Volume 1, Issue 2 Innovative Financing for SFM March 2004 Economic Incentives for SFM and Landscape Restoration A Workshop Summary Forests are lost because conservation and sustainable management is less profitable then deforestation, at least in the short-term. Payments for environmental services - such as watershed management, carbon storage, and biodiversity conservation - can alter this equation and make standing forests more profitable. Various mechanisms to generate payments for such services are emerging, from public payment systems to user rights and new trading schemes. Several cases of practical experience with payments for environemtal services now exist and provide insights as to how such markets might function. CONTENTS underlying concepts of forest landscape Global Forest Trends: representing local, regional and national restoration; methodologies for economic An Overview.............................1 I n this context, some 140 participants governmental authorities, international valuation of forests; and the role of governments in promoting incentives for SFM. Forest Landscape organizations, conservation NGOs, bilateral Restoration.................................2 donor agencies, academia, and the private sector gathered in Bogotá, Colombia, from Global Forest Trends: An Overview Capturing the Value of Environ- mental Services...........................2 January 28-30 to participate in a three-day The last decade has seen several workshop on incentives for sustainable forest transformations in the forest sector, with Experiences with Payments for management (SFM) and forest landscape changes in the structure of industry, forest Environmental Services..............4 restoration. The workshop also served to inform product markets, and forest ownership and Characteristics of Markets for the preparation of a new forest law for Colombia. governance. Forest protected areas have Environmental Services..............6 Workshop participants shared knowledge increased more than ten fold in the last fifty What is the Government's and experiences with payments for years and global forest protected areas now Role?...........................................6 environmental services and other incentives for amount to more than 1 billion hectares of forest. SFM and forest landscape restoration through However, many of these protected areas do not Tools for Valuation of Forest receive adequate funding for their management. Services .....................................6 presentations and discussion on related case studies in Colombia and elsewhere in Latin As a result, illegal activities are carried out in New Directions for Colombia....7 America. More specifically, the workshop many protected areas. Resources for Additional considered how to derive value from forest Within the timber industry there is a Information.................................8 ecosystem services; mechanisms for obtaining tremendous shift to production in tropical and payments for environmental services; the sub-tropical countries driven by plantations. Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 2 Plantations now constitute 35% of global timber · Second, ownership of environmental INCENTIVES FOR SFM production and projections suggest that by goods and services must be defined in a manner 2020, 50% of timber may come from plantations. that fosters market confidence; There are a number of obstacles Conventional wisdom holds that plantations · Third, governments have a role in that can impede SFM, such as will take the pressure off of natural forests. protecting and encouraging nascent markets; institutional, legal, political and However, another possibility some fear is that macroeconomic instability, · Fourth, to meet the goal of poverty unclear land tenure, illegal plantations will out compete natural forests, reduction, small producers must have access to logging, insufficient making natural forests less valuable. This would market opportunities. infrastructure, more profitable increase the economic incentive to convert land use alternatives, limited natural forests for other uses such as Forest Landscape Restoration market access for forest agriculture, and push small-scale, indigenous, products, excessive bureaucracy Forest landscape restoration is an approach in the forest sector, and lack of and low-income producers out of the market. to land use management that is complementary access to financing. The Forest industry consolidation is another to and allied with payments for environmental following are some incentives to strong trend. Today only 10 companies are help overcome these obstacles services. Forest landscape restoration brings responsible for processing roughly 20% of the and foster SFM: people together to identify and put in place a world's wood production and the top 100 mix of land-use practices that will help restore · Fiscal incentives for SFM companies process 50% of the world's the functions of forests across a whole include appropriate levels of industrial wood. Perhaps the most important taxes, tariffs, subsidies, and landscape to deliver the goods and services trend in forest usage is China's growing accelerated depreciation rates that people and societies need. A restored for equipment and machinery demand for timber and timber imports. China is forest landscape might consist of areas that are to encourage good expected to dominate global timber markets in protected for biodiversity conservation and management practices and the next two decades. watershed management, as well as productive responsible infestment. Across the globe there is a clear shift from a use areas such as sustainably managed forests · Financial incentives include strict regulatory command and control and farm lands, with the potential for generating investment funds, approach to market-based incentives, payments for environmental services, and other compensation for certain transparency and greater participation of civil investments, payments or innovative sources of funding such as creation society and other stakeholders. Who owns and premiums, tradable permits of alternative livelihoods. manages the global forest estate is also or licenses, and differed or Forest landscape restoration is not the conditional payments. changing. Local ownership and control over reestablishment of pristine forests, but rather forests is on the rise.At present, 25% of tropical · Incentives for private forests the restoration of forest functions and the forests are managed by local communities and and plantations could include building of assets for the future. Restoration exemption from agrarian this figure could double in the next 15 years. activities include planted forests for timber and reforms, absolute land rights, A new set of environmental services are fuelwood, conservation areas, natural reimbursement for certain entering the market, shifting the way we view, regeneration, agroforestry and on farm trees. investments, and access to value and manage our forest resources. The low interest loans. Benefits from restoration can include revenue examples of environmental services yielding generation, alternative livelihood sources, · For forest concessions, SFM improved profits are increasing. Payment for biodiversity conservation, job creation, soil can be encouraged by long- maintenance of water flows and quality has term rights of 40 years or maintenance, watershed protection, and the created local markets in several places. more (subject to performance establishment of recreation and tourism Additionally, there is significant potential for standards), the capacity to opportunities. An example of such benefits is sublease, reimbursement for forest carbon markets to grow. in Chiapas, Mexico, where planted forests certain investments, and tax A recent analysis by Forest Trends suggests contribute to livelihoods through fruit, medical incentives. that in some cases these environmental services plants and fuelwood, as well as the selling of will produce more value than traditional timber, carbon offsets (worth US$180,000 in 2002). and in most cases these environmental services Forest landscape restoration is also aligned will add significant additional revenue to well with several multilateral environmental managed timber operations. However, effective agreements and bodies, including the markets must be established to capture this Convention on Biological Diversity, potential. To this end, there are a number of International Tropical Timber Organization basic pre-conditions that make markets for (Restoration Guidelines), the UN Framework environmental services possible: · Convention on Climate Change and the Kyoto First, environmental services must be Protocol, and the United Nations Forum on clearly defined to create a product or service of Forests. The Global Partnership on Forest value to a buyer; Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 3 Landscape Restoration, comprised of some 20 institutional preconditions make the payments FORESTS AND THE CDM international organizations, governments, and possible? NGOs, aims to link local action to With the Kyoto Protocol yet to CARBON enter into force, the market for implementation of international commitments. In The market for forest carbon fixing and green certified emission reductions early 2005, the partnership will host a major house gas mitigation services is global, with (CERs) remains unclear. At workshop on restoration. demand driven by the Kyoto Protocol, national present, the main market emission reduction policies, and the opportunities that exist for Capturing the Value of Environmental CERs are in Japan, Canada and opportunities for individual offset purchases. Services niche markets in the US. In This market is developing rapidly and December 2003, Parties to the The characteristics of markets for forest multimillion dollar deals have been negotiated Framework Convention on environmental services vary depending on the for the provision of carbon sequestration or Climate Change reached carbon emission reductions (CERs). agreement on the modalities for service provided. The following describes including afforestation and market characteristics for water, carbon The global nature of the market has both reforestation activities in the sequestration, and biodiversity conservation. advantages and disadvantages. On the one Kyoto Protocol's Clean hand, carbon-related services provided in very WATER Development Mechanism remote rural areas can be sold to buyers in large, (CDM). Most notably, Forests can influence the quantity and urban, and highly-developed markets. On the negotiators dealt with the issue quality of water flow, and thus provide of the permance of CERs from extremely valuable services for water other hand, the global nature of the carbon forests by requiring five yearly consumers, irrigation systems, hydroelectric markets can put small holders at a significant verification that carbon remains power generation facilities, fisheries disadvantage as buyers can take their business sequestered. They also agreed to to places where transaction costs, country risks, create two types of CERs for maintenance, and more. In the past, such and prices are lower. Given this, some level of forest projects, either services have either not been valued, or largely temporary certified emission undervalued. intermediation is essential to enable small reductions (tCERs) valid for a In most cases, markets for water services landholders living in remote rural areas, where five-year period, or long-term tend to be localized. In the short-run, payments most forests and opportunities for forest CERs (lCERs) valid for a restoration are located, to participate in such twenty-year period, with both for water-related services are likely to be specific markets. types of CERs elgible for one-off deals whereby specific users pay renewal for up to 60 years. At specific producers for water-related services of The World Bank has served such a role present, the European carbon a specific forest. The potential for such through its various carbon funds. The latest of exchange does not plan to trade payments is good in locations where there is these funds, the BioCarbon Fund (BCF), will CERs from forests. However, soon be operational, and through a "learning by this could change in the future. high demand for water resource and the benefits to the buyers of the service are clear. In the doing" approach will help to identify how land long-run, the process will probably mean use, land-use change and forestry activities can creating broader markets for such services. generate high-quality CERs with environmental In general, there are four stages to designing and livelihood benefits that can be measured, and implementing a system of payments for monitored and certified. water services: BIODIVERSITY 1. Identify and quantify water services: In the case of biodiversity conservation, the Which services are generated in a given market is somewhere between local and global, location? How much is the service worth? making the identification of beneficiaries willing 2. Identify key beneficiaries and charge them to pay for the services extremely difficult. At for water services: Who should pay? What fee? present, buyers of this environmental service How should the funds yielded be managed? include bilateral donor agencies, the Global 3. Develop payment systems that work: How Environment Facility, and NGOs such as are payments to be made to achieve the desired Conservation International (CI). However, the change in land use sustainability? resources available through this pool of buyers 4. Address political economy and falls short of the funds needed to finance institutional issues: Who are the winners and biodiversity conservation. losers, and how can the resulting political economy implications be addressed? What Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 4 Experiences and Lessons Learned with Payments for Environmental Services and Forest Landscape Restoration MEXICO'SFORESTFUND In Mexico, forest conversion for agriculture and cattle grazing Anumber of lessons were learned in establishing Quito's water has resulted in the second fastest deforestation rate in Latin fund. First, it is important to be clear that payments are for water America and the sixth deforestation rate globally. Investment in the protection, not water consumption. Second, from one market forest sector is severely limited by the lack of access to financial location to the next, the socioeconomic context and thus the costs resources; industrial forests only receive 1.5% of the value of the and benefits of water services, who provides them and who is sector. willing to pay for them and how much, will vary. Third, water is a In July 2003, a forest fund was established to promote the political topic, and the view that water is a `right' must be broadened conservation, sustainable use and restoration of forests, and the so that it is also seen as a `good'that must be paid for.As the Quito development of mechanisms for payments for environmental case demonstrates, there is a willingness to pay for water services. services. The fund aims to reduce bothpoverty and deforestation. Fourth, payments for water services can raise awareness and help So far, the fund has initiated payments for hydrological services. contribute to institution building for environmental management. Forest lands that are located in areas that supply water to more Fifth, payments for such environmental services should be than 5,000 people, and that do not exceed an area of 4,000 hectares promoted as a source of income for rural communities, but the are eligible for such payments. Contracts have been issued for a potential impact of such payments on communities should be period of five years with the possibility of being renewed. Service considered. providers are paid annually based on results verified through inventories from satellite imagery. Obligations of the service INTEGRATEDSILVOPASTORALLANDUSE providers include maintaining the land use, prohibiting An integrated approach to silvopastoral land management deforestation or deterioration, supporting monitoring and provides an opportunity for farmers to diversify their income evaluation, and reporting any noncompliance. through provision of environmental services such as biodiversity To date, 126,818 hectares are included in the program, with annual conservation, watershed management and carbon sequestration. payments of approximately $350 Mexican pesos (US$38 ) per The "Bundling" of these different services can yield adequate hectare. In 2004, one aim for the fund is to include 150,000 more incentive and funding for land use change. hectares in payments for hydrological services, benefiting some A network of partners, including the International Center for 30,000 inhabitants in forest areas. There also plans to use the fund TropicalAgriculture (CIAT), the Center for Research on Sustainable to develop markets for biodiversity conservation and carbon Agriculture Production Systems (CIPAV), and the Tropical sequestration. By 2006, the goal is to have 600,000 hectares Agricultural and Higher Education Center (CATIE), is working to receiving payments for environmental services. develop incentives to encourage the adoption of such systems in Colombia, Costa Rica and Nicaragua. AWATERFUNDFORQUITO In Colombia, a project for integrated land management is In 2000, a water fund was established to protect Quito's water underway in Valle del Cauca and Quindío in the LaVieja river basin. supply from the Condor Bioreserve. The Nature Conservancy and Payments for carbon sequestration and biodiversity conservation the Quito Municipal Sewage and Water Agency (EMAAP-Q) have been offered to interested farmers. Payments are then issued financed the initial costs of establishing the fund. To date, the fund to farmers based on results verified through satellite monitoring, has received US$1,450,000 from contributions made on a regular and also through changes in biodiversity assessed by indicators basis from the potable water company (1% of monthly water sales), such as bird populations. The project also includes empowerment the energy company (US$135,000 per year), and the Andean and capacity building, training, technical assistance, environmental brewery company (US$6,000 per year). The fund has financed education, and youth involvement to encourage long-term adoption projects related to clarification of land rights, valuation of of the approach. environmental services, sustainable production systems, education and training, supervision and control, and monitoring and follow- up activities. Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 5 COLOMBIA'SGREENPLAN COLOMBIA'SFORESTRYINCENTIVECERTIFICATES(FIC): The Green Plan was developed to address degradation and loss THERIOMAGDALENAFORESTPROGRAM of ecosystems and biodiversity as a result of deforestation, Since 1993, the Rio Magdalena forest program has been desertification and encroachment from agriculture and illegal crops implementing FIC and other incentives for forest restoration and on forest lands. Funded by the Inter-American Development Bank, protection. The program, funded by the German government and the plan supported regeneration of critical degraded forests to implemented by the National Federation of Coffee Growers of provide hydrological services for municipalities. The plan has Colombia (FEDERA-CAFE), was developed to address erosion, established 70,218 hectares of forests, created 18,102 jobs, and decreased quantity and quality of water, and decreasing access to improved the livelihood of some 33,000 families. wood. The plan's success is largely credited to broad participation in Landholders participating in the FIC were given five year project planning and implementation. Local communities, NGOs, contracts to plant forests. In the first year of the contract they regional environmental authorities, departments and a municipality received 75% of the costs for planting native tree species and 50% both implemented and (in part) funded the project, increasing the of the cost for non-native species. In the subsequent years they sense of ownership and commitment to the project. A monitoring received 50% of the cost of maintaining these trees.As of December and evaluation process is in place, however, quantifying the 31, 2003, the program had established 11,559 hectares of forest, qualitative social and environmental benefits is a challenge. increased the profitability of agroforestry systems by between 7.4 Lessons from the Green Plan include that the following are key to and 19.8 percent, and generated more than 4,000 jobs. success: stakeholder involvement in the design of incentives; a The incentive also helped to change perceptions about the value clear idea of the land-use objectives to be achieved; cross-sectoral of forests and to promote SFM as a long-term source of income. cooperation; and monitoring of incentives' effectiveness. The project's success can be attributed to an attractive incentive, guaranteed over time, that effectively engaged interest and participation. Technical assistance, follow-up and monitoring also PROCUENCAPROJECT:WATERSHEDRESTORATIONANDASSESSMENTOFTHE contributed to the successful outcomes. POTENTIALFORFORESTFINANCETHROUGHTHEKYOTOPROTOCOL'SCLEAN DEVELOPMENTMECHANISM Manizales, a city in the Rio Chinchina basin in western Colombia, CREATIONOFABIOLOGICALCORRIDORBETWEENBARBASANDBREMEN initiated the ProCuenca Project to reforest and restore the watershed The Alexander von Humboldt Institute is working to establish a through diverse funding sources, including a local water-use fee. biological corridor between the Barbas and Bremen forests in The project encompasses land under various uses, including coffee, Quindío, Colombia. The Barbas and Bremen forests are areas rich potato and cattle production, and aims to create a biological corridor in biodiversity, including 199 bird species, more than 400 types of to connect fragmented forests in productive use areas. Restoration, trees and shrubs and endangered species. They are the water reforestation, water flow regulation, biodiversity conservation, and source for eight municipalities. The establishment of the biological employment are benefits of the project. corridor is part of the Institute's ongoing effort to develop tools to An assessment was carried out to determine the project's improve biodiversity conservation in productive forest areas. potential to generate additional income from carbon fixing services. Actors involved in the project include regional environmental Using computer modeling, various scenarios for establishing authorities, the local community and municipal government of biological corridors and the associated potential to generate CERs Filandia, wood companies, and farm owners. were mapped out. The findings from the assessment were that while So far, the area of the corridor has been demarcated and closed the project meets the eligibility and additionality requirements of off, and native tree species that meet conservation needs are being the CDM, a CDM project in reforestation is not financially viable regenerated to restore the deforested areas. Agreements have been at present. For the project to pay off, the price for CERs must be developed between regional institutions with regard to generating US$7 or more, (assuming interest rates of 10%). information and helping to develop coservation tools. To In the next ten years, ProCuenca is expected to plant some 15,000 strengthen local community participation in the project, a hectares of forest with a carbon capture of more than 4.6 gigatons. communication strategy was put in place to inform local populations The scale of the project will most likely yield lower transaction costs, about the benefits and purpose of the project. In the future, the making it more cost effective. Institute hopes to establish a new protected area including Bremen, Barbas and Cestillal. It is also working to establish management tools for watersheds and to monitor the impact of biological corridors. Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 6 Characteristics of Markets for Environmental providing a sound legal and institutional structure, governments can encourage long- TRADING SO2IN THE US Services term private sector investment, assure financing In 1990, the US government Beyond one-off deals for the payment of opportunities for responsible commercial amended its Clean Air Act, forest environmental services, the buying and operations, and create an atmosphere of creating a market in sulfur selling of these services can become a national, confidence conducive to the development of dioxide (SO2), one of the sub-national, or global market. Markets can be world's first environmental markets for environmental services. described as regular meetings between sellers markets. The law set out that Non-governmental stakeholders, including by 2010 the US would reduce and buyers of goods and services, wherein industry, financial institutions, NGOs, academia, emissions of sulfur dioxide to regularity of the meetings is essential. The and media, are increasingly influencing policy 10 million tons below 1980 provision of carbon sequestration and making. Governments can encourage levels, and required SO2emitters regulation is already becoming such a market. to have permits for each ton of stakeholder participation in SFM by providing To date, there are three types of SO2they released into the consultative mechanisms. Stakeholder atmosphere. Tradable permits environmental markets: a market of rights such participation could also help governments were issued to large-scale as the "cap-and-trade" markets (e.g. the global address issues such as illegal logging, through emitters based on historic carbon emissions market and the US SO2 implementation of local forest management emissions, creating a new form emissions market); a market of responsibility of property right, and a market solutions and partnerships to monitor and wherein an environmental objective is was born. combat illegal logging. determined by government and tradable Governments can also foster intersectoral The US SO2market highlights responsibilities for meeting that objective are cooperation for land-use planning through the the roles of governments and allocated to all relevant actors (e.g. the market markets in addressing establishment of intersectoral institutions or for tradable renewable energy credits in Texas); environmental problems. The other mechanisms. In countries where forest government regulated a public and a market for environmental risk (such a management has been decentralized, the good, set limits on its use, and market does not yet exist, although the weather various levels of government must coordinate generated the property rights derivatives market may be indicative of things SFM between the local and national levels. that enabled a market to work. to come). The market then allocated the Unfortunately, people in forest areas are Given that one can only sell that which is ability to emit efficiently and often marginalized and do not receive adequate determined the lowest price at owned, property rights protected by a strong services from the government in support of which the desired emissions governance structure and established legal SFM. Additionally, in some instances, policies reductions could be achieved.A institutions are necessary for markets to and incentives intended to promote SFM are similar process is underway function effectively. Market confidence, with the creation of global not used, indicating problems with their design. competition, transparent information (on carbon markets as a result of the To avoid such ineffective measures, incentives Kyoto Protocol. players, prices, bids, offers, goods and must be evaluated and reviewed for their services) are fundamental to market operation. effectiveness on an ongoing basis. How to distribute rights is a key question in the creation of any environmental market: Tools for Valuation of Forest Services should they be given to the existing users (or "grandfathered"), as was done with the SO2 The collective value of multiple forest market in the US?; or distributed to society on services and uses, such as ecotourism, water a more equitable basis?Additionally, secondary management, pharmaceutical products, food effects such as increased costs of goods and products and recreation, can make a strong services to consumers (e.g. for water, electricity, argument for SFM and raise awareness of the housing and paper) must be considered to costs of deforestation. However, the value of avoid undesirable or unforeseen outcomes. these services must first be articulated. To this end, there is a need to develop institutional and What is the Government's Role? technical capacity for valuation. IUCN's South America office recently In general, the government's role in the forest published "Tools for the EconomicValuation for sector is to regulate the use and management SFM" to help raise awareness of valuation of forest resources. To encourage SFM, methodologies, and economic, social, governments can provide services such as institutional and regulatory incentives for awareness raising about criteria and indicators SFM.The publication outlines how valuation for SFM, technical assistance, research and methods can be used to design appropriate extension services, and the sharing of incentives for SFM tailored to local conditions knowledge and information related to SFM. By and political circumstances. Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 7 New Directions for Colombia · Evaluate the inconsistencies, contradictions CONSERVATION CONCESSIONS Based on the presentations and discussions and complementarities of existing forest- Conservation concessions pay at the workshop, participants developed a related incentives; forest owners a fee to number of recommendations for Colombia's · Assure long-term financing for existing compensate for potential earnings ongoing forest law revision process. Overall, economic incentives such as the FIC; from uses other than · Assess the demand for environmental conservation. In economic terms, the importance of coordinating policies and services and develop procedures and they are a way of internalizing laws for land use planning across sectors was the conservation value of forests. emphasized along with the need for monitoring institutions to foster confidence in such to inform and improve policy and management markets; Conservation International (CI) is · Create an atmosphere of confidence to currently piloting conservation decisions. encourage the development of markets for concessions in several countries: Recommendations put forward relate to Bolivia, Ecuador, Peru, Mexico, forest restoration, sustainable management and environmental services wherein transactions Solomon Islands, and Papua New conservation of natural forests, payments for are reliable, and the quality of services Guinea. Such agreements are environmental services, and economic and non- provided can be verified; generally long-term with periodic · Incorporate the concept of payments for evaluation to guarantee that the economic incentives for SFM. These environmental services and development of conservation service is being recommendations were shared with the provided. For example, in Peru, Colombian Government as input to the forest markets for such services into the law; CI holds 40-year conservation law reform process. · Develop mechanisms to make markets concession agreements that are accessible and to provide transparent and evaluated every five years and accessible market information; renewed if they are in RECOMMENDATIONS · Incorporate the concept of forest landscape compliance. · Assure forest legislation is compatible with restoration and incentives for restoration Conservation concessions are national laws on land use, ownership and activities into the law, and promote more rapid than PAs, and yield planning; understanding and awareness of its benefits; greater accountability because · Align policies in other sectors which impact payments are results based. They and forests with national, regional and local forest provide a direct way to put a real · Strengthen education, awareness raising, value on the goods and services policy objectives; research, and technical assistance, especially provided by forests. · Conduct the forest law revision process in a for small holders. transparent and participatory manner with stakeholder consultations over a period of between six and twelve months, and involve stakeholders in formulating, implementing and follow up on the forest law; · Promote awareness of experiences with forest valuation, payments for environmental services and market creation, as well as of their potential to improve rural populations' well-being and to internalize the cost of SFM; · Increase national and regional initiatives and incentives for forest landscape or ecosystem restoration as such measures are essential to enable payments for environmental services; · Promote the replication of successful national and regional experiences with forest landscape restoration in degraded areas to restore environmental services; · Incorporate follow-up and evaluation processes into policy instruments, risk management, and decision making processes; Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info Economic Incentives for SFM and Landscape Restoration Volume 1, Issue 2 8 Resources for Additional Information PUBLICATIONS Costa Rica's National Forest Fund: http:// Bayon, Ricardo. "Making Environmental www.fonafifo.com/paginas/fonafifo.htm Markets Work." 2003. Paper produced for Forest Trends: http://www.forest-trends.org Forest Trends. http://www.forest-trends.org Food and Agriculture Organization Forestry McMillian, John. 2003. Reinventing the ACKNOWLEDGMENTS Department: http://www.fao.org/forestry Bazaar: A Natural History of Markets. Global Partnership on Forest Landscape The workshop on Economic NewYork, NewYork: Norton. Incentives for SFM and Land Izko, Xavier and Diego Burneo. 2003. Tools Restoration: http://www.unep-wcmc.org/ Restoration was organized by for the Economic Valuation for Sustain- forest/restoration/globalpartnership the Colombian Ministry of able Forest Management. Quito, Ecuador: IUCN: http://www.iucn.org Environment, Housing and IUCN Development (MAVDT), ITTO: http://www.itto.or.jp Conservation International- Pagiola, Stefano, Joshua Bishop and Colombia, Forest Trends, IUCN Natasha Landell-Mills. 2002. Selling Katoomba Group: and PROFOR, with funding Payments for Environmental Services: http://www.katoombagroup.org from PROFOR. This briefing Market-based Mechanisms for Conserva- Mesoamericano Biological Corridor: note was written by Laura Ivers tion and Development. London: Earthscan. (PROFOR) based on http://www.biomeso.net presentations and discussions Andy White andAlejandra Martin. 2002. Mexico's Project for the Conservation and that took place at the "Who Owns the World's Forests?" http:// Sustainable Management of Forest workshop. Acknowledgements www.forest-trends.org/resources/pdf/ are due to (in alphabetical Resources: http://www.conafor.gob.mx/ tenurereport_whoowns.pdf> order):AngelaAndrade (CI- programas_nacionales_forestales/procymaf/ United States Environmental Protection Colombia, and Vice Chair of the Program on Forests (PROFOR): IUCN Ecosystem Management Agency. November 1999. "Progress Report Commission), Fabio Arjona (CI- on the EPAAcid Rain Program." http:// http://www.profor.info Colombia), Ricardo Bayon www.epa.gov/airmarkets/progress/ World Bank Group Forests and Forestry (Katoomba Group), Thomas arpreport/acidrainprogress.pdf. http://www.worldbank.org/forests Black (CAEMA), Jill Blockhus (PROFOR), Ignacio Bustos (FAO), David Camargo (CI- INTERNETRESOURCES Colombia), Ramón Carrillo Alexander von Humboldt Institute: (PROCYMAF), David Cassells http://www.humboldt.org.co (World Bank), Marta Echavarriá (EcoDecisión), Rubén Guerrero Asocars (La Asociación de Corporaciones (MAVDT), Rubén Guevara Autónomas Regionales de Desarrollo (ITTO), Víctor Gutiérrez Sostenible): http://www.asocars.org.co (Carbono y Bosques), Raúl Jaime Hernández (Federacafé) Carbon Finance at the World Bank: Michael Jenkins (Forest http://www.carbonfinance.org Trends), Fabio Lozano (Alexander von Humboldt CATIE - TropicalAgriculture Research and Institute), Alvaro Luna Higher Education Center: (IUCN), Gommert Mes http://www.catie.ac.cr (FONAFIFO), Gunars Platais (World Bank), Dick Rice (CI), Center for International Forestry Research Stefano Pagiola (World Bank), (CIFOR): http://www.cifor.org Carol Reed (World Bank), CIPAV Foundation:http://www.cipav.org.co Carole Saint-Laurent (IUCN), Nicolás Zea (Colombia's CI-Colombia: National Forest Plan), and http://www.conservation.org.co Patricia Zurita (CI). Colombian Ministry of Environment, Housing The workshop agenda, and Development (MAVDT): presentations, participants list http://www.minambiente.gov.co and follow-up updates are available at: http:// Conservation International (CI): www.conservation.org.co http://www.conservation.org Program on Forests (PROFOR) 1818 H Street NW Washington DC 20433 email:profor@worldbank.org The World Bank tel: +1 (202) 473-2396 fax: +1 (202) 522-1142 http://www.profor.info