Posted on September, 21 2023

When it comes to responsible forestry, we ‘can’t see the wood for the trees’. This common idiom in British English, first used in 1546 by the poet John Heywood, means ‘being unable to understand the whole situation clearly because you are too involved in it’. The word ‘wood’ (or plural, ‘woods’) here refers to a small forest, but today it’s far more likely that wood – as a product – would be given the higher worth in the proverb: our economic system currently values only the timber in a forest. It’s now vital that we take a step back from business-as-usual forestry and see the bigger picture – towards a system that values everything a forest has to offer.

More than half (54%) of the world’s forests are managed either wholly or partly for production. Many of these forests are managed unsustainably or are prone to degradation, which often leads to deforestation and conversion to other land uses.

Sustainable forest management has led to considerable improvements in the way we regard and treat our production forests. Positive examples include improved inclusion in forest management decision-making processes, more set-aside areas alongside production units, and reduced levels of forest degradation in harvested forests – for instance through the implementation of reduced impact logging in tropical and pan-tropical forests. 

Progress towards an increase in sustainable forest management globally has been supported by the widespread presence of enabling frameworks and certification systems. However, such progress has been uneven, and the rate of forest loss is accelerating in tropical low-income countries where coverage by forest management plans remains low and forest certification insignificant.

Market failure

The sad truth of our time is that forest finance systems and harmful subsidies ensure that it is often more profitable to convert forests to other land uses (such as agriculture) than it is to manage them for preservation (e.g. through community or sustainable forest management). Furthermore, the production costs for certified operations are much higher than those that operate uncertified or informally [see graph]. On top of this, there are few price premiums paid; everyone wants FSC-certified products, but no one wants to pay the real cost.

Today, only about 13% of the world’s forests are certified. If we want sustainable forest management and certification thereof to be a viable option for the majority of forests managed globally, we need to work on strengthening the business case for sustainable forest management.

In order to incentivize the sustainable management of forest resources, a shift from a single-revenue approach to full-value forest management and stewardship is needed. Additional approaches include increasing access to markets, diversification of timber products, and expanding to non-timber forest products [see graph]. WWF’s work is also showing that payments for ecosystem services can be a viable approach to pursue, and helps improve the business case for those that manage their forest resources responsibly.
 

Nature’s invoice

Imagine nature were to send you or your business an invoice for all the goods and services that she provides. How, then, would these ‘ecosystem services’ – the benefits that people obtain from nature – be valued differently? Forests provide society with a wide range of benefits, from reliable flows of clean water to productive soil and carbon sequestration [see graphic]. In FSC-certified forests, valuable ecosystem services are protected and in 2018, FSC introduced a procedure to demonstrate and communicate the positive impact of responsible forest management on ecosystem services. It is also important to note that higher levels of ecosystem services are found in forests with more tree species.
 
By verifying these positive impacts, the FSC Ecosystem Services certification aims to facilitate payments for ecosystem services and provide access to other benefits. This aims to ensure that those who responsibly manage forests and those who take action to preserve forest ecosystem services get the increased business value they deserve.

For example, an FSC-certified forest concession can also provide biodiversity protection and emission reductions – but how can these services be brought to market? In the Republic of Congo, WWF is working with a forest concessionaire, Interholco, through its signature corporate engagement programme for forests, Forests Forward, to diversify its streams of income underpinning the sustainable management of its FSC-certified forests. Interholco was recently granted FSC Ecosystem Services certification for biodiversity based on vast populations of great apes and forest elephants effectively protected within the concession, and maintaining forest integrity. Now, the company is seeking sponsors to increase biodiversity protection measures.

Interholco’s forest concession is also being managed according to reduced impact logging (RIL) principles and emission reductions are being assessed. The company aims to generate credits on the basis of the reductions realized and bring those to market. Payments for these services combined with the traditional business model (timber) will help companies such as these to serve as new models for multifunctional forest management.

Ecotourism can also be connected to sustainable forest management. In Maramures, Romania, WWF is working on a pilot project with the Strâmbu Bãiut Forest Directorate in a unique biodiverse mosaic landscape that includes a Natura 2000 site and UNESCO primeval forest – home to some of the largest populations of large carnivores in Europe. Together with local communities, they aim to better protect these areas and are exploring a payment for ecosystem services scheme to fund this conservation. The Forests Directorate received FSC Ecosystem Services certification for Recreation and Biodiversity services in late 2022 – a first for the country with great potential.

To increase the business case for sustainable forest management and improve local livelihoods, a local entity has been set up comprising local community groups, the Forest Directorate and WWF to develop ecotourism in the region. The same entity is seeking investments to improve wildlife protection and promote human and wildlife coexistence, which will also help create local employment.

The future of payments for ecosystem services (PES)

Ecosystem services represent a topic of growing interest to companies, including through a biodiversity lens. Increasingly, companies are becoming aware that simple tree planting is insufficient to claim effective restoration of forest ecosystems, recognizing that forestry projects must go beyond ‘business as usual’ to secure all the co-benefits that only a multifaceted project can provide. As such, WWF believes that payments for ecosystem services (PES) – including the support of concrete actions for the management and improvement of a forest’s biodiversity and other services – is a viable pathway to enabling sustainable forest management at scale. 
We note that transitions to full-value sustainable forest management practices for our global forests are also going to be dependent on the full implementation of land tenure rights for the Indigenous Peoples and local communities whose practices are associated with better outcomes for forests across the tropics.
 
We can’t just capitalize on one ecosystem service, either; forests are multifunctional and provide so much more than wood or fixing carbon. So we also need to find ways of securing value for all of the ecosystem services forests offer. As with the examples above, WWF will continue to test and prove this concept with the aim of increasing the value of standing forests. 

The American English version of the idiom is ‘can’t see the forest for the trees’. For our systems to value more than the wood in the trees in a forest, we’re going to need to go beyond understanding the whole situation – to action. To take this work to scale, the following needs to be addressed:
 

• Creating new funding opportunities – Today the PES market mainly focuses on carbon projects. Funding from the private sector may increase if the PES market demonstrates more innovative and multifaceted projects that generate greater and more diverse benefits, particularly for biodiversity and carbon services. A better connection between the supply of payments and the supply of multiservice projects can occur in different ways, such as through a call for projects, the creation of a dedicated fund or market mechanisms (e.g. biodiversity credits), and others.
• Capacity building – There is genuine interest in the subject of carbon and biodiversity among companies, but to capitalize on this better education is needed on the role of ecosystem services and how to quantify and value them. For forest PES projects to be credible and risk-free, training must be provided to foresters and financiers. Those willing to set up PES initiatives must rely on financiers who understand the political, technical and financial benefits of the tool, plus forestry actors who understand the requirements of this new source of financing. Many FSC-certified forest managers have shown an interest in the Ecosystem Services procedure; some are already engaged and building experience.
• PES toolboxes – The development of practical tools is needed to guide foresters on establishing projects that guarantee a benefit to the funder/buyer, to market projects, to calculate a payment on solid bases (additionality, validated methodologies), and to monitor and evaluate the benefits in a credible way.

This blog is adapted from a feature in the upcoming WWF Forest Pathways Report, which will be published on 24 October 2023.