Stephen Rumsey – Closing Keynote: Financing sustainable landscapes

Chairman of Permain Global, Stephen Rumsey, delivers a keynote speech at the closing plenary on the second day of the Global Landscapes Forum 2014, in Lima, Peru, during COP20.

Sunday, 7 December 2014

Global Landscapes Forum, Lima, Peru

#COP20GLF #ThinkLandscape

Stephen Rumsey – Closing Keynote- Financing sustainable landscapes (Transcript)

SR:                      [0:00] My background is a very, very long career as a financial analyst, and also very considerable involvement with environmental conservation for many decades – particularly restoration ecology. Now, a friend of mine, a successful hedge fund manager, once said, I don’t know much about climate change but what I noticed is the news always gets worse. So this tends to be a subject with moving targets, and the major point that we need with regard to finance is that we need to define what we should be trying to finance before we can successfully finance it.

[0:41] Now, most people who have looked seriously at climate change believe that the prognosis for our planet and humanity is rather bad. Way beyond anything to which we could conceivably adapt. But we believe that there’s a solution which has been overlooked, and is both achievable and easily affordable. I’ve been very involved with NGOs most of my life, and I passionately support many of them – particularly in the development world. But unfortunately, only one per cent of global income goes to philanthropy. And only one per cent of philanthropy goes to the environment. This isn’t enough to confront the greatest challenge humanity ever had to confront. So we decided to try to create a private sector solution to provide sufficient financial capital for the work that we believed needed to be done.

[1:33] From our perspective, there are two major problems for the atmosphere – the annual increase in greenhouse gases and the fact there’s already too much in the atmosphere. I focus on the second of these, which is less well covered in the debate. Arguably, there’s an excess of about 120 parts per million of CO2, which is equivalent to about 250 billion tons of carbon too much in the atmosphere. So I’d like to talk about what we could do to address this problem of excess CO2. And the three points that I’d like to make, and I shall give you explanations of why I believe these to be true. The level of degradation, the second D of REDD+, of the natural environment – the level of degradation, especially in forests, is enormously greater than is widely understood. If we were to change our behavior towards forests and the natural environment, the forests would recover. And in the process, they would draw down very considerable amounts of atmospheric CO2. And this could be achieved at scale, and the cost is a tiny fraction of most other forms of climate change mitigation.

[2:43] So we have 15 billion hectares of land on this planet. Now, the world’s forests are estimated by the World Resources Institute to currently cover about 5.3 billion hectares. This is down from 7.4 billion, which is where we would be without the intervention of modern humanity. Of the current 5.3 billion, they estimate that 1.1 billion is intact, where the definition is that at least 50 per cent of the canopy remains. So, we can see that global forest ecosystems are extremely degraded. If we want to get to 280 parts per million, we need to take 250 billion tons of carbon out of the atmosphere. If the forest land on average could additionally sequester 40 tons per hectare, and if non-forest land could on average sequester five tons, this would do the job. The ratio may be 35 and seven and a half, or 30 and 10, but you get my point. It’s absolutely essential that we do this. It’s absolutely critical.

[3:49] So why is this not widely understood? It should be a central part of our global strategy. I think this is in part because the focus of the REDD+ debate has been on deforestation, and not degradation. And this is largely because degradation has been very hard to measure. If we look at the FAO definition of the minimum threshold for land to be considered a forest, it requires that at least 10 per cent of the land should be covered with trees, and these should be at least five meters high. So in the context of a humid tropical forest, this would mean that 99 per cent of the biomass could be lost and it still wouldn’t count as deforestation.

[4:29] In our view, for most regions, the primary source of terrestrial emissions is degradation. And schemes that ignore degradation are not very useful. A natural forest can recover really quickly, particularly in the tropics. If you have a garden, just imagine what would happen if you left it alone for 30 years. So just imagine that at a global scale. It’s easy to understand how forests could recover globally because they are already so degraded. We need to devise methods to persuade the people who are doing the damage to stop doing it. Over the last decades, we – my colleagues and I – have been working to conserve large areas of habit for ecosystem recovery, usually to avoid species extinction, which we thought was one of the biggest problems.

[5:20] We need to utilize all of the best practice from environmental conservation to maximize carbon storage and sequestration. So, what role do commodity supply chains have in all of this? Well, if agricultural efficiency could improve at a faster rate than human population growth and demand, then agriculture does not seem to me to need to take more land to grow food. If the whole world was covered with oil palm plantations, the price of palm oil would be close to zero. We have a choice with regard to the utilization of non-agricultural land. Either we can recognize the potential for ecosystem recovery and organize policies to encourage large scale sequestration of carbon, or we can choose to continue to ignore it and maintain business as usual.

[6:13] If we accept that natural forests and other landscapes could provide this most value of ecosystem services, then how should we organize ourselves? Well, first, governments need to recognize that degradation is an extremely important component of REDD+. The degradation needs to be properly included in all REDD+ schemes. We need to build on the work of our brilliant scientists, who are developing much more accurate remote monitoring of carbon stocks, and therefore degradation. We should recognize that the practical work on the ground is best delivered by public-private partnerships. For effective implementation, we need private sector involvement. And most of the forest land is owned by governments. If we are wise, forests will be included in compliance cap and trade regimes sometime after 2020.

[7:06] In advance of that, we need to devise methods of providing finance to bridge the gap, and to encourage pilot projects that can show best practice. Most technologies have unintended consequences, but with avoided deforestation and natural recovery of forests, we have co-benefits. We can achieve watershed protection, biodiversity conservation. We can create huge numbers of jobs. And we can assist with the development goals that the people associated with forests, who are often the poorest five per cent of the world’s population. The point of all this is we need to get the definition right of what we want to finance, and then it won’t be difficult to finance it. Thank you very much.