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Women in Jepara's teak forest area harvest ground nuts, Central Java, Indonesia, June, 2009. Photo: Murdani Usman / Center for International Forestry Research (CIFOR).
Women in Jepara's teak forest area harvest ground nuts, Central Java, Indonesia, June, 2009. Photo: Murdani Usman / Center for International Forestry Research (CIFOR).
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Local communities, not global financiers, are the best forest managers

Isaac Rojas / Friends of the Earth International

2nd November 2015

A new paradigm of forest conservation is gaining ground, writes Isaac Rojas: 'financialising' them and the climate and ecological services they provide to global investors. But this is a false solution - and one that excludes the local and indigenous forest communities who can truly be relied upon to sustain their sylvan heritage.

The financialization of nature provides a lifeline for continued corporate destruction despite the blatant and multiple ecological crises associated with it. It is a false solution that must be rejected.

Turning the tide on deforestation and climate change is a major and complex challenge: easy wins are not easy to find.

But as a key committee to the Convention on Biological Diversity meets in Montreal this week, it appears that economic technocrats believe they have found the answer - the financialisation of nature.

In the case of forests, this means turning them into financial assets whose value depends on, for example, the carbon they embody - as described in a new report by Friends of the Earth International.

This is in spite of the fact that there is no evidence that finacialising forests is a remotely effective strategy for forest conservation. Indeed it invariably alienates forest conservation from the indigenous and other forest dwelling peoples who are the forests' staunchest and most resilient defenders.

Financialising forests essentially means handing over rights in those forests to investors. In some cases that can lead to their total destruction as diverse natural ecosystems are converted to plantation monocultures.

In others, it can lead to indigenous forest peoples being prevented from sustainably harvesting the forest products on which they depend for food, shelter, clothing, medicines and ultimately, survival.

The first is case clearly more destructive than the second - but in both cases local communities are cut out of the equation, unable to participate in the management of their own forests, and alienated from their rightful heritage.

Giving control to local communities

The answer that works - and has been seen to work time after time all over the world - is to give (or give back) control over forests to the communities that have long sustained them.

As set out in a second FOEI report released today, Community Forest Management (CFM) is a way to describe a variety of practices for communal resource management, used by forest-dependent indigenous peoples and local communities around the world.

CFM is the best way for people and communities to benefit from forests and land without depleting natural resources or damaging the climate. An increasing body of research demonstrates that CFM is a robust, fair and impartial solution to deforestation, forest degradation, biodiversity loss and climate change.

A meta-analysis of published case studies covering 40 'Protected Areas' and 33 CFM experiences in Latin America, Africa and Asia found that as a whole the areas under CFM presented a lower annual deforestation rate than those under absolute protection regimes.

Video: The small community of Malaris in South Kalimantan, Indonesia, grow and harvest sustainably, a variety of crops, balancing a demand for forest products and conservation. Their traditional systems of forest governance work with nature, not against nature. Credit: FoEI and WALHI, FoE Indonesia.

Community Forest Management is a win-win policy, blending appropriate technology and ancestral knowledge. It decentralizes power and decision-making with respect to forests, resources and territories, protecting and strengthening communities' rights. In other words, it helps to deliver social and economic justice while protecting and preserving forests. CFM is a major opportunity for communities to exercise political control of their territories and resources.

But the benefits do not stop there. CFM can help diminish the effects of climate change by reducing deforestation. Forests absorb 2.6 billion tonnes of carbon dioxide each year! That's about a third of all the carbon dioxide released from burning fossil fuels.

Forests can also provide protection against extreme weather events, which will become more frequent with a changing climate. It also has important positive outcomes in terms of soil erosion and consequent flooding, and as a means of protecting water resources.

Sounds good. So what's the problem?

Industrial forestry practices have devastated our forests. The costs to people and their well being have been enormous.

When governmental decision-makers seek solutions to biodiversity loss and climate change they too often listen to the wrong people. Many of the solutions they roll out and advocate pose a direct threat to CFM. Some approaches, such as the Protected Areas approach employed in the Convention on Biological Diversity (CBD), often result in the exclusion of communities from their territories.

And then there's the money. Questions about how to fund biodiversity conservation have led too many governmental decision makers to advance what we call the financialization of nature.

Financialisation of nature is a complex trend, which sees nature being redefined and carved up into component parts to create products, both real and abstract, for purposes of financial trading. Supposedly these approaches help nature by providing profit-based incentives to protect it.

For instance 'Reducing Emissions from Deforestation Forest Degradation' (REDD), which is ostensibly designed to protect forests, but more often than not sees forest peoples losing access to their lands and their rights. Similarly, pollution or biodiversity offsetting - the idea that damage caused in one place is remedied by paying for protection of an area in another place - too often ends up providing a license for businesses to pollute or destroy nature.

Proponents of these 'green growth' policies suggest that financialization can protect the planet's living conditions and perpetuate economic growth. In reality, financialization deepens ecological problems while making the rich richer and the poor poorer.

Arguments about turning nature into a commodity are at least as old as John Locke's work. Concerns have existed for centuries that reducing nature to a mere good or service robs it of its priceless and interconnected qualities and reduces indigenous peoples and communities living closely with nature to little more than protected species.

Financialization goes even further. Just as finance is outside of the real economy, so too does financialization remove nature from its, well, natural context.

Another form of 'enclosure' by global finance

'Green growth' redefines 'green', not 'growth'. Labeling a huge area of primary forest a reserve which can be used for recreation is problematic enough. When you take this rationale a step further and label the same chunk of forest an 'ecosystem service' - a unit of nature that can be traded to offset pollution or compensate for biodiversity loss in another part of the world - a redefinition takes place, separating nature from its dynamic interactions and reducing it to static and rather abstract divisible units.

Proponents also claim that nature's value only becomes apparent when it is measured in monetary terms. Yet where moral or legal restrictions are in place to prevent damage to nature, financialization's thirst for divisible units of nature makes it all too easy to circumvent these restrictions.

Pollution in Indonesia, for instance, may be possible on the basis that the polluter has paid to protect an 'equivalent unit' of nature in another country. Ironically, far from making nature's value more visible, financialization provides a very 'green' fig leaf to allow polluters to keep polluting.

For peoples and communities caught in financialization's path, the reality is that they see the places of their stories and memories, their solace and often their livelihood, pulled out from under them on the the promise that it will be restored elsewhere.

Financialization takes power away from communities and local people by transferring rights to land and nature to people and businesses that are often located a great distance away and almost never directly affected by the trading of the natural 'unit' in question.

We must ditch the false solutions

Peoples and communities who are affected are often short changed by transnational companies who come to them with contracts dense with legal jargon. While companies or even governments often promise jobs, infrastructure improvements or profit sharing, the reality for many communities has been displacement, ghettoization and unemployment.

The financialization of nature provides a lifeline for continued corporate destruction despite the blatant and multiple ecological crises associated with it. From an ecological justice perspective, it is a false solution and must be rejected. It is essential to raise awareness about the grave risks associated with it, and about the win-win solution of Community Forest Management.

Turning the tide on climate change and deforestation is possible. We only need to implement real solutions and stop the false ones.


The reports:

Isaac Rojas
is co-ordinator of the forest and biodiversity programme at Friends of the Earth International.


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