Overview World Bank Group Forest Action Plan FY16–20 April 2016 Focusing on Sustainable Forestry and Forest-Smart Interventions Introduction Through the Forest Action Plan FY16-20, the World Bank Group aims to boost the potential of forests to lift people out of poverty and generate lasting social, economic, and environmental returns in our client countries. It supports countries to define development pathways that take the importance of ­ their forest capital into account. It builds on and strengthens the World Bank Group’s 2002 Forest Strategy (Sustaining Forests: A Development Strategy) and identifies two focus areas for our engagement for the next five years: sustainable forest management and forest-smart interventions in other sectors. These two focus areas are supported by three themes that aim to strengthen the foundations for positive forest out- comes: climate change and resilience, rights and participation, and institutions and governance. Forests and Sustainable Development growth—along with rapid urbanization and As the world warms and its population grows, changes in consumption patterns in middle-­ forests and trees stand at the intersection of income countries—is ­ expected to sharply in- many decisive challenges: sustaining agricul- crease the demand for food, fiber, energy, and ture; reducing the impact of droughts, floods, minerals that often drive large-scale land use and storms; regulating water and climate; changes at the cost of forest and tree cover. protecting infrastructure; providing timber, Because threats to forests are manifold paper, and energy; and housing critical biodi- and often interdependent, addressing them versity. Some of the world’s most vulnerable requires a coordinated multi-sectoral ap- people live in or near forests. Actions taken to proach. This approach should ensure that enhance the governance and sustainable activities in other sectors such as agricul- management of forests contribute directly to ture, transport, ­mining, or hydropower are developing opportunities and protecting eco- undertaken in ways that limit negative im- system services that benefit the poorest. pacts on forest integrity while maximizing Globally, forests remain under significant development benefits. threat. Although the pace of global de- To address the global forest challenge, forestation has slowed since the 1990s, it forests need to ­ become an integral part of still affects an area larger than Costa Rica national development agendas and better each year. Deforestation, forest degradation, recognized for the many opportunities they and land use change c ­ ontribute about offer. Globally, about 2 billion hectares of 12 percent of the world’s greenhouse gas degraded forest land could be restored to emissions, eroding the capacity of forests functional, productive ecosystems that to store carbon and slow climate change. help fight climate change. Pressures on forests are likely to continue Sustainable forest management also calls for the next several decades. Population for enhancing community involvement in 1 decision-making processes related to the use forests. Supporting ­ forest-smart interven- of forests, increasing investments in planted tions will not only ensure that adverse im- forests, working in partnership with the pri- pacts on forests and their biodiversity are vate sector to make their business models avoided or minimized, but also identify oppor- forest-smart, and strengthening forest gov- tunities for increasing the productivity and ernance to foster responsible investments resilience of other sectors. (For example there and combat illegal logging. are enormous opportunities tied to agrofor- estry for agriculture, forest-based watershed The WBG Contribution to the Forest management for hydropower and clean water, Agenda or mangrove protection for flood control.) The 2002 WBG Forest Strategy continues to These two focus areas are supported by frame the institution’s work in the forest sec- three themes that aim to strengthen the tor and remains very robust. It is organized foundations for positive forest outcomes: cli- around three interconnected pillars. Bank mate change and resilience, rights and partic- support should: ipation, and institutions and governance. (1) harness the potential of forests to reduce Implementation poverty in a sustainable manner, The FAP outlines a number of ways in which (2) integrate forests effectively into sustain- the WBG will deliver on the forest agenda able economic development, over the next five years. (3) and protect the vital local and global envi- Upstream assessments. We aim to ensure ronmental services and values of forests. that investments in other sectors are under- The preparation of the Forest Action Plan taken in a forest-smart way. To do this, inter- (FAP) for the next five years was guided by an ventions in forests and other economic sectors in-depth assessment of the WBG forest port- will be guided by comprehensive and robust in- folio over the FY02-15 period, as well as a de- formation on potential trade-offs for forests tailed analysis of emerging client demands. It as well as opportunities for restoration. The focuses on two areas: World Bank’s Systematic Country Diagnostic (SCD) and Country Partnership Framework Focus Area 1: Sustainable Forestry (CPF) instruments offer useful platforms to Forests in many developing countries sup- identify the challenges and opportunities re- port the livelihoods of hundreds of millions lated to forests in a strategic and integrated of people, mostly the poor and vulnerable, manner. To support this effort, Country Forest who are often remote from market Notes (and subnational Notes as appropriate) opportunities. will be prepared for priority countries and will The FAP aims to support investments in present an ­upstream analysis of threats to for- sustainable forestry with a particular focus ests in individual countries or regions, as well on optimizing the potential of natural forests as opportunities for socioeconomic growth in to provide cash and non-cash income and to the forest sector. The notes will aim to inform generate jobs and economic opportunities for ­ SCDs and CPFs. forest-dependent people. It supports tree Programmatic approach. The operational planting and plantations to respond to grow- centerpiece of the FAP is a more program- ing demand for timber, fiber, and fuelwood matic approach that strategically positions while reducing pressures on natural forests. the WBG to support countries willing to pur- It also supports investments in rehabilitating sue a forest-smart development trajectory. degraded lands and promotes sustainable It is based on four features: a country-owned value chains through small and medium-size program, an appropriate mix of financial in- forest enterprises and responsible invest- struments, a cohesive financial architecture, ments in forests. and long-term engagement. A programmatic approach will take into Focus Area 2: Forest-Smart account the specific forest challenges and Interventions in Other Economic opportunities that a country has identified. Sectors It will support country-owned strategies The WBG aims to support its clients’ pur- that seek synergies and minimize trade-offs forest-smart development trajec- suit of a ­ between interacting land uses (including ag- tory through an integrated landscape riculture, energy, transportation, extractives, approach. This approach clarifies the dy- ecosystem services, and biodiversity). This namics between various land uses, including will be piloted in selected countries where 2 Tap the potential of forests and trees to contribute to the WBG goals of ending extreme poverty and boosting shared prosperity in a sustainable manner Rationale for WBG Engagement WBG Approach Focus Area 1: Sustainable Forestry In many developing countries, forests support the The FAP aims to ensure that investments in the livelihoods of hundreds of millions of people, mostly forestry sector protect and optimize the use of forests the poor and vulnerable, who are remote from (both natural and planted) to sustain livelihoods and market opportunities. Beyond sustaining livelihoods, create jobs and economic opportunities in rural areas. sustainably managed forests also offer opportunities Together, the entities of the WBG are able to foster to lift people out of poverty where alternatives do not wealth generation and employment opportunities exist. Even in the most advanced economies, some along forest-sector value chains: the World Bank can pockets of poverty remain in forested areas. help establish investment environments conducive to At the same time, population growth and associated small and medium forest enterprises as well as large- changes in consumption patterns are increasing scale investors; the International Finance Corporation demand for forest products (wood-based energy, can partner with responsible private sector investors construction, poles, etc.) and placing more pressure on to expand investment in plantations, enterprises, natural forests. Responding to the growing demand and value chains; and the Multilateral Investment while preserving natural forests is an enormous Guarantee Agency can mitigate potential risks challenge. associated with investments in the forestry sector. Potential Interventions under Focus Area 1 Protect and optimize the management of natural Encourage sustainable plantations and tree planting, forests, through: through: • Participatory forest management • Responsible investments in large-scale commercial • Sustainable management of production forests reforestation • Sustainable production of Non-Timber Forest • Smallholder plantations and tree planting Products Support sustainable forest value chains, through: • Forest biodiversity protection • Small and Medium Forest Enterprises • Nature-based tourism • Private investments in forest value chains • Payment for Ecosystem Services Focus Area 2: Forest-Smart Interventions in Other Economic Sectors Increasing demands for food, fiber, fuel, and minerals The WBG aims to promote interventions in other often drive large-scale land use changes at the cost of sectors (such as agriculture, hydropower, extractives, forest and tree cover. and transport) that are “forest-smart” and that Addressing pressures on forests requires an consider avoiding or minimizing their potential integrated landscape approach, which provides the adverse impact on forests. To do so, the WBG will organizing principle for investing in and managing land, aim to support clients to promote growth that does based on rational spatial planning and socioeconomic not come at the expense of their natural assets, considerations. Forests and trees can also sustain, particularly forests, and that properly values and through the provision of ecosystem services, economic recognizes the contribution of forest services to sectors such as agriculture, energy, and transport. economies. For such an approach to work, decisions on The WBG organizational structure, based on development trajectories need to be informed by sectoral Global Practices and Cross-Cutting Solution comprehensive, ex-ante, and robust information Areas, can enable effective delivery of multi-sectoral on potential trade-offs for forests, as well as solutions tailored to country-specific needs. opportunities for restoration. Potential Interventions under Focus Area 2 Support informed decision making on land uses by: Deliver on forest-smart operations in sectors, such as: • Introducing forest considerations as a key element • Agriculture and Water of the Sustainable Development agenda • Infrastructure (Transport, Dams and Hydropower, • Promoting land-use planning as a key tool for that etc.) purpose • Energy • Extractive Industries the WBG has significant involvement in the achieving results, report on these, and eval- ­forest sector. uate impacts of forest-relevant interven- Results and impacts. Strengthening the tions and (ii) supporting client countries’ monitoring and reporting of the perfor- efforts in building robust systems to monitor mance of the WBG forestry portfolio will and report on the status of their forests. help build a strong evidence base on results Knowledge base. Knowledge generation from investments. The FAP supports actions (through analytical work and operations) and improving the capacity at two levels: (i) ­ dissemination will be a key focus area. The of the WBG to monitor progress toward Bank’s portfolio of forest-related analytical 3 Cross-Cutting Themes: Climate Change and Resilience, Rights and Participation, Institutions and Governance Climate Change and Resilience Through the climate change trust funds – the Forest Carbon Forests and their biodiversity play a crucial role Partnership Facility, the Forest Investment Program, and the in sustaining the planet’s balance. Forests are BioCarbon Fund, the WBG will continue working on innovative uniquely placed in the climate change agenda solutions for forest-based mitigation to climate change. as they can deliver on both mitigation and Additionally, more focus will be given to forests’ contribution adaptation: they have the capacity to store to the adaptation agenda and their contribution to resilient and sequester carbon as well as to provide ecosystems: through the landscape approach, the WBG will ecosystem services that enhance the resilience contribute to enhanced resilience of rural economies and of natural systems. societies, in particular to climate shocks. Rights and Participation The World Bank will support clients willing to clarify Clarification of rights related to access to forest access and user rights, improve land tenure (with a forests and use of forest products is critical, and special focus on the rights and roles of indigenous peoples yet the world’s most carbon-rich and biodiverse and forest-dependent communities), and modernize forests are often found in regions where land administration systems. In addition, the WBG has ownership is ill defined, contested, or insecure. established strong platforms that foster enhanced participation of various stakeholders. Institutions and Governance The WBG will support clients willing to strengthen their Good forest governance and strong institutions institutional capacity and adjust their policy/regulatory are core conditions for sustainably managed framework to sustainably manage their forests and forests so that current and future generations the interfaces with other economic sectors. Use of new can benefit from forests in the long term. technologies will be promoted. The WBG can help countries tackle the pernicious and widespread effects of illegal logging. and knowledge work will be aligned with the Partnerships. The WBG works with a wide focus areas identified in the FAP. Through proj- range of forest stakeholders and partners at ect cycle, performance and learning reviews of the country, regional and global levels. To sup- forest-related interventions, an operational port its new business model, the WBG will place knowledge base will be developed. This will be special emphasis on partnerships that can de- systematically captured and disseminated so liver operational support to client countries that it can inform project/program design, and through coordinated efforts. Platforms estab- help determine midcourse corrections if lished under the Forest Carbon Partnership appropriate. Facility and the Forest Investment Program Institutional and operational arrangements. (and its associated Dedicated Grant Mechanism The programmatic approach will seek to con- for Indigenous Peoples and Local Communities) solidate and streamline preparation and im- have deepened the Bank’s engagement with plementation processes of operations. The a variety of stakeholders involved in the WBG will also work with partners and donors ­ forest sector. Continuing dialogue and ex- to improve the effectiveness of forest-related change with civil society and other groups funds, to reduce transaction costs and in- will remain central to the implementation of crease impact. the FAP. © 2016 International Bank for Reconstruction and Development / The World Bank. Some rights reserved. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. This work is subject to a CC BY 3.0 IGO license (https://creativecommons.org/licenses/by/3.0/ igo). The World Bank does not necessarily own each component of the content. It is your responsibility to determine whether permission is needed for reuse and to obtain permission from the copyright owner. If you have questions, email pubrights@ worldbank.org. 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