Under the magnifying glass: Private sector commitment to climate protection

On 14th November 2017, in the context of the COP23, the Senate of the Economy together with the European Forest Institute and ForestFinest held a panel discussion on the private sector’s potential to contribute to climate protection. Prof. Dr. Dr. Franz-Josef Radermacher, president of the senate, gave an inspiring key-note speech on how to combat climate change and satisfy global needs at the same time and with that triggered a lively discussion with his fellow speakers. The speakers included EFI’s own Lukas Giessen, principal scientist on International Forest Governance, Anna Rösinger – director of We Forest and Dirk Walterspacher of ForestFinest Consulting. Dr. Christoph Brüssel, from the Senate of the Economy, moderated the discussion.

Palm oil plantation (photo by Tim Cadman)

Governing the forests: how fiscal instruments can act as a (dis)incentive to reducing emissions

In recent years, the concept of ‘governance’ rather than ‘government’ has become a popular term for describing the interactions between stakeholders in the sustainable development policy arena. In this context, especially in the arena of forest management, it is used to describe the structures and processes that steer, or co-ordinate the relations between multi-stakeholders (government, business, civil society). Usually, governance refers to human actors, but there are other forces that exercise influence over how forests are managed. One of the most important of all these, is that most essential resource: money. This brief report outlines the role that public finance, and most importantly the fiscal instruments developed by governments, can have a considerable influence over the fate of the world’s forests.

Research undertaken by the author in 2016-2017 investigated the extent to which fiscal incentives encouraged, or discouraged, private sector involvement in the United Nations Framework Convention on Climate Change (UNFCCC) initiative known as REDD+ (“Reducing emissions from deforestation and forest degradation and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”).

In Indonesia, REDD+ has been recognized as a potentially significant source of revenue, while at the same time providing an important incentive to contribute to reductions in global deforestation. However, in a series of interviews and surveys, forest-based business stakeholders identified a number of issues impacting on their ability to undertake activities that would lead to reducing deforestation and forest degradation, and emissions.