Millions of South Americans have been lifted out of poverty by the commodity boom during the last decade. This uplifting economic development also prompted a rush for cropland and oil, among others, that has accelerated deforestation across the region.
The 20th century saw one of the biggest ecological disasters with Brazil losing more forest each year than any other country. A report by campaig groups states that due to over-exploitation of the Amazon region, rainfall will be expected to decrease by 20% over the Amazon basin, a heavily populated area covering large chunks of Brazil, Bolivia, Paraguay, Uruguay and Argentina.
It is estimated that deforestation accounts for up to 20 % of carbon emissions globally, making it one of the main drivers of climate change. Deforestation doesn’t just threaten our climate: as many as 1.6 billion people, the majority consisting of the rural poor, depend extensively on forest ecosystems for their livelihood and their survival. Latin America is presently estimated to have more than 200 million hectares of degraded land and nearly 50% of all greenhouse gas emissions in Latin America are a result of forestry, land-use change, or agriculture.
Governments finally gearing up to protect forests…
Luckily governments are finally setting a faster pace for action: at last year’s COP20 in Lima, eight Latin American countries pledged to reforest 20 million hectares of land. The pledge, better known as the Bonn challenge, is part of a global initiative to plant enough trees to save over one billion tonnes of carbon dioxide annually. Colombia and Mexico have taken action by submitting data on the status of their greenhouse gas emission reductions in the forest sector. This data creates an international basis to establish a “forest reference emission level” for these countries. The reference levels in turn set up benchmarks to evaluate the performance of countries in the implementation of REDD+ activities (Reducing Emissions from Deforestation and Forest Degradation).
Actions on REDD+ help in measuring and quantifying forestry protection: they establish a financial value for keeping carbon stored in forests and reducing emissions from land-use changes by using a results-based approach. The results-based approach offered by REDD+ could lead to interesting investment opportunities for the private sector, and international climate finance could reward investors for protecting forests and creating alternative livelihoods for local populations.
…while private players increasingly worry about clean supply chains
The importance of curbing deforestation has also reached the radar of the private sector: food and beverage giant Mars recently announced it would aim at reducing deforestation in its South American beef and soy supply chains by the end of 2017. Investing in emissions reduction projects along the corporate supply chain is gaining traction among companies that are pushed by consumers and investors to deliver deforestation free products. If left unmanaged, deforestation in the supply chain can lead to unstable supplies of commodities, loss of finance from investors and decreased brand value and market share. Facing an increasingly serious risk of water shortage, Super Cerdo, a leading company in the Colombian pork industry, decided to act and to re-plant trees on degraded lands upstream close to one of their piggery facilities near Medellín City. In addition to this, the project is also conserving the remaining natural vegetation.
Projects to protect and re-grow forests are also being launched on a voluntary basis. In Colombia South Pole Group has partnered with Forestal San José in a large reforestation and conservation project. The project area of 4800 hectares in Antioquia and Córdoba has previously been exposed to extensive cattle grazing activity, and has suffered negative impacts of gold mining. The polyculture project consists of planting 25 different native species adapted to soil conditions and selected according to local biodiversity and conservation needs, including highly endangered species from the IUCN red list such as Magnolia silvioi.
Moving closer towards climate talks in Paris, realizing the goal of zero deforestation by 2020 requires ambitious domestic and international forest policies. The international community must also enforce a coherent framework to reduce greenhouse gas emissions from deforestation and provide funding mechanism to protect tropical forests and transition to a more sustainable economy.
One could agree with distinguished Peruvian agronomist Marc J. Dourojeanni, who says that 2014 may turn out to have been a good year for the world’s forests after all: while a global political deal on climate change is still a challenge, let alone having a clear understanding of the role of the private sector, countries such as Mexico, Costa Rica and Chile are already moving ahead with laws that are putting a price on carbon, which will ultimately increase the attractiveness of low-carbon investments.
The pledges taken by Latin American countries are significant and represent an important driver of interest and attention. The next step is verified, results-based action. This is where leveraging climate finance and existing responsible forestry can offer key solutions.
The World Economic Forum on Latin America 2015 takes place in Riviera Maya, Mexico, from 6-8 May.
Author: Renat Heuberger, CEO South Pole Group
Image: A view is seen from the Amazon Tall Tower Observatory (ATTO) in Sao Sebastiao do Uatuma in the middle of the Amazon forest in Amazonas state January 8, 2015. REUTERS/Bruno Kelly