How do we work?
NICFI’s overall goal is to contribute to the reduction and reversal of tropical forest loss to enable a stable climate, preserved biodiversity and sustainable development. To succeed, we must forge a new relationship between humans and nature. We need to transform the world’s food system and the global trade of commodities.
With international support, tropical forest countries must improve the use of their lands and build a prosperous rural economy without deforestation. Meanwhile, global commodity markets that currently drive deforestation must support their efforts by increasing demand for sustainable products.
NICFI can only succeed as part of a global movement that brings together governments, businesses, indigenous peoples and civil society. Our mandate is to be ambitious and take calculated risks. Not all partnerships will succeed, but the portfolio as a whole will deliver breakthroughs.
To reduce forest destruction while increasing production of food and commodities and meet national development goals, developing forest countries are enacting important reforms to improve land use governance. The good news is that most forest countries have significant potential for improved land management by making available areas outside of forests for new investments and by increasing yields on existing farms. Deforestation is rarely in the national or even local societal interest.
NICFI is perhaps most known for its large results-based bilateral partnership with the key forest countries, where we disburse payments for reduced deforestation verified by satellite imagery. The lion’s share of our budget, diplomatic effort and human resources continue to go to such partnerships. Paying for results reduces the risk to Norwegian taxpayers – we only pay where we have a successful and committed partner. It is also targeted at the key result, and less politically intrusive, ensuring the ownership and sovereignty of our partner country. Beyond results-based partnerships, NICFI also supports capacity building efforts and improved land use policies through multilateral channels and civil society partners.
Indigenous peoples have made five simple and sensible requests from the international community:
1. Stop killing us
2. Recognize our land rights
3. Involve us in decisions that affect us, on the basis of our free, prior and informed consent
4. Give us direct access to climate finance
5. Make use of our traditional knowledge in the fight against climate change
Protecting the rights and livelihoods of indigenous peoples and local communities as well as environmental human rights defenders is a question of social justice and human rights. It also tends to be a very effective way to preserve forests. Evidence shows that indigenous people can often be the best guardians of the forests, as their light-touch livelihoods are well attuned to the precarious nature of rainforest ecosystems. Environmental human rights defenders risk their lives to stand up against the forces of deforestation. Their fight should be our common fight.
Beyond support to government efforts to protect indigenous rights and livelihoods, NICFI works to give indigenous peoples a voice in the international community, in the global climate negotiations and at the national and local level. Specifically we support:
- Programs to secure land rights and tenure rights for indigenous peoples and local communities in partner countries
- Indigenous Peoples’ active participation in global climate talks and other multilateral environmental fora
- The participation of indigenous peoples and local communities in national policy processes and in decisions that affect them, such as Nationally Determined Contributions to the Paris Agreement
While reducing forest destruction is in the national interest of forest countries, international support can help them do more, faster. Reduced emissions are also a global good. Mobilizing large-scale climate finance for reduced deforestation has therefore been a key priority for NICFI since the beginning in 2008.
The concept of “REDD+” – international payments for reduced forest destruction – was included in the UN climate agreement from 2010, and later through the “Warsaw framework for REDD+”. In 2015 it was thoroughly highlighted in the Paris Agreement. Yet so far, the international community has failed to mobilize carbon markets and other sources that could provide an effective incentive to forest countries. This must change.
After reaching agreement on the broad norms for forest carbon payments through the UN and piloting such payments bilaterally and multilaterally through the World Bank, the time is now ripe for standardization and scale. Scale can come from new regulated carbon markets such as that for international aviation, or from voluntary carbon purchasing programs from companies taking on “science based” or carbon neutrality targets. For this to help rather than hurt and distract efforts of forest countries, however, it needs to be done according to the highest environmental and social standards.
To this end, NICFI helped support the launch of two important new initiatives in 2019:
- The Architecture for REDD+ Transactions (ART), which will certify high-integrity emission reductions from forest countries and jurisdictions.
- Emergent, a forest finance facility that will facilitate transactions in credits certified by ART between private carbon buyers and forest countries. To help stimulate demand and supply Emergent will seek payment guarantees from donors.
Sunlight is the best disinfectant. Most forest destruction starts with a crime. Forest areas have historically been ‘white places on the map’, far from the attention of central authorities or the media. Where governments have had surveillance capacity, enforcement efforts have struggled to reach beyond the poor person with the chainsaw and reach the kingpins behind investing in the operations. Companies committed to buying deforestation-free commodities have not been able to determine who supplied their supplier. Investors and banks have lacked the tools to determine the deforestation risks of their portfolios, and to act on them.
NICFI will continue to invest heavily in new technology and transparency solutions:
- Biophysical – knowing where forest destruction occurs:
- Global Forest Watch, which provides free access to satellite pictures showing changes in tree cover in near real time.
- FAO’s SEPAL program, which helps forest countries use satellite data
- A forthcoming global purchase of high-resolution satellite imagery for up to USD 50 million per year in 2020-22. The images will be made freely available to everyone.
- Ownership – knowing who owns the land/concession:
- Various efforts with governments and civil society to promote transparency around forest concessions and determine the ultimate beneficial ownership of the concessions.
- Commercial – who buys from whom:
- Finance – knowing who finances whom:
- TRASE Finance
Just as a consumer would not be happy having 30% of his or her food produced by slaves, consumers around the world are increasingly expecting that their products are completely free of rainforest destruction. Eliminating deforestation from commodity supply chains will require determined and consistent market signals from consumer good companies and commodity traders, combined with public land use policies that enable sufficient growth in production outside of forests.
The 2010 pledge of the Consumer Goods Forum to help eliminate deforestation from beef, soy, palm oil and pulp and paper by 2020 was a breakthrough.
In the New York Declaration on Forest in 2014, companies, governments and civils society pledged to work together. Supply chain action has delivered important successes such as the Amazon soy moratorium and the significant reduction in deforestation from oil palm in Indonesia. Some companies are putting pressure on suppliers to meet their goals. Overall, however, progress has been too slow.
- Supporting on-the-ground efforts to facilitate deforestation free landscapes
- Providing blended risk capital to demonstrate deforestation-free business models
- Promoting dialogue between supply chain actors through the Tropical Forest Alliance
- Supporting civil society strategies to keep companies to account
Today, it is hard to invest your savings or pensions in the global stock market without contributing to deforestation. With the exception of important front-runners, global finance has not taken sufficient account of the environmental and financial risks associated with deforestation. Even committed financiers have lacked access to credible and standardized data to be able to address deforestation risk.
Overall, the risk of forest destruction has not been understood as a material financial risk. But in a low carbon future, a license to clear intact rainforests should be considered a ‘stranded asset’ similar to a new coal plant that would not be profitable in a policy environment conducive with the Paris Agreement.
- Support development of standardized data useable for investors
- Promote voluntary forest risk disclosures through CDP
- Create awareness of forest risk as a material financial risk
- Support the efforts of the Task Force of Climate Related Financial Disclosures (TCFD) to raise the profile of forest related financial risks
- Support civil society strategies to hold financial actors accountable for deforestation
- Build capacity of local banks in key forest countries
Illegal logging and trade in tropical timber is one of the world´s most lucrative criminal industries. The perpetrators – typically large, trans-national criminal networks – are involved in crimes such as corruption, money laundering and tax evasion, as well as violations of the rights of indigenous and local communities. They undermine governance, rights and entire economies.
Fighting forest crime is primarily the responsibility of forest country governments, and we support their efforts directly through bilateral partnerships. However, it should also be addressed by the markets where timber and timber products are processed and sold. Increased collaboration among enforcement agencies of producer and consuming countries can enhance national efforts.
Transparency and public access to information about concessions, land ownership and financial flows are vital for bringing these crimes into the public light. Civil society plays an important role in exposing and reporting on corruption and illegalities in the forest sector.
- Through bilateral partnerships support forest countries’ monitoring and law enforcement efforts to address illegal forest destruction
- Detect and act on international forest crimes in collaboration with the UN Office on Drugs and Crime
- Promote international collaboration between law enforcement agencies through support to Interpol
- Support civil society to provide transparency and accountability as well as new technologies to trace legality of forest products