Extractive sectors such as forestry drive vast flows of domestic and international finance. By mapping the financial landscape, Côte d'Ivoire can focus efforts on leveling the playing field to meet it's environmental goals. Photo: Carlos Riano / FAO
Côte d’Ivoire is taking groundbreaking strides to level the playing field for REDD+. The challenge now: turning data into policy.
Countries engaged in efforts to reduce emissions from deforestation and forest degradation (REDD+) face an uneven financial landscape; vast flows of money - both domestic and international - fuel activities that convert forests to more lucrative uses. This is not new. Emerging economies are initially almost wholly dependent on primary (extractive) sectors such as agriculture, mining and forestry that create wealth from natural capital to support basic infrastructure and services. As countries transition to secondary and tertiary sectors, however, care is needed to ensure that forests and other natural resources, which provide essential ecosystem services, are not exhausted and where possible are restored to more sustainable levels.
To accelerate this transition, information is needed on the hidden impacts of deforestation within the broader economy, and few countries have the data to support this level of decision-making. In addition, most conservation efforts, including REDD+, have focused on increasing the scale of finance to ecosystem-friendly, “green” activities, with very little attention paid to the much larger “grey” flows of finance that potentially degrade natural resources. This tendency runs the risk of missing the bigger picture and failing to address underlying structural issues: If you’re trying to lose weight, it’s no good just increasing the number of healthy salads you eat, without reducing the donuts, burgers, and other unhealthy calories in your diet.
With the support of the UN-REDD Programme and the European Forest Institute, the Ivorian REDD Secretariat (SEP REDD) has been at the forefront of new research to understand the underlying financial landscape influencing deforestation and forest degradation. Côte d'Ivoire’s forests are in a critical condition. Over the last several decades, vast areas of rich, primary forest have been logged for timber and fuelwood, and converted to other land uses to support the production of cash crops such as coffee, cocoa, and rubber. Since the early 1900s, Côte d'Ivoire has lost over 50% of its natural forests and, at current rates of deforestation, its remaining forests could be cleared in as little as 10 years.
A new study conducted by Climate Policy Initiative and Impactum – a local Ivorian NGO - highlights that the abovementioned “grey” flows in Côte d'Ivoire outweigh REDD+ finance by a factor of five to one. The study analyses international and domestic public finance in 2015, and finds that at least FCFA 84.2 billion (US$ 140.7 million) was invested in “grey” activities, predominantly related to agricultural intensification, that did not safeguard against forest loss. In contrast, just FCFA 16.8 billion (US$ 28.1 million) of investment by the Ivorian government and its technical and financial partners contributed to achieving REDD+ objectives.
The challenge now for the government is to leverage the existing “grey” flows to ensure that they continue to support agricultural production and the Ivorian economy without contributing to further deforestation and forest degradation. At the same time, the overall envelope of finance needs to be increased to meet the shortfall in domestic finance to help the Ivorian government meets its objective of increasing forest cover to 20% by 2030. For international donors, this means applying more rigorous safeguards in the implementation of agricultural support programs, and supporting forest restoration activities. The Ivorian government in turn needs to improve the enabling environment for deforestation-free agriculture through stricter policies and enforcement of land tenure and zoning. While the study was unable to quantify private finance flows, domestic private actors such as the Coffee and Cocoa Council (CCC), and other industry collectives supporting the palm oil and rubber sectors also play an important role in domestic finance. To the extent possible, these actors should be included in Côte d'Ivoire’s attempts to “green” land use finance and provide a more level playing field for the government in meeting its environmental goals.
About the authors:
Charlie Parker - Independent Land Use Consultant;
Angela Falconer - Associate Director, Climate Policy Initiative;
Adeline Dontenville - REDD Expert, EU REDD Facility;
Jean Paul Aka - National Expert in REDD+, SEP REDD;
Danae Maniatis - REDD+ Technical Specialist, UNDP;
Marc Daubrey - CEO, Impactum