This is a response to the World Bank note on which Kuensel wrote a story headlined “Forestry sector underutilized, says World Bank report” (July 25, 2019).
The report referred to is The Bhutan Forest Note by the Environment and Natural Resources Global Practice, South Asia Region of the World Bank.
The objective of the note as stated, is: “A forward-looking business case for Bhutan to support an increase in forest utilization without jeopardizing the integrity of forest and non-forest ecosystems.”
The main concern of the note is that even though we have vast forest cover, only 5 percent of our forests are under commercial management. Forestry contributes only 2 percent to the GDP.
The goal, obviously, is to use more forests and increase contribution to GDP by increasing timber harvesting volumes.
However, the note also recognizes several challenges:
“Drivers of deforestation and forest degradation.” There is no clear understanding of the causes and type of degradation and loss. For instance the note refers to a study by the Department of Forests and Park Services in 2017, which shows:
About 392,683 hectares of forests were gained in a 15-year period (2000-2015), while around
74,445 hectares were lost, resulting in a net change or increase of 12 percent at an annual rate of 0.8 percent and 667,680 hectares of forests experienced degradation.
To a lay perspective this is a net loss or forest degradation of 349,442 hectares, and better understanding is required in terms of loss of carbon sequestration and loss of biodiversity due to this degradation. Robust scientific data is essential to have a clear understanding of this phenomenon.
The authors themselves also admit “Incidences of illegal logging and fuel wood collection are also undermining forest productivity, but data to determine the magnitude of losses are currently not available.”
Other factors not understood are impacts of livestock grazing on forest degradation. Impacts of forest fires, land use conflicts with agriculture, and deforestation owing to infrastructure development are also not clearly understood.
Other challenges the report identifies are Bhutan’s vulnerability to climate change and natural disasters, underdeveloped wood and non-wood industries, and challenging policy and institutional environment.
Within this challenging context the note sees several opportunities to increase harvesting volumes to increase GDP contribution of the forestry sector.
This is the main bone of contention I have with the report, and although cutting more forest seems like an obvious and easy solution, it’s not the most expedient choice.
Firstly, the contribution forests make to the hydropower and tourism sector are not accounted for. The authors note that “Hydropower has contributed to rapid GDP growth…Tourism is the second largest contributor to Bhutan’s GDP.” I argue that both these sectors are highly dependent on the ecosystem services provided by our rich forests. GDP contribution of forests would be significantly higher if this service is accounted for.
Secondly, I would like to offer an alternative business case for our forest resources by treating forests as natural capital and as assets at par with built assets such as our hydropower plants.
This is done within the framework provided by the World Bank’s own Dr Karin Kemper, a Global Director of the Environment, Natural Resource and Blue Economy Global Practice Group, the same group which authored the Bhutan Forest Note.
A blog written by Dr. Kemper and posted on the World Bank blog site on May 19, 2019 called “Five Ways to Help Nature Help Us” is most relevant for our present purpose. Dr.Kemper writes:
“On paper, cutting down a forest might raise GDP but the permanent losses in ecosystem services are not counted. So far, only a handful of countries are fully able to treat their natural capital as an asset at par with their built asset, such as infrastructure, and their financial capital…The World bank is supporting countries to capture the full contribution of natural capital through the Global Program for Sustainability”
At this juncture, Bhutan has not been able to treat our forests as an asset at par with our built assets. In this context, the Bank’s expertise and knowledge is called on to realize our forest wealth as financial capital. Another World Bank report exploring interventions along this line would be highly appreciated rather than the recommendation to cut more forests.
Another prudent advice from Dr. Kemper is:
“Mismanagement of natural resources can be controlled by fiscal or market instruments such as carbon or pollution permit trading.”
Forest management could be optimized and efficiently managed to meet all our timber needs if fiscal incentives through carbon trading becomes real. As a country, we would have more incentives to invest in the latest state of the art technologies, forest protection measures, and policy changes to derive the most from our forests.
Dr Kemper also writes: “Paying for biodiversity makes economic sense…Cash flow constraints – that is, finding the money now to benefit us in the future –can be overcome through innovative finance. A decade ago, the World Bank’s first Green Bond created the blueprint for what is today a US$500+ billion market.”
Even if Bhutan can be a small player in the Green Bond market, our forests GDP potential can be fully realized. The Bank’s leadership and support in spearheading this for our forest capital would be most innovative and welcome.
A highly acclaimed recent study published in the journal Science by scientists in Switzerland shows that planting 1 trillion trees globally is the most effective way to fight climate change. The study estimates that 750 billion metric tonnes of carbon dioxide can be removed from the atmosphere by this action. This is the equivalent to removing carbon pollution from the past 25 years.
We have the unique opportunity to be ahead of this curve by not cutting down more forests. In 2015, Bhutan set the Guinness World Record for most trees planted in an hour. Perhaps, with the help of the World Bank, it’s time to get real rewards for not only this but for the farsighted leadership from the Throne which has gifted Bhutan with extraordinary forest wealth.
Tashi Wangchuk (Ph.D)