15

BRIDGING THE CERTIFICATION GAP By supporting Bonus Harvest as an industry role model,
FGMC has contributed to a wider shift in intentions across
For hardwood logs, China’s main suppliers in 2019 were
Papua New Guinea (21%), Solomon Islands (15%), the
or individual may purchase, process or transport timber that
he/she clearly knows was illegally felled or indiscriminately
In order to meet FSC standards, Chinese forestry companies Chinese timber companies. Many other Chinese companies EU (12%), Russia (11%) and the Democratic Republic of felled in forest regions”.
are in need of capacity building, particularly around have since enquired directly with Bonus Harvest about how to the Congo (5%). Customs data shows a surge in tropical
improve forest management practices, and WWF-Gabon now log imports in recent years from some smaller suppliers, This article provides a legal basis not only for China to
community relations, wildlife monitoring and traceability.
receives around four enquiries a week from Chinese timber including Sierra Leone, Suriname, Central African Republic address the challenge of the purchase, processing and
Relations with local communities and chiefs are challenging
companies who want to work towards more sustainable and Ecuador, indicating a decentralization trend in China’s transportation of illegal timber, but also for Chinese timber
with both a language barrier and misaligned expectations,
forest management. Among them, 23 have been undergoing import sources. African countries have replaced Asian trading and processing enterprises to implement their due
while in some cases enterprises enter the timber sector in
training on aspects of sustainable forest management and (mainly Mekong) countries as China’s main sources of diligence obligations concerning legally produced timber.
Gabon with no prior experience, having been established
previously in sectors such as infrastructure. certification, while five have been selected to benefit from rosewood imports. According to Global Witness, about two-
Article 65 provides the basis for China’s legislation regulating
further WWF support (subject to due diligence). thirds of the world’s tropical logs were exported to China in
and supervising the legality of timber sources. At present,
WWF-Gabon under the UK Foreign, Commonwealth & 2018, while most of the top 10 countries supplying China with
The trend has also attracted engagement from non-Chinese most Chinese timber-importing and processing enterprises
Development Office (FCDO) flagship Forest Governance tropical timber ranked very poorly against metrics for rule of
enterprises. For example, WWF-Gabon is currently carrying lack functioning due diligence systems, while their recording
Markets & Climate (FGMC) programme has supported the law and control of corruption, with illegal logging rampant.85
out due diligence with the largest company in the Gabon of raw material purchases and sales is uneven. In future,
establishment of “Chinese forestry company role models”,
businesses need to establish and control their material
which should act as benchmarks for other Chinese forestry
companies to move towards sustainable forest practices.
Special Economic Zone (GSEZ), which owns seven forest
concessions covering more than 1 million hectares – the CHINA’S ROLE IN SUPPORTING A SUSTAINABLE and product entry and exit accounts to comply with timber

To do that, WWF-Gabon engaged and enrolled two Chinese company referenced the Bonus Harvest example in its
request for support. Currently, GSEZ is in the process of
TROPICAL TIMBER TRADE legality requirements.

UNCERTAINTY AROUND THE LAW

forest companies as Forests Forward members (see Case
Study on Cross-Region Efforts to Promote a Responsible joining WWF Forest Forward, establishing an agreement and Due to its size and economic weight, China has an
Timber Supply Chain in Gabon). One of them, Bonus action plan to implement good forestry practices and achieve unparalleled impact on tropical forests globally – it is now the
FSC certification. world’s largest single country importer of tropical timber86. While Article 65 explicitly provides the legal grounds for
Harvest, employs nearly 200 workers in Gabon and has a
As a result, China has a unique economic and political preventing illegal timber from entering the supply chain, it is
forest concession covering 128,000 hectares. The other,
Another significant opportunity emerged to leverage influence on critical markets that represent an economic not clear whether this article includes imported timber and
Gabon Wood Industries (GWI), has concessions covering
progress in reducing illegal logging and promote sustainable lifeline for certain forest-rich countries – but equally, if left timber products – and, if so, how to determine the legality
over 400,00 hectares.
forest management, when the minister in charge of forests unchecked, deforestation and forest degradation threaten of such products. Several seminars have been organized to
When WWF-Gabon first started working with Bonus and the environment issued order 41/MEFMEPCPAT/ both the forests and development of these countries and the discuss this issue, with most participants suggesting that
Harvest, few expected the company would achieve FSC CAB-M on the creation, organization and operation of reputation of Chinese companies operating overseas. In other Article 65 should indeed encompass imported timber and
certification. Bonus Harvest started active engagement with the legality control and traceability system for Gabonese words, China’s actions through both its government and that tracking timber legality to its original producing country
WWF in March 2021 after participating in a number of timber. WWF helped to influence this step forward by private sector have the power to make or break the ambitions should be included in the upcoming regulations for the
WWF group workshops on sustainable forest management raising awareness and advocating to promote the timber of producer countries to crowd out illegal deforestation from implementation of the Forest Law.
and FSC standards. WWF-Gabon subsequently conducted legality assurance system with the forestry administration. their supply chains and support a transition to green carbon
WWF-Gabon facilitated socialization and the involvement of There are also questions around how Article 65 should be
an audit and provided recommendations on issues which economies in high-forest-cover nations.
stakeholders, co-organizing a workshop with representatives implemented and enforced in practice, particularly in relation
needed to be addressed in order to progress towards
from more than 60 forest companies, NGOs, Indigenous The loss of tropical forests is a global issue impacting to timber imports. One option would be to use the CTLVS
reaching certification standards.
Peoples and local communities. the rights of Indigenous Peoples, the livelihoods of standard, although this is only voluntary. Another option
WWF has requirements that need to be met in order to forest communities, and wildlife habitats. Recognition would be to enforce Article 65 using a national mandatory
onboard timber enterprises and offer further support. The FGMC programme has made considerable progress since of China’s responsibility for its overseas footprint is now standard. A third way could be to require Chinese importing
These include: its launch. However, although the results have been positive well established in Chinese policy thinking87 and debates, companies to ensure transparency in tracing their products
to date, ensuring a permanent market shift will require with China already having declared its commitment to back to the country of origin, where possible adhering to
• Securing appropriate staff to deal with forest management, more funds to support enterprises with capacity building standards such as the FSC’s and PEFC’s.
ecological civilization, the establishment of rules-based
environment, reduced impact logging, wildlife/biodiversity, and training in order to reach a critical mass of certified global environmental governance, and the value of ecological
and social aspects companies in Gabon. There are still divergent views on how to verify whether
redlines. Domestically, China has put in place extensive
imported wood is “clearly known to be illegally and
environmental protection legislation. The focus now turns
• Careful due diligence and compliance
CHINA’S GLOBAL DEMAND to China’s overseas footprint, which requires balancing the
indiscriminately harvested”. Our research team’s analysis
suggests that not all legally exported timber was drawn from
Further support from WWF-Gabon included technical advice
around certification processes, reduced impact logging, FOR TROPICAL TIMBER competing and contradictory forces of national growth,
development, and global environmental stewardship.
sources that were legally logged. Some timber may have come
from illegal sources but was nonetheless imported after legal
community engagement/social inclusion, participatory
China’s imports of logs and sawnwood timber have increased export documents were obtained through illegal means. In
mapping and FPIC, and wildlife monitoring. Bonus Harvest
and GWI have now achieved LegalSource certification. After
significantly since 1998. By 2014, the total volume of ARTICLE 65 OF CHINA’S FOREST LAW practice, importers should be under an obligation to perform
imported logs and sawnwood (equivalent to 87.8 million the necessary due diligence and manage the entire timber
becoming LegalSource certified, Bonus Harvest immediately China’s legislation for addressing illegal timber being
m3 of log volume) exceeded the volume of its domestic supply chain to ensure that the timber is legally sourced,
engaged in FSC certification, and is seen by many as the purchased, processed and transported into the country
commercial timber production (82.3 million m3). China’s rather than simply accepting the timber as legal because it
leading Chinese timber company in sustainability in Gabon. potentially has significant consequences for wood purchases
dependence on imports of logs and sawnwood reached 56% has not been smuggled.
Its operations have now improved in terms of securing at both a domestic as well as a global level.
in 2019. China imports timber products from more than 100
appropriate staff, addressing legal requirements, reducing
countries. The top five suppliers in 2019 were Russia, the EU,
impact, protecting wildlife and biodiversity, and addressing On 1 July 2020, Article 65 of China’s newly revised Forest
New Zealand, the United States and Australia – together they
social inclusion issues. Law came into force. It clearly stipulates the following:
accounted for 57% of China’s total imports by value.
“Timber processing enterprises should establish an account
of the entry and exit of raw materials and products. No unit

16 FOREST PATHWAYS REPORT 2023 17

CONCLUSIONS
This case study has illustrated that unsustainable and illegal
logging can be addressed at both ends of the supply chain:
with Chinese-owned companies operating in Gabon and by
China’s own policy commitments.

In Gabon, the FGMC project has inspired forest companies

to implement good forest practices and make progress toward
certification. This is a positive start, but significant resources
are still required to ensure a more profound market shift.

However, given the differing legislation across the Congo

Basin and the prominence of Chinese enterprises across the
timber sector, this work needs to go beyond the borders of
Gabon and into ROC, Cameroon and DRC. Ensuring a strong
legal and sustainable timber sector in the Congo Basin and
working with Chinese timber enterprises will be crucial
to secure the well-being of the forests and the people that
depend upon them, as well as crowding out the illegality
that risks preventing these countries from developing
economically, equitably and sustainably. The impact of
this, whether successful or unsuccessful, will be felt well
beyond the borders of the Congo Basin, and will require
international support and investment.

As the world’s largest importer of logs and sawn timber,

as well as being an important consumer market for timber
products, China can help timber-producing countries
improve their forest governance and reduce illegal logging.
Such actions would demonstrate that China is taking its
responsibilities in this arena very seriously, and align to
the ambitions it has set through multilateral forums such
as ASEAN and FOCAC for equitable South-South trade
and development.

© Martin Harvey / WWF

18 FOREST PATHWAYS REPORT 2023 19

 DEEP DIVE A NEW MODEL OF NATURE AND PEOPLE-POSITIVE CARBON FINANCE

Voluntary carbon finance mechanisms A first fundamental shift is for all companies to be both decarbonizing as rapidly as
possible (Scope 1, 2 and 3 emissions) and investing in protecting and restoring nature.94

can provide needed finance for forest

It is not either/or. Safeguarding forest and other ecosystems requires on one hand
urgent and total phase-out of fossil fuels, the largest driver of the climate crisis, and
major investment in renewable energy. On the other hand, it also means conserving 30-
50% of land, ocean and freshwater sinks.

protection and restoration A second fundamental shift is from offsetting by companies towards a contributions
approach. Offsets are far too frequently being used as a substitute for deep emissions
reductions, and equally are ill-suited to the uncertainties that are inherent to the
voluntary carbon market. It is almost impossible that each certified tonne of avoided
CO2 emission will prove real in an ex-post analysis, particularly for projects with a goal
DAMIAN FLEMING,
WWF INTERNATIONAL,
CARBON FINANCE FOR FORESTS TO DATE of reducing emissions from deforestation, and impossible to guarantee against reversals
at some point in the future, or leakage outside of the project area. For these reasons,
AND COLLEAGUES
Significantly greater investments in protecting and restoring nature and its ability one tonne of carbon emitted by burning fossil fuels is never equivalent to that saved
to sequester carbon are necessary if we are to deliver on the Paris Agreement, the from a forest-based project, so offsets are essentially a false economy. At the same time,
Kunming-Montreal Global Biodiversity Framework and the Glasgow Declaration on investing in forest and ecosystem protection and restoration yields multiple benefits, not
Forests and Land Use. It is widely acknowledged that mobilizing private finance will just carbon sequestration. Through a contribution approach,95 companies first account,
be crucial, alongside public and philanthropic funding. The voluntary carbon market disclose and reduce their value-chain emissions in line with an ambitious science-based
(VCM), originally intended as a bridge to future compliance markets, has been widely target, and then quantify their remaining emissions and – using a fair price of carbon96
heralded as one of the most promising market-based mechanisms: it has grown to – invest the resulting financial resources in activities or programmes for people, nature
around US$2 billion in size and is projected to grow at least five-fold by 2030. The and climate impact where they are best able to make the most telling contribution
appeal of carbon markets is easy to understand. However, the voluntary market remains towards global goals. These investments are not considered offsets, nor are they the
small and a drop in the ocean of what is needed overall to protect, conserve and restore basis for carbon neutrality or related claims. We are seeing many companies turning
forests and other ecosystems globally. towards this approach. WWF is working with Gold Standard to develop guidance on the
claims companies can make while following this approach.
The VCM has been tarnished by credibility issues that have been more publicly
exposed88 in recent years. Criticism is centered around three main areas. First, on Third, we need a shift from isolated projects to national and jurisdictional scale
the demand side far too many companies are relentlessly focusing on offsetting and programmes (and nested projects within them), with long-term investment, and human
using carbon credits as a short-cut to meeting spurious net-zero or carbon neutrality rights and environmental due diligence, in order to effectively tackle deforestation
claims – favoring high-volume, low-quality, low-price credits, and as a substitute for drivers and circumvent issues of leakage and permanence. Technical assistance
setting and delivering on credible science-based decarbonization pathways. Second, on accompanying climate finance is crucial in setting baselines and appropriate policy
the supply side there are credibility issues related to performance measurement and frameworks and enabling good governance. WWF’s NBS (Nature-based solutions)
verification based on the market’s need to establish counterfactual baselines which often Origination Platform has recently been established to provide critical ex-ante finance in
leads to carbon benefits being overstated (e.g. through inflated baselines, or leakage to addition to project finance to collaboratively scope, develop and deliver NbS portfolios
adjacent areas outside the project site), or where benefits risk being reversed later on that address threats and drivers efficiently, incorporate transparent and equitable
due to policy shifts or enforcement failures (permanence issues). Third, another major governance and benefit-sharing mechanisms, and generate durable impacts for climate,
criticism is that the market actors fail to fully engage with local communities during the biodiversity and sustainable development in a combined manner.
project design and benefits are not equitably shared.
A further important shift is from wholly market-driven approaches to a focus on impact
However, we certainly do not want to turn off the tap to private sector finance and landscape needs, and those of local communities. Market approaches naturally
that supports inclusive programmes that restore and protect our forests and other incentivize low-cost, high-volume transactions, and with a current average carbon
ecosystems. There are positive examples and important voices89 in support of REDD+, price of less than US$10 a tonne it isn’t surprising that we have such an abundance of
the VCM and other approaches to mobilizing private finance. low-quality projects. We must shift focus towards scaling climate funding for impact,
including co-benefits beyond carbon, as acknowledged in the innovative finance paper
To address many of the weaknesses of the VCM, there are a number of efforts to better
released by the GEF earlier this year.97
regulate the market and facilitate a rapid transition towards high-quality, high-integrity
projects – including national regulation and guidance from the Integrity Council for
the Voluntary Carbon Market,90 Voluntary Carbon Markets Integrity Initiative91 and the
Tropical Forest Credit Integrity Guide92 – all of which is welcome.

However, due to the systemic nature of the problems outlined above, there are
growing calls for a more fundamental shift away from certified tonne-for-tonne based
approaches towards a money-for-tonne contribution approach.93

20 FOREST PATHWAYS REPORT 2023 21

 NEED FOR INNOVATION There are well publicized global concerns over the integrity of
the voluntary carbon markets. However, as part of the process
There is an urgent need for new mechanisms that deliver finance to the world’s most
critical forests and the local communities and IPs that live in and around them. of laddering up to a compliance framework for nature recovery,
Countries with largely intact natural forests have significant, untapped and cost- if demand and supply side carbon market integrity issues are
effective mitigation potential in NbS that could be mobilized through carbon finance. fully addressed, carbon and biodiversity credits can make an
However, with accounting systems focused on emissions reductions or removals
coupled with low carbon pricing, these countries are not sufficiently rewarded important contribution to financing landscape level restoration.
for taking action to conserve their forests. WWF is working with Congo Basin WWF believes there is still a place for high quality high integrity
governments (see Deep Dive: Cross-region efforts to promote a responsible timber carbon credits, with strong safeguards.
supply chain in Gabon) to explore innovative mechanisms that provide greater
financial incentives to protect forests and stimulate a green economy. There is
increasing interest in biodiversity credits98 as another mechanism to deliver market-
based finance, although the market is very young with little demand signal to date –
and it will also need to overcome many of the criticisms of the carbon market listed
above.

CONCLUSION AND RECOMMENDATIONS

Forest-based countries’ calls for greater finance to conserve and restore forests and
support a green economy are increasing in volume.99 Alongside this there are growing
efforts to develop new mechanisms and platforms to enable finance and technical
assistance to flow, including the Forest Climate and Leaders Partnership launched at
COP27.100 Voluntary carbon finance undoubtedly has a contribution to make. A limited
fraction of these investments can be done via high-quality market-based approaches,
but there are a wealth of opportunities using non-market-based approaches which
should be favored. Key recommendations include:

•G
 reater demand-side regulation towards a level playing field that supports and
rewards companies to both rapidly decarbonize and invest in long-term, high-quality
NbS through a contributions approach that fairly prices carbon.

•E
 x-ante finance to support countries and jurisdictions to develop high quality
programmes with multiple benefits, including support for participatory planning,
feasibility assessments/spatial mapping, capacity-building and partnership
development, implementation planning and costing, carbon accounting, financial
modeling, and strategic aggregation of activities to achieve transformative impacts
at scale. WWF is establishing an NBS Origination Platform in selected priority
landscapes to service this need.

•S
 upport to develop new finance mechanisms that incentivize the conservation of high-
integrity forests alongside investment in a green economy, tailored to local contexts.

•G
 reater clarity in NDCs, NAPs and LT-LEDS in terms of ambitious, quantitative
GHG targets for forests, the use of carbon markets to meet climate goals, and the
inclusion and participation of IPs and local communities in policy processes and
implementation.

© Day’s Edge Productions / WWF-US

22 FOREST PATHWAYS REPORT 2023 23

 DEEP DIVE THE ROLE OF THE PRIVATE SECTOR

Do we need a new The role of the private finance sector in enabling and incentivizing deforestation has
come under increasing scrutiny, and a growing number of private financial institutions

Global Nature Bank?

have made voluntary commitments aiming to reduce their financing of deforestation,
such as through the FSDA.103 However, the scale of these financial flows is enormous
and represents one of the biggest barriers to halting deforestation. Public finance and
aid flows for forests cannot compete with, or in any way come close to offsetting this
huge tide of destructive finance.

INTRODUCTION
KAREN ELLIS, It is hard to estimate flows of private finance underpinning deforestation, given the
WWF-UK AND COLLEAGUES lack of traceability, transparency and accountability down supply chains. However,
the estimates that do exist104 suggest these financial flows are very large:
Deforestation is largely driven by economic activity that delivers incomes to local
producers and profits to national and global companies through global supply chains. • Global Canopy estimated that financial institutions invested US$3.6 trillion in
The financial benefits to the producer greatly exceed the value in financial terms of forest-risk companies in 2022.
leaving the forest standing. These are profitable investment opportunities, and as such,
are easily able to access private finance (e.g. loans or equity investment) from banks • A 2021 study by Global Witness105 found that banks and asset managers based in
and other financial institutions.101 The dysfunctionality being that, the value of forest the EU, UK, US and China had made deals worth US$157 billion with firms accused
conversion only outweighs that of standing forest because the true value of the forest of destroying tropical forest in Brazil, Southeast Asia and Africa since the Paris Climate
– to nature, people and climate – is not accounted for, a particular risk with regards to Agreement, and that these financial institutions obtained US$1.74 billion in interest,
tropical forest biomes due to their contribution to climate stability.102 dividends and fees from financing the parts of agribusiness groups that carry the
highest deforestation risk – primarily soy, beef, palm oil and pulp and paper.
Stemming the financial flows that bankroll forest destruction is vital if the alternative
forest finance mechanisms being tested at the moment (See section X) are to succeed. • A study carried out for WWF calculated that for UK financiers alone, financial flows at
However, the economic models currently in charge of the global forest-agriculture risk of contributing to deforestation from Brazilian soy and beef and Indonesian palm
system will mean compensating forested nations that could lose out as subsidies and oil supply chains stood at £200 billion in 2021.
finance flow pivot away from forest conversion. We lay out here some thinking around
• NGO Global Witness found that 360 asset managers participating in the Global
a potential alternative financial mechanism.
Financial Alliance for Net Zero held forest-risk investments worth US$8.5 billion
as of September 2022, a reduction of only around 3% in the size of forest-risk
investments held in the year since COP26.

It is clear that voluntary commitments made by private companies to tackle

deforestation have not worked. This is why the UK, the EU and the US are all
considering new laws to try and curb the financing of deforestation.

Reducing private finance flows which are driving deforestation is therefore the top
priority. However, this will have negative economic impacts on countries dependent on
exploiting their forest assets. Thus, new financing mechanisms are needed to facilitate,
incentivize and reward the protection and sustainable management of forests. This will
also be crucial for the more than 1.6 billion people estimated to be dependent on forests
for timber, food, fuel, jobs and shelter.106 Often forests are located in developing or
emerging countries which have a justified desire to continue to develop their economies,
but which have often struggled to access the finance needed to support a sustainable
development trajectory.

This arises for many reasons, including often relatively underdeveloped financial sectors
and associated green financing mechanisms, a lack of data on environmental impacts and
risks, and relatively high investment risks associated with developing countries which
deter private investment generally, and sustainable finance flows in particular.107 The
lack of concessional finance to support sustainable development pathways has also been
criticised, and there are growing calls for reform of the multilateral development banks
to better support sustainable development trajectories.108 UNDESA’s Financing For
Sustainable Development Report 2023 highlights that global sustainable development
prospects are diverging and that financing to support sustainable development pathways
is relatively low and has fallen further in recent years for many developing countries.

© Brent Stirton / Getty Images / WWF-UK

24 FOREST PATHWAYS REPORT 2023 25

 The challenge is that we need financial flows to invest in the protection, restoration and
sustainable management of forests in developing and emerging markets, of the scale
RECOMMENDATIONS
that is only available from the private sector, but without the requirements for financial We share this Big Idea thought piece as a way to start conversations about addressing
returns that private finance demands. the lack of finance for forests, raised in Section 2.1. A Global Nature bank could help
close the forest finance gap by:
One proposal to address this challenge is the creation of a new “Global Environment
Bank”, to which the private sector would be required to contribute on an annual basis, • Not requiring financial returns, with all the complex policy implementation, human
at a level determined by a single, well-reported measure – perhaps by turnover, or and institutional capacity and data that requires.
profit, or perhaps by residual carbon emissions if reporting of such data allows this to be
verified adequately – or indeed by exposure to deforestation. • Raising far more finance than could ever be available through public/government/
concessionary funding sources, and that can therefore provide strong enough
Ideally we would use a metric that helped to disincentivize environmentally incentives to overcome opportunity costs, and pay for the capacity-building needed
damaging investments, but the challenge with such measures is the lack of robust and to monitor implementation.
comparable company data, and though progress on company disclosure requirements
on their carbon emissions and nature risks and impacts is moving quite fast in some • Permitting nationally prioritized and locally designed forest management solutions
jurisdictions (e.g. through the Taskforce for Climate Related Financial Disclosures, the to be developed, free from the stipulations imposed by capital and nature markets
Taskforce for Nature Related Disclosures and the International Sustainability Standards created in the Global North.
Board) this is still at a relatively early stage, so data on these issues would be very
patchy. Thus it may be easier, in the first instance at least, to simply base the “tax” or
levy on the size of the company, as measured through a simpler and more well-reported
metric such as turnover.

This could in effect be a “Nature Recovery Tax” – which could be seen as a necessary
and relatively simple way to start valuing nature in our economic system, and to pay for
the natural capital upon which our whole economy depends. If applied across the board,
this tax could be set at a very low level for an individual company, yet it would still add
up to a very large number across the whole economy.

The Global Environment Bank would then utilize the revenues generated to finance
the ongoing protection of those natural assets located in the developing world that are
generating the largest social good at the global level. Importantly, this would not require
a financial return to be generated by the beneficiaries, which would remove a significant
barrier to financing for many forested nations. But it would require some proof that
protection or reforestation is effectively being provided. Thus ongoing financing would
be reassessed on an annual basis to ensure those natural assets were actually being
protected, e.g. using global satellite data backed up by some field data to provide
ground-truthing and assess, for example, the extent and condition of wildlife, all paid
for by the Global Environment Bank – and any failure to provide adequate protection
and deliver the outcomes expected would reduce the finance being made available.

The amount paid to a particular forest community would need to be enough to cover not
only the maintenance and enforcement costs associated with protecting those natural
assets, but also the opportunity costs associated with their use, if it is to effectively
incentivize their ongoing protection. This would in effect constitute a global, mandatory
payment for ecosystem services scheme.

Companies could potentially be allowed to increase their contribution voluntarily

in order to support the delivery of their own net-zero or nature-positive targets and
commitments if they chose to do so, but it would be crucial for the basic contribution
to be mandatory, and be applied across the board – ideally at the global level – as the
more countries and companies that participate, the smaller the tax required. While
this represents a small additional cost to business upfront, it will substantially reduce
the costs it will face going forwards arising from the otherwise ongoing environmental
destruction. Protecting a forest is relatively cost-effective compared to many other
investments that will be required to support the net-zero transition, e.g. to develop
new technologies.

© WWF-Netherlands

26 FOREST PATHWAYS REPORT 2023 27

 DEEP DIVE

How selective logging can lead to forest

© Flavio Conceição / WWF-Brasil

loss, and what’s being done about it

COLMAN O CRIODAIN, It is entirely understandable that those who are concerned with forest conservation
WWF INTERNATIONAL at the global level focus primarily on forest clearance. The scale of deforestation
worldwide, and especially in the tropics, represents an existential threat to humankind,
because of its implications for climate change and the provision of essential ecosystem
services. By comparison, concerns about declines in individual first-living species can
seem of less importance.

However, on closer examination, there are many animal species whose depletion erodes
the integrity of forest habitats; forest elephants and primates being just two examples.
But here we will confine ourselves to wild tree species that are highly valued in
international trade, either for their timber or for other products, and thus are removed
selectively from their forest habitats. Examples are rosewoods (Dalbergia species and
other genera), mahoganies (family Meliaceae but certain trees from other families are
also known as mahoganies in trade), cumaru (Dipteryx) and ramin (Gonystylus), all of
which are valued for their timber, while agarwood (Aquilaria and Gyrinops), lignum-
vitae (Guaiacum), frankincense (Boswellia) and African stinkwood (Prunus africana)
are all heavily traded for their aromatic or medicinal derivatives. To begin with, it is crucial that we continue to focus on issues of forest tenure, so that
those who live in or around the forest play a key role in deciding its future. If, as often
If these species are selectively harvested, why is their overexploitation a problem for
happens in regions where governance is weak, outside interests are given a free hand to
forest conservation? Is it not better to allow communities to profit from them if the rest
exploit forest resources, there is a much greater risk that they will focus on short-term
of the forest remains intact? Well, there are several reasons why we should be concerned.
profit, especially if those outside interests are organized criminal groups.
First of all, forest tenure by local communities is often insecure, so that the communities
Secondly, credible certification schemes can add value to forest products, while ensuring
who live in or close to the forest are not necessarily the ones who benefit from its
that the harvest of the species that provide such products is rendered sustainable.
exploitation. Often the benefits go to criminal gangs or corrupt entities who have
usurped tenure. However, where the value of the species or its products is particularly high, especially
when in international trade, further measures are necessary. Otherwise, it is hard for
More importantly, most of these species can be exploited sustainably, if the harvest is
poor countries with weak governance to resist pressure from vested interests to exploit
carefully managed. Measures such as setting minimum size, and leaving some mature
these species unsustainably for short-term gain.
trees to disperse seed, ensure the continued availability of the resource into the future.
By contrast, overexploitation is analogous to a family that sells the family home to meet The Convention on International Trade in Wild Fauna and Flora (CITES) was
a short-term need. It generates income in the short term, but it leaves communities negotiated in 1973 but had its origins 10 years earlier. In recent years it has often
impoverished in the long term. been portrayed as a punitive instrument that curtails economic freedom and national
sovereignty. But we should remember the motivation that lay behind it. In its eloquently
In addition, these species are an integral part of the forest ecosystem, and their removal
concise preamble, it recognizes that, while “peoples and States are and should be the
erodes the integrity of the ecosystem. Many of them provide food or other benefits for
best protectors of their own wild fauna and flora”, it is also the case that “international
both animals and people. Effectively, depletion of these species is a form of habitat
cooperation is essential for the protection of certain species of wild fauna and flora
degradation. Degradation, as we know, compromises the ecosystem services provided
against over-exploitation through international trade”. This is an excellent summary of
by forests; in that sense it is just as serious as complete clearance.
the underlying raison d’etre of the Convention.
Finally, and most compellingly, these species are what makes intact forests a valuable
CITES listed a number of tree species in its Appendices from the outset. However,
economic asset. As such, the economic value of forests is largely lost once these valuable
for the most part they were extremely rare species that were so near to commercial
species are depleted, making alternative uses of the land more attractive in economic
extinction that any further exploitation would be disastrous. Many were listed in
terms. Depletion of forest species is often a prelude to complete clearance.
Appendix I of the Convention, the 2% of the total number of species regulated by
Many of the mechanisms and measures that have already been developed and applied CITES that are so depleted that further commercial trade is banned. It is only in the
to forest conservation more broadly can also address the issue of selective removal of last 30 or so years that CITES has begun to focus on species where there is still scope
higher-value species. for viable commercial trade, but where the risk of overexploitation, driven by demand
in international trade, is high. Such species qualify for listing on Appendix II, which
comprises nearly all the 38,000 species whose trade is regulated by the Convention.

28 FOREST PATHWAYS REPORT 2023 29

 For such species, commercial trade is allowed if the specimens in question were legally overharvesting. Against that background, it is unfortunate that the listings of
obtained, and if an independent scientific authority has advised that the export will cumaru and trumpet trees agreed last year have a two-year delay for entry into force,
not be detrimental to the survival of the species; the so-called non-detriment finding. especially since Peru is a country with a history of difficulties in implementation
Thus, in 1994 at the ninth meeting of the Conference of the Parties (COP9), Afrormosia of timber listings. When big leaf mahogany was listed on Appendix II in 2002
(Pericopsis elata), African stinkwood (Prunus africana) and one agarwood species with a delay of a year for entry into force, there were widespread allegations that
(Aquilaria malaccensis) were listed in this Appendix. In 2002, at COP12, in the Peru exploited the window to offload timber stocks whose harvest would not have
face of concerted opposition from some range states, bigleaf mahogany (Swietenia complied with CITES rules.
macrophylla) was listed in Appendix II, the most commercially important species listed
up until that time. Ramin (Gonystylus species) was listed in Appendix II at COP13 3. Annotations: The option exists, when listing plants in Appendix II, to annotate the
in 2004, and the remaining key agarwood species (Aquilaria species and Gyrinops listing so that certain parts and derivatives are exempted. The norm for Appendix
species) were also added that year. II timber listings is to exempt all parts and derivatives except logs, sawn wood,
veneers and, sometimes, plywood. The intent is to capture the trade at the point of
Progress was slower in the decade that followed. However, in 2013, at COP16, in first export but to reduce the administrative burden for trade in finished products
response to the crisis regarding illegal logging in Madagascar, all that country’s that are manufactured outside the range states. In practice, getting the balance
rosewoods and palisanders (Dalbergia species), and ebonies (Diospyros species) were right can prove difficult. When the entire Dalbergia genus was listed in 2016 it was
added to Appendix II. In 2016, at COP17, the entire genus of Dalbergia was listed in that considered necessary to include larger finished products within the scope of the
Appendix, signaling an increasing tendency to list species at the generic level to avoid listing because of their high value, while exempting musical instruments and other
laundering of endangered species as non-listed lookalikes, a safeguard that is provided smaller worked items. However, the initial annotation was worded too inclusively
for in the Convention text, even when some of the species in question are not themselves and generated a lot of extra work with little conservation benefit, so that it had to be
at risk. At COP18, in 2019, cedro (Cedrela species, also members of the mahogany amended in 2019. More commonly the reverse can occur. A proposal by Thailand
family) was added to Appendix II. Finally, COP19 in 2022 earned the nickname in some to list Indochinese rosewood in Appendix II was successful at COP16 in 2013 with
quarters of the “COP of the trees”, when it added several genera of precious, slow- the standard exemptions. However, Thailand had to come back to secure COP17
growing Latin American timber species to Appendix II: cumaru (Dipteryx species) approval for listing all parts and derivatives of Indochinese rosewood because of the
and trumpet trees (Handroanthus, Rhododendron and Tabebuia species). African scale of illegal trade in Southeast Asia. In recent years, DRC started exporting sawn
populations of three further genera were also added: Pterocarpus (which includes the wood of afrormosia that was planed or had a tongue-in-groove joint on one edge,
species kosso, Pterocarpus erinaceus, already listed in 2016), Khaya species (African claiming that it was exempt under the annotation. This necessitated a narrowing of
mahogany), and Afzelia species (doussie). the annotation in 2019.

These listings, all of commercially important species, all in Appendix II, have 4. Non-detriment findings: As stated above, issuance of export permits for
raised the profile of timber in CITES. Whereas the Plants Committee, the plant Appendix II species requires prior advice by an independent scientific authority in
science committee of the Convention, used to devote most of its time to discussions the country that the export will not be detrimental to the survival of the species,
on ornamental or medicinal plants, timber species now occupy a major part of advice that is known as the non-detriment finding or NDF. In practice, permits are
the meeting agendas. Producer groups, including those representing musical frequently issued with weak NDFs or none at all. In some cases, this has led to trade
instrument manufacturers and users, and those engaged in the manufacture of suspensions, and the EU also has a mandate in its legislation to refuse imports where
aromatic products, are engaging with the Convention. On the other side of the it believes the NDF to be insufficient. However, many more cases go under the radar.
divide, members of conservation NGOs who previously attended only the Animals
Committee are often showing up at Plants Committee meetings. The Convention 5. Corruption and criminality: Illegal export, transit and import of listed species
Secretariat, together with the International Tropical Timber Organisation, provides continues because of organized criminal groups, and often because of the corruption
capacity and funding (the latter largely thanks to the EU) to assist range countries in or complicity of figures in authority, from rangers right up to senior politicians. The
implementing the listings. And, in a number of instances, trade from non-compliant largest ever seizure of any CITES species was a shipment of 30,000m3 of rosewood
countries has been suspended; Lao PDR for Indochinese rosewood (Dalbergia from Madagascar that was seized by Singapore en route to China. A minister came
cochinchinensis), some West and Central African countries for kosso (Pterocarpus from Madagascar to testify that the shipment was legal, despite the existence of a
erinaceus), and Madagascar for its ebonies (Diospyros spp.), rosewoods and moratorium on exports, and the shipment is now in legal limbo. It is not unknown for
palisanders (Dalbergia spp.) being just three examples. prosecutors in Madagascar who are deemed “overzealous” in their pursuit of illegal
logging kingpins to be removed from their posts, while environmental human rights
None of this is to suggest that all the problems concerning international trade in high- defenders have frequently been imprisoned on trumped-up charges.
value timbers have been resolved. Some problems have arisen along the way, including
the following: 6. Reluctance to use the compliance mechanisms available under CITES:
One of the strengths of CITES is its compliance mechanisms, which allow for all trade
1. Listing a species too late: It took four attempts over 10 years to get bigleaf in CITES-listed species or trade in certain species of concern to be suspended when
mahogany listed in Appendix II. COP14 in 2007 rejected a proposal to list cedro, and there is evidence of non-compliance. In practice, however, parties to CITES, acting
it was 12 more years before another proposal was tabled and passed, by which time through the Convention’s Standing Committee, are reluctant or slow to apply such
the most valuable species (Cedrela odorata) had been severely depleted. measures, by which time much damage can already be done.

2. Delayed entry into force of listings: The listing of bigleaf mahogany in Appendix So where do we stand now? Nobody is suggesting that CITES is the silver bullet for
II, when it finally did happen in 2002, was accompanied by an annotation delaying preventing illegal or unsustainable trade in high-value timbers. As with all harmful
the entry into force for one year. Ostensibly it was to give countries more than commodity trade, there is no single measure that can achieve this; rather a suite of
the usual three-month window to prepare for implementing the listing, although measures is needed. But CITES has demonstrated its capacity to evolve and has proved
really it was part of a compromise to get the necessary two-thirds majority vote at its worth as one of the key weapons in the fight against unsustainable trade in timber
COP12. Some countries, notably Peru, exploited this window to engage in rampant and other forest products. Thus, it contributes to forest conservation more broadly.

30 FOREST PATHWAYS REPORT 2023 31

 DEEP DIVE

The dark side of the timber trade

JOHN DODSWORTH,
WWF-UK
INTRODUCTION – SCALE
Forests are home to approximately 80% of the world’s terrestrial biodiversity109 and
support some 1.6 billion people worldwide, who rely directly on forests for food, shelter,
energy and income.110 The formal (legal) forest sector contributed over US$1.5 trillion to
national economies across the world in 2015;111 it directly employs just over 18 million
people, and supports a further 45 million jobs through indirect employment across
the supply chain.112 However, illegal logging continues to threaten the world’s forests,
perpetuating corruption, fuelling social conflict, and depriving governments of revenue.

According to Interpol the illegal timber industry is worth almost US$152 billion a
year,113 and accounts for up to 90% of tropical deforestation in some countries. It causes
serious economic, environmental and social damage, and in some cases fuels conflict.
Illegal logging undermines the livelihoods of millions of people who depend on forests
for their survival, disincentivizes timber enterprises from operating within the law, and
erodes the natural resource bases of countries that depend on these ecosystems.

The impact of illegal logging is far-reaching, with devastating environmental, social

and economic consequences. It is responsible for deforestation, habitat loss, species
extinction, and is often the initial foray into wider land conversion for agriculture.
Illegality in the timber sector can take many forms, including but not limited to the
logging of protected species (e.g. CITES listed), harvesting and transportation of
logs from countries that have national log export bans, logging in protected areas,
misrepresentation of logging permits, and overharvesting and not respecting the rights © André Bärtschi / WWF

of local communities. This list is by no means exhaustive but provides a snapshot of

forms of illegality that aid and abet activities that undermine emergent forestry sectors.
Illicit proceeds from forestry crime may also be used to fund conflict, as well as support
other organized crime types such as drug trafficking and arms, thus undermining
countries’ ability to develop.
Corruption
The Chatham House report describes how “low wages, inadequate capacity and
GLOBAL SHIFTS IN THE TIMBER SECTOR insufficient training provide an enabling environment for corruption and abuse of
power as well as for the pursuit of informal sources of personal revenue”116. This
In the last 20 years there have been significant shifts in the timber sector: a report enabling environment is entrenched in illegal logging operations, with a wide range
from Chatham House notes that while some advances had been made in addressing the of people involved at all stages of the supply chain, from field officers to high-level
illegal timber trade, progress has been slipping. This regression has been attributed to representatives (e.g. to obtain logging permits, to avoid controls, and to export and
three main factors. Firstly, new markets have emerged for high-value timber that have import illegal timber). An Interpol report from 2016 notes that the forestry sector
less stringent policies relating to timber legality.114 Secondly, forests are increasingly estimates the annual global cost of corruption to be worth some US$29 billion.117 Given
being cleared for agricultural commodities to meet global demand. As much as half the forest industry is a key income-generating sector, the leakage of funds outside of
of all tropical timber traded internationally now comes from forest conversion, of official channels is a significant loss. As an UNCTAD report from 2019 notes, “Illegal
which nearly two-thirds is thought to be illegal.115 Thirdly, small-scale production has logging and illicit trade in timber undermines sustainable economic growth, economic
increased in many countries, and these operations often sit outside the scope of policy development and environmental conservation…[and] not only puts the livelihoods of
and regulatory measures, and are often incorporated into larger timber operations. forest-dependent communities at risk, but also undermines legitimate commerce within
the forestry sector by distorting timber markets and reducing profitability”.118

In summary, corruption is considered one of the main blocks to progress in reducing

illegal logging. An example of the scale of the illegal profits that it can bring is with
rosewood, the most trafficked wildlife species, with sellers making up to US$50,000/m³
and with a value increasing 700 times between the criminal logger and end buyer. 119
The timber sector attracts corruption as it remains a profitable sector with high
margins and international markets to export to, and continuing demand for high-value
tree species.

32 FOREST PATHWAYS REPORT 2023 33

 STEPS TO ADDRESSING ILLEGALITY
There is global recognition of the vital role forests play in global climate, biodiversity
conservation and livelihood generation for countless IPs and local communities, in
addition to the climate mitigation they provide by storing hundreds of gigatons of
carbon. However, the illegal timber trade continues to threaten the planet’s large forest
basins (including the Amazon, Congo and Southeast Asian tropical forest biomes), with
further impacts elsewhere including within Asia, South America and temperate and
boreal forest biomes. This threat converges with other serious organized crime to limit
opportunities for forested nations and territories to fully involve green and just forest
economies in their sustainable and equitable development.

Therefore the following points are of utmost importance:

Strengthened law enforcement – Timber ministries and associated government

departments must ensure adequate training and resources are allocated to allow for
effective investigations and enforcement to address the illegal timber trade. A number
of countries have instituted digital timber legality assurance systems which, if properly
implemented, can play an important role in controlling illegality and corruption.124
Governments should also invest in control technologies such as wood ID testing,125
remote monitoring by satellites and drones, tracking devices that can be embedded
in trees, roadside surveillance cameras that monitor logging trucks, etc.

Coordination between government departments and export countries –

Forestry crime is not just a conservation issue but has ramifications far beyond forests
for economic growth, equitable growth, climate action, and wider health of governance
within the country. Coordination between countries’ financial intelligence units and
© WWF-Brasil forest authorities will be crucial to ensure that investigations do not end at the point
of seizure of the cargo: instead, “following the money” can start at that point to trace
where the money has gone, and seek to prosecute or freeze assets.

Ensure forest crime is seen in the same bracket as serious organized

CRIME CONVERGENCE – MEETING OF BAD ACTORS crime – The reality at present is that forest crime is not prioritized in the same way
by countries. However, as outlined above and by new research, forest crime and more
The illegal wildlife trade and illegal logging operations are closely interlinked.
broadly environmental crime can no longer be viewed as just a conservation issue. The
Illegal wildlife and timber often move through the same geographical hotspots, and
UN reports that illegal logging accounts for between 15% and 30% of global timber
traffickers use the same trading and shipping methods. A UN report notes that the
trade, and rises to 50% to 90% of the trade from tropical countries.126 Therefore the
same transnational criminal syndicates are behind both illegal wildlife trading and
illegal timber trade remains a low-risk, high-reward sector and it will require national,
forest crimes.120
regional and international collective action to shift that balance to ensure that forests
This convergence has been seen in links between the illicit narcotics trade and links are protected and sustainable forest sectors are able to thrive.
with illegal mining and the illegal timber trade in Latin America. This shows the
The private sector needs to step up efforts to avoid illegal wood – Steps need
co-dependencies between organized criminal groups, who use legal trade routes
to be taken to ensure that companies (as well as government officials and other actors)
to move their illicit cargoes and utilize the global financial system to move funds
can more easily assess, understand and manage the most significant risks associated
around the world, often behind shell companies and offshore companies.
with timber procurement. There are a great deal of resources that have been developed
to support these ends: a good example is WWF’s new Wood Risk Tool,127 which
THE TRUE COST OF ILLEGALITY consolidates inputs from several respected, independent international organizations
focused on conservation and anti-corruption to provide a reliable and convenient
As discussed, the illegal timber trade is estimated to be worth up to US$150 billion121 source of information about risks related to tree species and country of origin. The
a year, with one report noting that “Illegal logging [is] responsible for a loss of public private sector can also play a vital role by pursuing and promoting best practices in due
assets in developing countries in excess of US$10 billion annually to which must diligence, including but not limited to the use of digital traceability systems, wood ID
be added an additional US$5 billion annually in lost taxes and royalties”.122 These testing,128 and robust third-party certification.
numbers are likely to be at the lower end of the scale. This compares to the total
official development assistance (ODA) commitments by members of the Development
Assistance Committee (DAC) in 2022, which was US$204 billion.123 This highlights
the size and scale of the financial losses that could otherwise support countries to
develop equitably and support standing forests. However, these illicit financial flows
generate significant profits for organized criminal groups and corrupt government
officials, undermining global, regional and national initiatives to protect and support
forest economies.

34 FOREST PATHWAYS REPORT 2023 35

 DEEP DIVE In order to incentivize the sustainable management of forest resources, a shift from a

Seeing more than wood in the trees:

single-revenue approach to full-value forest management and stewardship is needed.
Additional approaches include increasing access to markets, diversification of timber
products, and expanding to non-timber forest products [see figure 7 below]. WWF’s
work is also showing that payments for ecosystem services can be a viable approach

increasing the value of responsible

to pursue, and helps improve the business case for those that manage their forest
resources responsibly.

forestry through ecosystem services

Figure 7: Enhancing the business case for Sustainable Forest Management

GIJS BREUKINK, To preserve our forests, we need to recognize their multiple

SENIOR ADVISOR RESPONSIBLE
FORESTRY, FORESTS FORWARD, values and develop financial instruments that include the true
WWF-NETHERLANDS total value of forest systems. Besides strict protection, we need
to manage production forests sustainably – but for that to
happen, incentives need to be in place.

WWF is working across its offices with forest managers who

see more than wood in their forests and piloting approaches
such as payments for ecosystem services that aim to increase
the business case for responsible forestry.

NOT SEEING THE FOREST FOR THE TREES

More than half (54%) of the world’s forests are managed either wholly or partly
for production.129 Many of these forests are managed unsustainably or are prone to
PAYMENTS FOR ECOSYSTEM SERVICES
degradation, which often leads to deforestation and conversion to other land uses.130 Ecosystem services133 are the benefits that people obtain from nature. Forests provide
society with a wide range of benefits, from reliable flows of clean water to productive
Sustainable forest management has led to considerable improvements in the way we
soil and carbon sequestration. In FSC-certified forests, valuable ecosystem services are
regard and treat our production forests. Positive examples include improved inclusion
protected; in 2018, FSC introduced a procedure134 to demonstrate and communicate
in forest management decision-making processes, more set-aside areas alongside
the positive impact of responsible forest management on ecosystem services. It is also
production units, and reduced levels of forest degradation in harvested forests –
important to note that higher levels of ecosystem services are found in forests with more
for instance through the implementation of reduced impact logging in tropical and
tree species.135
pan-tropical forests.

Progress towards an increase in sustainable forest management globally has been

supported by the widespread presence of enabling frameworks and certification
systems. However, such progress has been uneven, and the rate of forest loss is
accelerating in tropical low-income countries where coverage by forest management
plans remains low and forest certification insignificant.131

© FSC
The sad truth of our time is that forest finance systems and harmful subsidies ensure
that it is often more profitable to convert forests to other land uses (such as agriculture)
than it is to manage them for preservation (e.g. through community or sustainable
forest management). Furthermore, the production costs for certified operations are Types of ecosystem services
much higher than those that operate uncertified or informally [see Figure 7]. On top of
By verifying these positive impacts, the FSC Ecosystem Services certification aims to
this, there are few price premiums paid; everyone wants FSC-certified products, but no
facilitate payments for ecosystem services and provide access to other benefits.136 This
one wants to pay the real cost.
aims to ensure that those who responsibly manage forests and those who take action to
Today, only about 13% of the world’s forests are certified.132 If we want sustainable forest preserve forest ecosystem services get the increased business value they deserve.
management and certification thereof to be a viable option for the majority of forests
managed globally, we need to work on strengthening the business case for sustainable
forest management.

36 FOREST PATHWAYS REPORT 2023 37

 THE FUTURE OF PAYMENTS FOR ECOSYSTEM SERVICES
Ecosystem services represent a topic of growing interest to companies, not only through
a carbon lens but through a biodiversity lens too. Increasingly, companies are becoming
aware that simple tree planting is insufficient to claim effective restoration of forest
ecosystems, recognizing that forestry projects must go beyond “business as usual” to
secure all the co-benefits that only a multifaceted project can provide. As such, WWF
believes that payments for ecosystem services (PES) – including the support of concrete
actions for the management and improvement of a forest’s biodiversity and other
services – is a viable pathway to enabling sustainable forest management at scale.137

We note that transitions to full-value sustainable forest management practices for our
global forests are also going to be dependent on the full implementation of land tenure
rights for the IPs and local communities whose practices are associated with better
outcomes for forests across the tropics.138

We can’t just capitalize on one ecosystem service, either; forests are multifunctional
and provide so much more than wood or fixing carbon. So we also need to find ways of
securing value for all of the ecosystem services forests offer. As with the pilot project
examples [see boxes], WWF will continue to test and prove this concept with the aim of
© Karine Aigner / WWF-US © James Morgan / WWF
increasing the value of standing forests.

In order to take this work to scale, the following needs to be addressed: BIODIVERSITY PROTECTION AND EMISSION CONNECTING ECOTOURISM AND
•C
 reating new funding opportunities – Today the PES market mainly focuses
on carbon projects. Funding from the private sector may increase if the PES market
REDUCTION IN A TROPICAL FOREST BIODIVERSITY TO SUSTAINABLE
demonstrates more innovative and multifaceted projects that generate greater and CONCESSION, REPUBLIC OF THE CONGO FOREST MANAGEMENT IN ROMANIA
more diverse benefits, particularly for biodiversity and carbon services. A better
connection between the supply of payments and the supply of multiservice projects Through its signature corporate engagement programme In Maramures, Romania, WWF is working with the
can occur in different ways, such as through a call for projects, the creation of a for forests, Forests Forward,141 WWF is working with a Strâmbu Bãiut Forest Directorate in a unique biodiverse
dedicated fund or market mechanisms (e.g. biodiversity credits), and others. forest concessionaire, Interholco, in the Congo Basin, mosaic landscape that includes a Natura 2000 site
to diversify its streams of income underpinning the and UNESCO primeval forest. Together with local
•C
 apacity building – There is genuine interest in the subject of carbon and sustainable management of its FSC-certified forests. communities, they aim to better protect these areas and
biodiversity among companies, but to capitalize on this better education is needed Interholco is working to bring ecosystem services to are exploring a payment for ecosystem services scheme
on the role of ecosystem services and how to quantify and value them. For forest market in the following ways: to fund this conservation. The Forests Directorate
PES projects to be credible and risk-free, training must be provided to foresters received FSC Ecosystem Services certification for
and financiers. Those willing to set up PES initiatives must rely on financiers who Carbon: The forest concession is being managed Recreation and Biodiversity:
understand the political, technical and financial benefits of the tool, plus forestry according to reduced impact logging (RIL) principles
actors who understand the requirements of this new source of financing. Many FSC- and emission reductions are being assessed following Recreation: A local entity has been set up comprising
certified forest managers have shown an interest in the Ecosystem Services procedure; the VERRA approved RIL-C methodology and set-aside the Forest Directorate, local community groups and
some are already engaged and building experience.139 methodologies.142 The company aims to generate credits WWF to develop ecotourism in the region, increasing
on the basis of the reductions realized and bring those the business case for sustainable forest management and
•P
 ES toolboxes – The development of practical tools is needed to guide foresters on to market. improving local livelihoods.
establishing projects that guarantee a benefit to the funder/buyer, to market projects,
to calculate a payment on solid bases (additionality, validated methodologies), and to Biodiversity: The forest was granted FSC Ecosystem Biodiversity: These forests are also home to some of
monitor and evaluate the benefits in a credible way.140 Services certification for biodiversity, based on vast the largest populations of large carnivores in Europe. The
populations of great apes and forest elephants effectively same entity is seeking investments to improve wildlife
protected within the concession and for maintaining protection and promote human and wildlife coexistence.
forest integrity. Now, the company is seeking sponsors These two pathways are designed to create a diverse
to increase biodiversity protection measures. income stream and help create local employment143.

Payments for these services combined with the

traditional business model (timber) will help companies
such as these to serve as new models for multifunctional
forest management.
More information
Investment opportunity

38 FOREST PATHWAYS REPORT 2023 39

 DEEP DIVE DEFORESTATION AS A COMPLEX PHENOMENON

Lessons from Colombia’s forests The drivers and underlying causes of deforestation in Colombia have been thoroughly
documented in the past years. Colombia’s environment and conflict history are
intertwined. We cannot hope to understand one without the other, and this conflict-
environment angle is slowly becoming better assessed and addressed by decision-
makers and stakeholders, as well as receiving proper consideration in national146 and
VERONICA ROBLEDO, More than half of Colombia’s territory is covered by forests. Whether it’s mangroves, international147 media.
CONVERSION-FREE SUPPLY humid tropical forests, dry forests, montane cloud forests or riparian forests, these
CHAIN TECHNICAL SPECIALIST precious ecosystems host over 55,000 flora and fauna species144 and have been protected This shift in appreciating the country-specific context for Colombia’s forests can set
WWF-UK (WITH SUPPORT FROM for hundreds years by IPs and local communities. However, Colombia has experienced a valuable example for global forest goal instruments, such as the Forest and Climate
WWF-COLOMBIA OFFICE) a long internal armed conflict that has been mostly played out in its forests. Colombia’s Leaders Partnership (FCLP) country packages. A copy and paste approach to addressing
environmentally strategic forested territories have been under significant threat and forested nations’ challenges will always hamper the success that we need in order to
impacted by degradation and deforestation due, among other factors, to the complex meet the globe’s forest goals, one nation at a time.
conflict dynamics.145
Colombia’s foregrounding of its own unique context has been crucial in the efforts to
address deforestation in the country, which have already resulted in effective action,
with deforestation rates across the country finally decreasing.148

The conflict-environment context has also contributed to a more nuanced and

comprehensive analysis of drivers and underlying causes of deforestation, as some
dynamics are misleading if considered out of the conflict context.
Map 1: Conflict and environment convergence in Colombia
DEFORESTATION DRIVERS, HIDDEN IN PLAIN SIGHT
Traveling across Colombia to witness deforestation hotspots, direct drivers are all too
evident. Large-scale clearance for cattle-ranching pastures, often of low and inefficient
productivity, is easily visible; as is poorly planned infrastructure development, and
expansion of the agricultural frontier. But these visible landscape systems disguise
bigger underlying causes. Cattle ranching in some Amazon states for example (given
it is the main cause of deforestation in Colombia and is responsible for more tree loss
than coca, illicit logging or illegal gold mining)149 is actually camouflaging other more
significant factors: land grabbing, historical processes of colonization, armed conflict,
and narco-trafficking.150

To describe deforestation and degradation in tropical forested nations internationally,

as we so often do, without acknowledging this all-too-common foundation of internally
and externally driven socioeconomic pressures, sets us on a path to failing to address
the drivers of forest loss, before we have even attempted to intervene in them.

COLOMBIA’S POST PEACE AGREEMENT FORESTS

Since the Peace Agreement in 2016, Colombia has suffered an exponential peak in
forest loss due to transformation of land mainly for cattle pasture.151 The Peace Accords,
although a positive step towards a peace-building process for the country, also ended
a long-lasting mandate from the Revolutionary Armed Forces of Colombia (commonly
known as FARC) to control territories through the protection of forests. Since then, and
due to a lack of strong state presence and rule of law, other insurgents and criminal
groups have taken advantage of that political vacuum and a new economic opportunity
to position their operations for new land-use activities such as land grabbing and
extensive unsustainable cattle ranching systems. Various studies have found an increase
in the deforestation rate both within protected areas and associated buffer zones in the
years following Colombia’s peace agreement.152

In the post-agreement years, land has also been cleared by these groups for coca
growing, laundering money, illegal gold mining and logging.153 An understanding of the
complex dynamics of illicit activities is critical when aiming to design effective solutions
to tackle deforestation.
Source: Pablo Negret for Mongabay Latam (2019)

40 FOREST PATHWAYS REPORT 2023 41

 Adding to these complexities, many displaced communities and conflict victims have As for cattle ranching,163 WWF-Colombia has partnered with the UK government and
been forced to clear land for remunerative uses and seek livelihood options in remote the biggest retailer company in Colombia, Grupo Exito, to build new business models for
forested areas (many of those inside forest reserves of National Natural Parks).154 sustainable cattle ranching systems and contribute to a more transparent and traceable
In other areas, deforestation has been incentivized by cultural perceptions of local beef supply chain. WWF has also supported projects across the country for ranchers to
development, as forests are sometimes perceived as obstacles to economic growth, transform their inefficient cattle ranching systems to silvopasture approaches. Finally,
and an impediment to improved social status, which culturally in some communities by securing a strong and long-lasting partnership with the Colombian government,
can be defined by the amount of cattle you possess or the area of cleared land you WWF-Colombia is directly contributing to President Petro’s new Contention Plan
own.155 Moreover, for several communities across the country, clearing forests has been Against Deforestation,164 and to the reestablishment of environmental rule of law
falsely perceived and legally misinterpreted as a route to obtain land rights of vacant in deforestation hotspots and conflict-affected areas.
territories.156 So whether deforestation is caused by illicit, informal or legal avenues, it
highlights how important it is to assess this phenomenon considering demographic,
economic, political, institutional and cultural factors.
LESSONS TO CONSIDER – HOW CAN THE COLOMBIAN CASE
CONTRIBUTE TO THE FCLP PROCESS?
THE ROAD TO SUCCESS
Peacebuilding as a way to tackle deforestation
So how does civil society operate in such a complex and dynamic post-conflict There is now a detailed warfare ecology literature that speaks to the complex positive
environment to achieve the aims of conservation? and negative indirect impacts of conflict on nature and biodiversity around the world.165
With armed conflict having occurred in more than 60% of the world’s biodiversity
For over four decades, WWF-Colombia has been one of the leading organizations in the hotspots over recent decades,166 ignoring the conflict context when considering our
country supporting the transformation of social and economic systems across forested future forests is likely to hamper success.
areas. An inclusive approach has proven how conservation models and community-
based forest governance can become an empowerment tool for communities to Colombia’s approach to addressing deforestation through the construction and
guarantee sustainable economic alternatives and multiscale comprehensive actions strengthening of social and environmental dialogues with IPs and local communities
(like the FLEGT project (Forest Law Enforcement, Governance and Trade) that instead of heavily militarized and securitized interventions is one of the critical lessons
WWF has led with the Colombian government and main donor embassies which also learned that FCLP membership can consider when designing and/or supporting country
strengthened regulatory frameworks to address main deforestation drivers). packages where conflict dynamics are a driver. Understanding deforestation as a socio-
environmental process that takes place both inside and outside the forests, rather than
Projects such as “Strengthening Forest Governance in Colombia”157 have strengthened simply as a biophysical process or security matter,167 will allow initiatives to be designed
capacities of 150 families in local communities in key forested regions through valuing considering cultural identity and people’s livelihoods, as well as political intricacies and
standing forests. This approach has secured around 4,000 hectares of sustainably used conflict dynamics (which vary widely depending on the region).
forests through the development of supply chains for non-timber forest products such
as acai, cacay, cacao, moriche and jagua, and a responsible use of legally sourced timber.

The organization has also established bottom-up processes for effective local governance
such as a national network of community-based monitoring, sharing practices and
lessons learned between communities experiencing deforestation in different areas of
the country. One of the most recognizable legacies of WWF in this agenda has been the
support provided to IPs and local communities in all five regions ofColombia to develop
a robust and inclusive framework for social and environmental safeguards for REDD+
projects.158 With financial institutions, agro-industrial corporations and retailers, WWF-
Colombia has established strategic partnerships to support those sectors to incorporate
forest and climate criteria into their policies and portfolios. Through their national
policy advocacy efforts, they have been able to contribute to some of the most innovative
financial mechanisms like the recently approved GCF-WWF Heritage Colombia
programme159 led by National Natural Parks and the Ministry of Environment in
Colombia, a US$145 million public-private effort that will secure financing in perpetuity
for the sustainable management of key ecosystems, avoiding 46 million tonnes of
emissions and benefiting almost 17 million people in Colombia.

As for conflict-environment approaches, WWF-Colombia, alongside peace and

environment partners, has widely reported the dangers that environmental defenders face
daily when tackling deforestation,160 and has been one of the leading organizations tackling
the impacts of mining in the most affected region in Colombia,161 and in the country’s
adhesion to the Escazu’s Agreement. The latter has resulted in 13 new policy instruments,
3,000 people trained in sustainable management of forests, the declaration of four new
protected areas (covering 500,000 hectares), eight municipalities with new territorial
planning processes, and more than US$1 million in sales of 15 businesses that are low
© Luis Barreto / WWF-UK
deforestation risk. Currently, the office is leading the creation of an Amazon Alliance to
reduce the impacts of gold mining and associated illegal activities in the region.162

42 FOREST PATHWAYS REPORT 2023 43

 Connectivity at the center
Colombia has seen increasing and significant attention paid to its Amazon forests in
recent years. This region has now become a competitive ground for donor funding and
other public/private resources. Although it is positive to see finance flowing to this
important biome, this has also resulted in fragmented and duplicative interventions on
the ground that can overwhelm communities and hinder long-term sustainability.

Interested interventions should keep in mind:

1. Connectivity with other key ecosystems – As mentioned above, Colombia is a

country with a variety of forests, and the high attention paid to the Amazon forests
has neglected efforts in other key environmental and biodiversity regions where
deforestation, conversion of non-wooded land, and conflict dynamics are exacerbated
(like the tropical forests in the Pacific region, or the flooded savannas and riparian
forests in the Orinoquia region). When investing in the Amazon region, it is key to
understand how this connects to existing initiatives, and how this can impact other
forest states or buffer ecosystems, as this lack of comprehensive approaches can lead
to deforestation leakage. Building capacities through skillshares and lessons learned
from communities in different forest states within a country168 and between conflict-
affected countries is a positive step towards transformational action (maximize
impact of traditional knowledge, best practices and peacebuilding processes).

2. C
 onnectivity between forests and cities – As many of the solutions promoted
for sustainable livelihoods rely on the development of supply chains and markets for
non-timber forest products and sustainable timber products, or ecotourism projects,
the prosperity of those will depend on how well connected they are to nearby urban
centers and main commercial cities across the country.169 The lack of infrastructure,
access to markets, public services, traceable supply chain systems, and rule of law
hinders the possibility of those communities to secure a sustainable and competitive
economic alternative. More attention needs to focus on those urban settlements and
their market dynamics and differentials, as this is where most of the population in
those areas live. So interventions should acknowledge this economic geography, and
embrace the role of cities and intermediary urban settlements in forest protection
and sustainable use.

International leadership
Colombia has historically been a leading country in international environmental and
sustainability frameworks. As one of the founding countries of the SDGs agenda, and
a key leader under the AILAC Group under UNFCCC, Colombia has promoted an active
and constructive participation for the achievement of the 2030 goals. It was the first
nation to achieve the 30x30 goal, and it holds one of the greenest and most inclusive
Constitutions in the world.

Even if this still has significant gaps when translated into local action (as Colombia is
still one of the most unequal countries in the world, and fragmented armed groups have
been surging across all regions of the country), Petro’s new government represents a
key political opportunity in the predominantly left-wing movement of governments in
South America to drive the needed change for more environmental ambition. The recent
Amazon Summit joint statement reaffirmed the role of forests as centers of sustainable
development and sources of solutions, and Colombia could play a role in leading by
example translating this into a robust and comprehensive country package that can
inspire other countries under the FCLP framework.

© Luis Barreto / WWF-UK

44 FOREST PATHWAYS REPORT 2023 45

CONCLUSIONS AND
14. Increasing pressure from infrastructure development A fundamental shift is needed in how we value forests, one
and extractive activities needs to be tackled through which recognizes the multiple values that forests have for
participatory, integrated and biodiversity-inclusive people, nature and climate. The forest value system we are

RECOMMENDATIONS
spatial planning as outlined under Target 1 of the Global currently driven by, which prioritizes the conversion of
Biodiversity Framework, together with robust strategic forest to other land uses over the protection and sustainable
environmental assessments. management of standing forest, is associated with our
continued failures to meet global forest goals.
PATHWAYS: There is more opportunity than risk in a move away from
single-value foci for forests, in which they are either valued
• Accelerating the recognition of Indigenous Peoples
for their carbon, or as having greater value converted
What needs to happen to protect, restore 8. The knowledge, practices and actions of Indigenous and local communities’ right to own and manage their
to agriculture, to one in which the multiple values of
Peoples and local communities, who contribute to lands, territories and resources – realizing, respecting
and sustainably manage forests? We outline protecting forests, must be recognized, respected and and permanently securing those rights.
forests govern the decisions we make and how we fund
principles to guide forest decisions. valued. When rights have been delivered Indigenous commodities practices.
Peoples and local communities should also be supported • Mobilizing massive financial flows, both public and
1. Global climate, forest and sustainable development goals Forested nations need a fair share of forest finance to protect
to realize those rights through facilitating access to private, and repurposing harmful ones to support green
are intertwined. If we are committed to our climate and their standing forests. The packages that deliver this support
markets, finance, legal protection and technologies. and sustainable forest economies and trade.
sustainable development goals then we must make good need to use appropriate existing financial instruments, but
Their rights must be secure. also develop innovative ways of financing where needed. The
on our forest commitments. • Reforming the rules of global trade that harm forests,
9. Reductions in illegal logging, management, trade, and getting deforesting commodities out of global supply international actors that preside over trade and financial
2. Sufficient finance must flow to forests, Indigenous chains, and removing barriers to forest-friendly goods. flows from major tropical forests need to become the
overexploitation (of products, timber and wildlife) must
Peoples and local communities. Collaboration and sustainable changemakers halting primary tropical forest
be enabled by equitable protection and effective law
coordination between forest-rich and donor nations and • Shifting towards nature-based and bio economies. conversion and degradation and delivering sustainable
enforcement on all axes.
the private sector should steer this finance flow. forest management and deforestation and conversion-free

3. Meeting forest goals requires strong implementation,

10. Multiple forest value systems must be recognized, CONCLUSIONS production and trade.
beyond carbon storage, conversion potential and
accountability and robust tracking of targets. Goal We are at a major turning point with irreversible Forests need a future in which $100s of billions per year
economic asset. Our forest management and trade
tracking should fully and transparently track pledged consequences. Climate change and the drivers of forest in harmful subsidies stop and become part of the $460bn
systems must recognize all that forests do for people,
finance. conversion and degradation are currently in charge of our needed in investment in sustainable forest and food
nature and climate.
forests’ future, but they do not have to be. What is needed economies, in which we move from isolated project-scale
4. Public finance should be used smartly to leverage private voluntary carbon market activity, to jurisdictional scale,
11. We must see national commitments to ambitious now is for gaps in the accountability and implementation of
finance; this should be part of the progress tracking verified systems of carbon and biodiversity finance, from
and full implementation of the Global Biodiversity global forest commitments to be filled, greater finance where
of international forest commitments. Biodiversity and supply chains underpinned by illegality and encroachment
Framework, and ensure the target to reduce the global it is needed, repurposing and scaling up where finances and
carbon markets can catalyse finance for forests, but they into Indigenous territories to tenure rights to the 30% of
footprint of consumption includes national and import- instruments to deliver already exist, if we are to get on track
are not a panacea, and need reforming to be useful at forests in unrecognised Indigenous Territory stewardship,
based footprints. This target must be translated into to meeting global forest commitments.
scale. and from global trade systems that cannot deliver protected,
national objectives and actions within updated National
Biodiversity Strategies and Action Plans (NBSAPs), The pathways, however, have a sequence; mobilizing, restored and sustainably managed forests to ones that can.
5. Smarter forest finance must be delivered at pace, scale
including numerical footprint targets.170 reforming and shifting finances and global trade systems
and justly to local actors, in ways which take into account
will only deliver for forests once those forests are under the
individual forested nation contexts, alongside investment
12. Commodity supply chains must be deforestation and stewardship of those who hold secure rights to own and
to support green economic pathways. We need
conversion-free, be rights-based, and must not allow manage their land, territories and resources, free from the
innovation in this space, scaling financial mechanisms
spillover of conversion to other (e.g. grassland and impacts of illegality. Accelerating the recognition of rights
that are working, and finding new financial instruments
savannah) ecosystems. to Indigenous Peoples and local communities and realizing
that can be activated quickly.
them, securely and permanently, underpins all the other
13. Deforestation and conversion-free import regulations pathways to meeting forest goals. We can acknowledge that
6. Repurposing of subsidies that are harming forests has
need to be fully implemented, and to recognize transitions are difficult, but we must abandon pathways
to begin in earnest (in line with Target 18 of the Global
that importer countries also have responsibility that have not worked to protect forests, and expand what
Biodiversity Framework), ensuring that that funding
for greenhouse gas emissions from deforestation is working.
is delivered to forests and to support sustainable
and conversion embedded in traded goods. These
agriculture and food systems.
recognitions cannot fully be served under existing Year on year we are failing to make progress towards global
7. We must recognize and deliver land tenure rights for frameworks such as the UNFCCC. Current UNFCCC forest goals. Where systems of financing, governance,
all Indigenous Peoples and local communities, at an national carbon accounting procedures define producer stewardship and management are making gains, they are
accelerated speed. Rights delivery must be supported countries as responsible for these emissions. However, not enough to push against the continuing incentivization
by strengthened self-governance systems, empowered embedded emissions should also be defined in the NDC of forest conversion, and forest-harming subsidies. We
institutions and appropriate recognition, as forest targets and implementation plans of importing nations. face a sustainable forest funding gap that could amount to
partners and stewards. We ask that Nationally Determined Contributions, under hundreds of billions of dollars every year. The risks that
UNFCCC reporting processes, include assessments of come with these failures threaten people, nature and our
deforestation and degradation-embedded emissions, climate stability.
especially related to agriculture. © Shutterstock / Gustavo Frazao / WWF

46 FOREST PATHWAYS REPORT 2023 47

 We do not need any more forest goals.
What we need is to start implementing the
ones we have justly, with ambition, and at
pace, growing positive momentum in both
the public and private sectors.
Our call to action is for governments and
businesses to get on track, make good on
their public commitments to halting forest
loss, protecting, sustainably managing,
and restoring forests and to start making
continuous and meaningful annual progress
towards our forest goals. We expect
businesses and governments to step up at
COP28 and outline how they will deliver
their commitments.

© Jody MacDonald / WWF-US

48 FOREST PATHWAYS REPORT 2023 49

ANNEX 1

METHODS
COMMODITY FOOTPRINTING Given the global nature of this work, and unlike the studies
cited above, only raw and semi-processed commodities
were included, not those as an ingredient or component in
Estimating the quantity of imports and consumption manufactured products (e.g. palm oil embedded in processed
food) or those embedded in exports as part of the upstream
The methods for estimating quantities of imports and
production process (e.g. soymeal used in pig feed embedded
exports and their land footprint follows the approach
in exported pig products). See Table A for lists of the
used for similar studies, including the UK,171 Belgium,172
commodity co-products included within this analysis.
Denmark,173 France174 and Switzerland,175 the Netherlands,176
and for one sub-national study in Wales.177 All countries that were responsible for at least 3% of global
exports and 3% of global imports are included in the
Import data from the UN COMTRADE database178 was
analysis. This covers the majority of global exports and
used to estimate the quantity (net weight) of imports for
imports for all of the commodities (Table B). Although a
2021. We chose this database because it allows a similar
significant amount of trade is conducted by third-party
method to be replicated for other countries, giving us a
countries, this was not assessed here. In part that is
global comparable overview of trade flows. As all of the
because the EU is treated as a single trading block, which
commodities are exported as co-products (e.g. soy beans,
significantly reduces the amount of intermediate trade
soy meal, and soy oil), net weights were converted into
(the “Rotterdam effect”), and partly because sensitivity
“whole commodity equivalents” using conversion factors
analysis showed that doing so would provide limited
from the technical literature.179
additional information for analysis of this scope.

Table A: Commodity co-products included in the analysis

COMMODITY HS CODE COMMODITY

Soy 1201 Soya beans; other than seed, whether or not broken

1507 Soya-bean oil and its fractions; whether or not refined, but not chemically modified

2304 Oil-cake and other solid residues; whether or not ground or in the form of pellets, resulting from the extraction of soya-bean oil

Palm oil 1511 Palm oil and its fractions; whether or not refined, but not chemically modified

151321 Vegetable oils; palm kernel or babassu oil and their fractions, crude, not chemically modified

151329 Vegetable oils; palm kernel or babassu oil and their fractions, other than crude, whether or not refined,
but not chemically modified

230660 Oil-cake and other solid residues; whether or not ground or in the form of pellets, resulting from the extraction
of palm nuts or kernels oils

Cocoa 1801 Cocoa beans; whole or broken, raw or roasted

1802 Cocoa; shells, husks, skins and other cocoa waste

1803 Cocoa; paste; whether or not defatted

1804 Cocoa; butter, fat and oil

1805 Cocoa; powder, not containing added sugar or other sweetening matter

Coffee 90111 Coffee; not roasted or decaffeinated

90112 Coffee; decaffeinated, not roasted

90121 Coffee; roasted, not decaffeinated

90122 Coffee; roasted, decaffeinated

© Jürgen Freund / WWF

90190 Coffee; husks and skins, coffee substitutes containing coffee in any proportion

50 FOREST PATHWAYS REPORT 2023 51

Table B: Proportion of global exports and imports The method does not allow for GHG estimates for specific The methods used to estimate GHGs from land-use change
accounted for by countries exporting and importing parcels of land, due to the lack of primary data at the here and in national GHG inventories are different, as are
at least 3% of global trade necessary level of spatial detail. The figures used are the dates for which emissions are estimated. The two sets
therefore averaged for entire countries, meaning it is not of data are therefore not directly comparable. However,
COMMODITY EXPORTERS IMPORTERS possible to distinguish regional variations in emissions or they do provide a general picture of the likely importance of
assign deforestation to a specific piece of land. The values emissions embedded in trade to producer country emissions.
Soy 86% 57% are therefore an indication of the risks of deforestation/
Oil palm products 88% 65% land conversion and GHG emissions associated with the NDCs
Netherlands’ imports of such commodities.
Cocoa 77% 67% All producer country NDCs were assessed for the way in
Coffee 55% 58% Comparison of GHGs embedded in exports which they covered emissions from land-use change, and
their treatment of deforestation, according to the categories
to national GHG inventories
Estimating the footprint of imports shown in Table 7. NDCs are available from the UNFCCC
NDC Registry.185
The GHG estimations from land-use change (described
Estimating the land area required to produce the quantities above) were compared with total emissions (including
of commodities exported is straightforward, as yield data is LULUFC) reported to the UNFCCC.184 UNFCCC reporting
readily available.180 The yield for each country, each year, was procedures mean that different countries have different
used to convert the imported volumes into an estimated land reporting schedules, largely depending whether they are
area required for production, i.e. land footprint. Annex 1 (industrialized countries that were part of the OECD
in 1992) or Annex 2 countries. The most recent data recorded
Estimation of GHG from land-use change on Climate Watch for each of the producer countries is given
in Table C.
The Land Use Change Impact Tool181 was used to estimate
commodity-specific per-hectare CO2e emissions for soy, Table C: UNFCCC national GHG inventory dates used
cocoa, coffee, coconut, palm oil and maize.

The tool allows emissions from land-use change to be COUNTRY LATEST UNFCCC DATA AVAILABLE
assessed when the country of production is known, Argentina 2012
but the exact parcel of land used to produce the crop is
Brazil 2016
unknown. This matches the level of detail of our provenance
calculations which is determined by the available data. For Canada 2019
this scenario, the tool uses an indirect approach to calculating
China 2014
emissions from land-use change (LUC), based on the relative
rates of crop expansion at the expense of different previous Colombia 2004
land uses in a country. It uses FAO data on direct LUC Côte d’Ivoire 2000
(i.e. deforestation, conversion and crop-to-crop change)
associated with a crop in a certain country and divides by the Ecuador 2012
total expansion of the same crop in the country, assigning a Ethiopia 2013
rate of LUC (and therefore GHG emissions) per hectare of
Ghana 2006
crop expansion.
Guatemala 2005
Crop expansion is calculated for each year by comparing the
average harvested area of the crop in the three most recent Indonesia 2000
years for which data is available to the average of three years Lao PDR 2000
20 years ago. For each subsequent year, this “baseline”
Malaysia 2011
will therefore shift or move up by a year and data on LUC
in a specific year is not counted in subsequent years. The Myanmar 2005
associated emissions per hectare are then calculated based
Nigeria 2000
on methods consistent with the Intergovernmental Panel on
Climate Change (IPCC)182 and the PAS 2050-1 framework,183 Thailand 2013
including “amortization” so that the total emissions from the Uganda 2000
20-year period of the LUC are apportioned equally over the
20 years (see tool’s methodology for further details). Ukraine 2019

United States 2019

The commodity-specific per-hectare CO2e emissions was then
multiplied by the importing countries’ land footprints per Uruguay 2019
commodity in each producer country to estimate the GHG Viet Nam 2013
emissions associated with LUC per country, for each crop. © WWF-NL

52 FOREST PATHWAYS REPORT 2023 53

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128 Ibid Amazon. https://news.mongabay.com/2023/07/peace-a-new-tool-for-
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129 FAO. 2020. Global Forest Resources Assessment 2020: Main report. Rome.
168 Such as the IPs exchanges that the Colombian government has promoted
130 Pacheco, P., Mo, K., Dudley, N., Shapiro, A., Aguilar-Amuchastegui, N. et
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169 Cheston, T., Goldstein, P., Freeman, T., Rueda-Sanz, A., Hausmann, R. et al.
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170 We note there is no mention on whether the national commitments are
133 https://unece.org/ecosystem-services-0 only on domestic footprint or also include overseas footprint, but the
134 https://connect.fsc.org/document-centre/documents/resource/316 overall aim is to reduce global footprint. While open to interpretation, both
135 Gamfeldt, L., Snäll, T., Bagchi, R., Jonsson, M., Gustafsson, L. et al. 2013. domestic and international footprint of major consumer countries need to
Higher levels of multiple ecosystem services are found in forests with more be addressed to achieve the global footprint of consumption and production
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136 Jaung, W., Putzel, L., Bull, G.Q., Kozak, R. and Elliott, C. 2016. Forest objectives, linked to GBF targets to take transformative actions to reduce
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137 Vallauri, D., Darteyron, L.-E. and Laurans, Y. 2022. Paying Foresters to
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138 https://www.sciencedirect.com/science/article/pii/S0960982222015408
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139 Ibid.
173 Jennings, S. and de Korte, M. 2018. Risky Business: the risk of corruption
140 Ibid.
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141 https://explorer.land/p/organization/ifo/forests-forward
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178 UN Comtrade. 2023. https://comtradeplus.un.org/
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150 Murillo-Sandoval, P.J., Kilbride, J., Tellman, E. et al. 2023. The post-conflict 181 de Weert, L. 2021. LUC Impact Tool. Blonc Consultants.
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157 https://www.wwf.org.co/?378471/Foresteria-comunitaria-una-alternativa-
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158 Camacho A., Lara I. and Guerrero R.D. 2017. Interpretación Nacional de las
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