B (3:41)

Well, we've been living in a globalized economy for quite a while and 20 years ago, if we were having this conversation, we would be focused on international flows in the timber trade. And at that time, one of the largest drivers of deforestation and forest degradation was international trade in timber, both legal and illegal. Well, since then the world has changed in a number of ways. And now one of the many of the largest drivers of deforestation are for commodities that replace forests. And by that I mean cattle to produce beef for domestic consumption and export soybeans, palm oil, pulp and paper plantations. And so if we want to address deforestation, we have to find ways to reform supply chains so, so that markets are sensitive to the environmental impact at the source of production of those globalized commodities.

A (4:35)

How do we do that?

B (4:37)

Well, there's a big discussion going on right now about exactly how to do that. And a lot of energy focused on the private sector supply chain actors and various voluntary initiatives such as certification. And so for example, there is a grouping of consumer facing retail companies that have made a commitment to remove deforestation from their supply chains. But I think it's generally recognized that there are limits to private voluntary initiatives and that ultimately as long as there are bad actors who are willing to deforest highly valuable landscapes to make some money, that it's the government that has got to step in and ensure spatial planning processes that have integrity to make sure that the right lands are allocated for agricultural production, for example, lands that have already been deforested, but also enforce the law to protect those forests that have been designated for protection. And so a combined approach that marries the voluntary private initiatives with strengthening of governance and regulatory frameworks in the producer countries is hopefully a winning combination.

A (5:45)

That leads in beautifully to the next thing I want to ask you about after the break, which is your work here at cgd. This is the Global Prosperity Wonkcast from the center for Global development. I'm Lawrence McDonald, my guest today is Frances Seymour. She's a senior fellow here at CGD and has joined us recently to work on reducing deforestation around the world. We'll be back in just a moment. Welcome back to the Global Prosperity wonkast. I'm Lawrence MacDonald. My guest, Francis Seymour, senior fellow here at the center for Global Development. Frances, you were saying just before the break that voluntary efforts will take us just so far. There also needs to be better regulation of land use. Presumably the price signals are very important. If I am a landowner or somebody who maybe doesn't own the land but has access to it, and I'm able to come in and cut down the trees and plant a palm oil plantation, I stand to make a whole lot of money. And the cost of the destruction of the forest are going to be mostly borne by somebody else. How can that be changed?

B (7:15)

Well, you've certainly characterized the problem well. And there are multiple strategies that can be used to try to make a forest more valuable standing than being cut down. A number of those strategies include trying to put a value on the many services that forests provide while they are standing. The focus of a lot of interest now is on something called reducing emissions from deforestation and forest degradation, which is a mechanism being debated as we speak actually in Bonn, part of the UN Framework Convention on Climate Change, which goes.

A (7:49)

By the UN acronym red, REDD plus.

B (7:53)

That's right.

A (7:54)

Stand for all those things that weren't included in forest destruction and degradation.

B (7:58)

Well, it actually the PLUS refers to including the carbon stocks and enhancement of carbon stocks in forests that are already standing. So it's not just reducing the loss of carbon from standing forests, but also enhancing the carbon through further sequestration.

A (8:14)

I didn't understand. I learned something new.

B (8:17)

And so one of the objectives of that mechanism is to try to mobilize finance from northern countries to pay down the costs on the part of the forest rich countries for preserving their forests. And that would include both opportunity costs, as you say, if you convert forests to other uses, you can sometimes make a lot of money. But also the very important transaction costs and the costs of implementing. For example, in a lot of the forest countries in the world, the actual land tenure is not clear. And in order for some kind of payment system to work, you have to be clear who do you pay? Who owns the forest? And so a lot of work needs to be done, for example, to map and recognize indigenous peoples territories who may have land claims over forests that are not yet recognized by the state. So there's a very large agenda of clarifying forest tenure rights before that kind of mechanism can work.

A (9:12)

Speaking of redd, this is a good point to mention the organization that is going to be supporting your research here and CGD work on forests more broadly. Norway and in particular norad, the Norwegian Development Agency. They've been a real leader in this in putting how much money is it on the table to encourage developing countries to protect their forests. I'm going to take a stab, but I'll get it wrong. So you should tell me it's billions.

B (9:37)

It is billions. And this was a commitment made at the climate change negotiations that happened in Biden in 2007 when this so called REDD mechanism first really came out on the stage. And what the Norwegian government has done is not only to fund a number of multilateral initiatives to promote and develop this mechanism called redd, but they've also entered into some very interesting bilateral agreements with forest countries with a billion dollars on the table for Brazil and another billion dollars on the table for Indonesia, and in which it's a payment for performance scheme that the Norwegians have promised these funds in return for action and performance in reducing forest based emissions. And you mentioned earlier, Lawrence, why is CGD interested in this kind of research? Well, in fact, we've tried this in other areas of development assistance. CGD has made a name for itself in doing research on cash on delivery aid, so other kinds of payment for performance in other sectors such as health or education. But we also have experience with, for example, structural adjustment loans where there was a payment for policy performance. And I think that RED is a very interesting example of a payment for performance that's been framed very differently than conditionality of the past. And it's a great idea. Because of the lack of a global agreement on climate change, it hasn't really been tried yet in the sense of really having significant cash outlays on the table. But a lot of experiments are underway and so a lot of experience is there to be harvested. And it's very exciting to have a chance to look at it.

A (11:24)

My understanding is that the Norwegians had hoped that their money would prime the pump, that it would be, if you will, a down payment that cap and trade would have passed in the United States, that the European Emissions Trading Scheme would have worked better than it is. There would be the beginning of a global price on carbon and therefore some players would be looking for inexpensive ways to reduce carbon. And one of the least expensive is stop destroying the forests. And there would be some kind of flow of money from the north, to the south. We all know that those things did happen. The European trading scheme is collapsing. We got no price on carbon in the United States. So we don't have this demand, if you will, for red credits, as the experts would put it, in the north. And as I understand it, one of the things that Norway is hoping that we and others, I should say we have partners in this Climate Advisors, a private sector advisory firm just across the street here. They're looking for us to help build the demand for those credits, that is to say, to make players in the north more willing to pay for forest conservation. Do I have that right?

B (12:36)

I think that's right. And I think one of the disappointing thing that's happened in recent years is that everyone got all dressed up and went to the altar for red with the anticipation that a post Kyoto agreement would be reached in COPA Copenhagen. And then in fact that didn't happen. And subsequently there's been a scrambling in Red World to come up with a new vision for how the finance and the mechanisms would work in the absence of such an agreement in large scale finance. And one of the concerns is that as one of my colleagues put it, Red would suffer from aidification. In other words, if it were funded only through aid budgets, it would suffer from some of the pathologies that we know tend to creep into aid funded programs. So trying to make Red different and get it right is a real challenge that we're all grappling with.

A (13:25)

We're going to take our second break for the final section of the show. There's two things I want to talk to you about. One is CGD's Forest Monitoring for Action or Forma and the role that that might play in verifying protection of forests and inducing more payments. And then of course you've come here with a very, very big agenda, one of which is to produce a report on these issues. You just today shared a draft outline. It's still a ways in the future, but I'm hoping maybe you can give our listeners a sneak preview of some of the things that you're going to be addressing in that report. This is the Global Prosperity wonk cast from CGD. I'm Lawrence McDonald. We will be back in a bit. Welcome back to the Global Prosperity Wonk cast. My guest today is Frances Seymour, senior fellow here at the center for Global Development. We're talking about her work on forest conservation and preservation, in particular on inducing greater willingness in the north to pay for protection of forests in the tropical world through a UN program that goes by the acronym of Red Francis. It seemed to me you talked about aidification of the program, and I know from my colleagues here, including Michelle de Nevers, who you'll be working with, that there's a concern that not only was there the potential for aidification, that the money might be coming out of the channels of aid, but that it would be distributed in all of the worst ways that aid has been done. Which is to say, rather than focus on whether or not the forests are still standing, we would train forestry officers and we would train monitors and we would do system building. And all of that's very good, except that by the time you're done, sometimes you're worn out and you don't know, as we know well from education and health, you don't actually focus on the outcome, you focus on the process. How does FORMA fit into a different view of how we might proceed?

B (15:42)

FORMA is a tool to make what's happening in the forest, since particularly to forest cover, more transparent and more available to everyone. And clearly that kind of information is critical to any REDD mechanism, where it has to be clear where deforestation has taken place and also a sense of compared to what should have happened. So what FORMA does is make transparent where deforestation is taking place now.

A (16:15)

And it's using satellite data for those who don't know, developed by our former colleague, now retired, David Wheeler. He's got all this free data falling down from the satellites, uses some algorithms which I will never understand, and then produces rapidly updated as frequently as every two weeks, maps down to 0.5 km squared. That shows you is the forest still there or not, right?

B (16:39)

That's right. And what it can allow you to do in, combined with other sources of data, is to get a better handle on what likely scenarios of deforestation are in the future. For example, we've known for a long time that the best way to accelerate deforestation is put a road through the forest, because that then just provides a channel for illegal loggers or colonists or others to come in and further degrade or convert the forest. So this kind of data enables a more sophisticated analysis of those kind of trajectories, which in turn enables the putting together of what are called reference emissions levels. In other words, what's going to have to be negotiated for these REDD programs to work is a baseline or a reference emissions level, so that a country's performance in reducing deforestation is compared to what, you know, what would have happened otherwise.

A (17:30)

Now, reference emissions level, does that mean you actually need to measure the CO2 that's coming up, or can you measure some proxy thing, which is the amount of forest that stands?

B (17:39)

Well, the amount of forest that's standing is a first good proxy. But we do have data sets that allow the conversion of forest cover data to an emissions density. And of course, not all forests are created equal. There are some forests that are relatively carbon poor. So, for example, some of the dry forests in Africa, there are other forests, such as the peatland forests of Indonesia, that are unbelievably carbon rich. And so you definitely want to add that data overlay to get a more nuanced picture of where the priorities are for reducing deforestation.

A (18:10)

I was reading, maybe it was in your outline that those forests, it's not like you cut them down, you release the carbon and you're done, you cut them down, the peat catches fire and it burns for years and years and years and years. Is that right?

B (18:21)

Well, that's right. I call it the gift that keeps on giving. Because once a peatland forest is drained, the exposed organic matter that's been accumulating for perhaps thousands of years suddenly starts an oxidation process, whether just through degradation, decomposition, or through repeated burning. And that carbon store just keeps on being released into the atmosphere for years and years and years until the peatland subsides to below the ambient water level. And so unlike forests on mineral soil, where when you cut it down, you have a large pulse of emissions from that surface vegetation and a little bit more from the soil from a peat swamp forest, that soil carbon just keeps on being emitted for years and can be 18 or more times the amount of carbon from another forest that's not on.

A (19:13)

So protecting those forests would be a very high priority.

B (19:16)

That's right.

A (19:17)

They're also very biologically diverse.

B (19:19)

Absolutely. And that's one of the things about protecting forests, is you can choose your reason for doing it, because there are so many reasons. Certainly the mitigation of climate emissions is one, but also adaptation to climate change. Forests are the ecosystems that help regulate our water supply, that help pollinate our agricultural crops, that help protect against natural disasters like forest fires or landslides. And so there are so many reasons to protect forests and the biodiversity that resides within them.

A (19:49)

That's cute animals.

B (19:50)

Well, all those cute animals. Exactly.

A (19:52)

Actually, you know, I care about it for all those reasons, but I have to say, when I see a picture of one of these monkeys or birds or other animals that lives in the forest, I find that to be incredibly powerful and sad. When you think that, you know, if this land is destroyed These animals are gone. They can't move elsewhere.

B (20:10)

And don't forget there's also a huge amount of human well being and human cultural diversity. That depends on the forests. There was research done by C4 scientists a number of years ago, counting the number of species and the number of uses for different species in the rainforest, and it gets up into the thousands. I mean, it's unbelievable, the diversity of uses of various forest products by the communities who've been living in them for hundreds of years. And when the forests is lost, that cultural diversity is lost as well.

A (20:41)

I want to turn just briefly before we wrap up to your outline. We're not going to have time to go through it in much detail, but just to give listeners a sense of how comprehensive and I think powerful this report is going to be, it's got three sections, the science, the economics and the politics. The science, I think we've almost covered that the forests are critical to reducing the risk of climate change. We've touched a bit on the economics. I want to jump straight to the politics. This politics is really tricky. What are you going to look at in terms of the politics of getting consensus for action to protect the tropical forests?

B (21:22)

Well, I think there are a number of political dimensions to the REDD issue. One is within the climate negotiations or climate policy arenas themselves where, you know, when the Kyoto agreement was negotiated, forests, you know, were on the table. But a red type mechanism didn't get accepted for lots of reasons, including lack of technology, but it was put back on the table by forest nations a number of years ago. So the politics of including forests in climate have changed.

A (21:51)

And that's rather different from the attitude of developing countries and a lot of other parts of the climate negotiations where they're saying, you know, you made the problem, you fix it. They're saying, let's talk about forest.

B (22:03)

Well, it's one of the areas where there's a potential for everybody to win. Because another part of the politics is the domestic politics, where while it's true that there are some very strong vested interests in business as usual, for example, this extensification of palm oil plantations or other drivers of deforestation, there are other latent constituencies for conservation. And to the extent that people understand the degree to which forests are responsible for maintaining agricultural productivity, for controlling floods and landslides, for helping them adapt to the climate change, that is clearly in train, those domestic constituencies to preserve forests can also be mobilized. And the question then becomes, how can the international community help in a responsible way? And I think the politics of such things as helping the private sector become a constituency for positive change, Recognizing that global markets are changing and becoming more environmentally sensitive. It's all part of the picture.

A (23:04)

I know when David Wheeler was developing forma, and of course, he's a man of many enthusiasm, he was so excited when he realized that he could get this information out of the freely available satellite data. He was even conjuring a world in which it would be possible for an individual, somebody like me, to say, this is my square kilometer, and do a forest sponsorship the way I might do. In fact, I do a child sponsorship and say, I'm going to pay 50 bucks, 100 bucks a year as long as this piece of forest is standing. And then there would be some transfer mechanism whereby this money would become available to local people to protect the forest rather than to profit by harvesting it. Could you imagine a world in which something like that would work, that there could be, like, micro sponsorships of forest protection?

B (23:50)

You know, why not? And anything that can help create constituencies for strengthening the rights of that family or that community to the forest itself and to any revenue flows that may be generated by a sponsorship program or a government program or a carbon market or whatever it is to incentivize protecting the forest. Let's look at. Give it a look.

A (24:13)

Frances, it's really a delight to have you here as a colleague. I'm looking forward to working with you and to tracking this issue and doing everything that I can and my colleagues here can to help to amplify the influence of your work. Welcome to the center for Global Development.

B (24:27)

Thank you, Lawrence.

A (24:28)

This has been the global prosperity wonkcast from the center for global development. My guest today is Francis Seymour, A senior fellow, new arrival here at cgd, and we have been talking about reductions in deforestation, especially in the tropics, the connection with climate change, biodiversity, and all of the many other services that come from forest. You can find the wonk cast online on itunes and on stitcher. Just search for wonkcast or cgd, or indeed search for Francis Seymour and subscribe to hear a new interview every week. Until next time, I'm Lawrence macdonald. Thanks for listening, Sam.