IUFRO’s thought-provoking review of forest governance trends, and how to improve them

11 junho 2024

IUFRO’s thought-provoking review of forest governance trends, and how to improve them

In May 2024, the International Union of Forest Research Organisations (IUFRO), representing more than 600 scientific institutions active in forest research, published International Forest Governance: A critical review of trends, drawbacks, and new approaches. The report provides decision-makers with objective, accurate and relevant information, and thought-provoking insights on the ‘financialization’ of forest services. 

Sustainability is devalued, forest multifunctionality is neglected: It describes a snowballing trend of forest-related finance instruments to address climate and biodiversity crises, which compounds already complex international forest governance (IFG), and multiplies instruments (carbon credits, marketing forest carbon and other ecosystem services). This also ushers in actors and institutions whose primary motivation is not sustainability, but short-term economic gain. IUFRO give a Finnish example where exclusive focus on carbon distorts sustainability aims, resulting in damaging practices such as fertilisation, which threaten other functions like water purification.  

Forest-related finance broadly neglects the multifunctionality of forests, IUFRO finds. They draw particular attention to the risks and uncertainties that such finance holds for forest-dependent peoples and local communities, as they have no say in decisions that can negatively affect their homes and livelihoods. The forest-related finance sector has become more powerful and less accountable; influence is disproportionately concentrated among a small number of financial actors, such as asset managers and pension funds. They also point to concerns over reporting and disclosure practices, which can undermine credibility and increase the risk of greenwashing.  

Fern have witnessed this in the EU. For example, by endorsing unproven technologies, the Carbon Removal Certification Framework (CRCF) (FW 290) lends them an air of credibility. The CRCF not only fails to ban carbon-offsetting, despite the evidence of its futility, but monetises it, adding financial incentives to exaggerate and inflate climate benefits. Notably, carbon projects have been linked to land and human rights conflicts (FW 282).  

Eliminate harmful subsidies: IUFRO also states that “Green finance” discussions overlook various critical issues. Chief among these are perverse subsidies, “such as for biofuels and energy production that displace or damage native ecosystems.” It cites the United Nation’s 2023 State of Finance for Nature finding of the negative role of US$160 billion in public finance that incentivises logging and timber products beyond sustainable limits; far greater than amounts devoted to sustainability.   

Again, Fern sees this in the EU – e.g., when revising the Renewable Energy Directive, the EU did not eliminate the biofuels subsidies that drive burning wood for fuel. Other direct subsidies are handed out to forest managers to carry out activities that focus only on biomass production in a rotational system. Such subsidies undermine both the level playing field and continuous-cover forestry; they prevent many foresters, who would otherwise wish to, from going beyond business-as-usual forestry. In fact, the need to remove harmful existing subsidies was the unifying message that Fern recently heard from foresters restoring European forests in Finland, France, Ireland and Latvia. 

Radical change: IUFRO advocate a more “radical” transformation of the finance sector that addresses inequality, but also considers the broad call in relevant literature for reparations to “redress historical and present injustices” that harmed certain societies’ resilience, and advocates cancellation of “odious” debt. 

IUFRO concludes that community-led finance, which “emphasises a shift in power relations away from a business-as-usual of forest exploitation […] and that counters current financialization trends by favouring long-term investments over short-term profits, is perhaps the most promising avenue for change in the forest-finance landscape.”  

IUFRO also stresses the importance of transforming our consumption patterns: “A reduced consumption is perceived by diverse scholars as a prerequisite for an effective IFG”. This is especially relevant for the Northern Hemisphere, whose responsibility in forest governance is considerable, given its responsibility in the destruction of forests.

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Categorias: News, Forest Watch, European forests

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