Andrew Hutson is EDF's Director, Global Value Chain Initiatives.
The world’s attention has been on Brazil lately. With an exciting World Cup this past summer, an election season full of drama (including a plane crash), and the coming Summer Olympics in 2016, it has been easy to overlook the piece of news that has the greatest impact on all of our lives: the remarkable decreases in rates of deforestation in the Amazon. With little fanfare (at least from the general public), deforestation decreased 70% since 2005 and Brazil has become the world leader in reducing greenhouse gas pollution.
But while this progress impressive, it is important to note that we’re still losing over 5,000 square kilometers of forest a year in the Amazon. More importantly, we’ve seen a slight uptick in the rate of deforestation over the past two years, with an increase of 29% from 2012-2013. That number looks likely to increase again this year.
As the number of companies, governments, NGOs, and indigenous peoples who signed the New York Declaration on Forests last month demonstrated, there is an eagerness to address this issue across all sectors of society. Among other goals, signatories to the Declaration seek to halve the rate of loss of forests globally by 2020 and end natural forest loss by 2030. To get there, we need a scalable and systematic approach to meet this ambitious, yet achievable goal. EDF believes one solution is the creation of Zero Deforestation Zones (also referred to as jurisdictional approaches) – nations or states that are able to demonstrate reductions in deforestation within their borders as the most effective way to save forests the scale of entire landscapes, rather than individual parcels of land.
A new report by Datu Research, Deforestation in the Brazilian Beef Value Chain, supports this notion.
The report, commissioned by EDF, finds that progress in decreasing deforestation rates could easily be reversed unless ranchers are offered the right incentives to switch practices on their ranches and the right policy frameworks are adopted by companies and governments. It currently makes far more financial sense for a rancher to clear new forest than to move to sustainable pasture management. As a result, they may be forced to either continue to deforest or switch to other crops such as oil palm, which is expected to more than double by 2020 in Brazil.
The initial production costs of ranchland management show clearing forests is currently cheaper than adopting deforestation-free "pasture management." Source: Datu Research
The report also concludes that jurisdictional approaches have the potential to address many of the root causes of deforestation and
trim administrative costs across the value chain, reduce leakage, and increase retailer and consumer confidence in the veracity of deforestation-free products.
So, ranchers need financial incentives in order to make the necessary investments to drive production intensity increases and meet the requirements for the various certification schemes covering deforestation. Such incentives could come from a number of sources including financial mechanisms such as policies to Reduce Emissions from Deforestation and forest Degradation (REDD+), or bilateral aid from the international community dedicated to ending deforestation. Norway, for example, has pledged to donate $500 million per year and has spent nearly $750 million on the Amazon Fund since 2009. We also should not forget that there are plenty of domestic resources to address these challenges as well. Brazil is a rapidly growing economy with a GDP of over $2 trillion. In addition, one of the strongest incentives can come from the preferences of buyers in supply chains, who may simply refuse to purchase beef associated with deforestation.
But more importantly, public and private sector initiatives to end deforestation need to be more comprehensive. Moving forward, efforts need to move beyond the focus of single crops or supply chains and build on the progress of lessons from certification and commodity roundtables. Important synergies exist between a jurisdictional approach to supply chains, like Zero Deforestation Zones, and public policy. Implementing supply chain commitments at the jurisdictional level reinforces the incentives for governments to put in place policies that reduce deforestation within an entire jurisdiction, and builds off the existing structure for monitoring and verifying reductions in deforestation at a jurisdictional level. The two approaches are mutually reinforcing and can help solve this challenge in an affordable and achievable manner.
For additional reading, see Dom Phillips's piece in The Washington Post: Small ranchers the key to Amazon deforestation. This post originally appeared on the EDF+Business blog.