UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 30-iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

ENVIRONMENTAL AUDIT COMMITTEE

 

 

REDUCING GREENHOUSE GAS EMISSIONS FROM DEFORESTATION

 

 

Tuesday 10 February 2009

BARRY GARDINER MP

Evidence heard in Public Questions 126 - 152

 

 

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Oral Evidence

Taken before the Environmental Audit Committee

on Tuesday 10 February 2009

Members present

Mr Tim Yeo, in the Chair

Mr Martin Caton

Colin Challen

Mr David Chaytor

Martin Horwood

Mark Lazarowicz

Jo Swinson

Dr Desmond Turner

Joan Walley

________________

Witness: Barry Gardiner, MP, Senior Commission Member, International Commission on Land Use Change and Ecosystems, GLOBE, gave evidence.

Q126 Chairman: Thank you very much for coming in. As you know, most of us have just done a trip to Cameroon, which is obviously familiar territory to you, and your praises were being sung by various of our interlocutors and advisers so we felt that we were following in very distinguished footsteps! I gather that Mr Johnson has lost his passport and so is unable to come this morning. I did not realise that we required passports to give evidence to this Committee! Could I start by asking you about the GLOBE initiative, the International Commission on Land Use Change and Ecosystems. Could you tell us a little bit about the background and what contribution you think it is going to make to the negotiations coming up?

Barry Gardiner: Can I do that in the form of an opening statement? Are you happy for me to do that?

Q127 Chairman: Of course.

Barry Gardiner: That would be great. Failure of ecosystems and biodiversity loss represent really a very small diminution of global GDP, probably about 0.5 per cent, but for 1.4 billion of the world's poorest people, it actually represents a much bigger loss, rising up to about 50 per cent of their GDP. I talk deliberately in terms of biodiversity loss/ecosystems failure rather than in terms of climate change, because for far too long the world has focused its attention on climate change. I want to emphasis that, in and of itself, a change in climate would not matter. The problem is that biodiversity cannot keep pace with the rate of change and, as a result, biodiversity is depleted, ecosystems break down, and it is that loss of biodiversity and the ecosystem services that they provide that is the real threat to human well-being. The economics of biodiversity and ecosystems is new. It is a difficult area for politicians, and I think we are struggling to identify the true nature of value as we broaden the concept of capital to include not just social and human capital, but to include natural capital as well. Today most of the benefits provided to our civilisation by ecosystem services simply bypass the market-place. They escape the pricing mechanism and they are lost to the political and economic process simply as an externality. It is this inability to capture the value of ecosystem services that I think is the acutest market failure in our world today. You would probably laugh if I told you that I have put off upgrading my mobile phone for the past 15 months because a little girl was stung by a jellyfish in Devon in 2007, but it is the growing demand for the latest mobile phone that has made coltan so valuable; that has fuelled the conflict in the DRC and in Central Africa; that has led to deforestation; that has seen habitat loss and reduction in forest mammals; that has meant an increased demand for fish as an alternative animal protein; that has seen the depletion of high trophic fish stocks; that has resulted in fishing down the food chain as fishermen target lower trophic species; that leads to blooms of jellyfish, which have replaced fish as the dominant planktipus, and that has resulted in the beaches in Devon being over-populated and invaded by jellyfish. If globalisation has enabled us to see ever greater connections between disparate events in different parts of the globe, then I think what I would want to say is that our institutional structures have not yet begun to recognise this. Governments around the globe still have mechanisms of intervention and engagement that have segregated and compartmentalised. We have a Department for Environment and a Department for International Development, when its clear that preserving our environment cannot be achieved without securing the development that will take two-thirds of the world's population out of poverty. We have a Treasury that understands over-leveraging of companies and credit bubbles but cannot see a connection with the world population consuming each year the resources that the planet takes one year and four months to renew or replace; a Treasury that refuses to put a value on ecosystem services and only sees value in the context of financial markets. So our institutional framework is not fit for the globalised connected world in which we live. It is fragmented into a pre-20th century set of compartments that reflect division and taxonomies that were scarcely adequate even then. What we need is a defrag programme for government. We must stop limiting our responses to the problems, we must stop thinking that each problem fits neatly into appropriate government departments, and we need to stop thinking in fragments and break down the barriers that stop us as legislators from arriving at comprehensive solutions. I believe that our work on land use and ecosystems within GLOBE forces us to do this because our research makes it clear that it is all of these issues that are inter-connected, and it exposes our world not as a series of complex fragments but as an integrated whole. To move directly to your question, the support of GEF and UNEP has been extraordinary in setting up the Commission. What we are seeking to do is to try and identify sets of policies that legislators around the world can agree upon that will actually give effect to the work that TEEB has already been carrying out and to where it is going. The TEEB work has been very important in looking at ecosystems as a whole and in then trying to place clear financial values on those ecosystems. Phase two of the TEEB report will be moving further into that domain. What we are trying to do is to get traction for legislative proposals amongst the G8+5 legislators, because that is the base through which GLOBE operates, around these issues, working with UNEP, with GEF and other agencies, and then trying to ensure that we can put forward a set of proposals which, ultimately, would be for presentation at the Japanese biodiversity conference in 2010 and which will be able to take those ideas and give them legislative form and bite.

Q128 Chairman: Arising directly out of that - and we will come on to some of the economic and practical challenges in a moment - what do you think are the main political obstacles to getting a successful mechanism to reduce emissions from deforestation?

Barry Gardiner: Engagement by treasuries. We are talking into a vacuum. I know many of you must be frustrated by the amount of work that is done by committees such as yourself and by government departments that is solely focused on environmental issues, and the difficulty is getting traction with treasuries. The difficulty is actually getting governments at that level and in those departments to recognise the financial implications of this.

Q129 Chairman: So the characteristics to which you referred are not just related to the British Treasury but to comparable departments in other countries?

Barry Gardiner: Absolutely. All across the globe people are failing to recognise the real cost of the environmental resources that they are consuming, or over-consuming. As I said, we recognise a credit bubble when we see one in financial markets, but to ignore it in the environmental scene is really an extraordinary form of blindness. We need engagement from chancellors and treasury ministers.

Q130 Dr Turner: Barry, talking of joined-upness, would you agree that we could do with a vastly improved scientific knowledge base in the management and understanding of rainforests? Do you think it rather sad in this context that DFID has actually progressively reduced its spend on R&D in the area of rainforests? Do you think this is counter-productive and would you wish to see that reversed, because it certainly seems to me that a better knowledge base would be a great advantage?

Barry Gardiner: I see where you are headed and I sympathise. I would want to say that the greatest thing that we lack is not knowledge here. You are right, there is a lot more that we can find out about the nexus of problems that are driving deforestation, and certainly about the way in which different small-scale ecosystems interact to create the whole major ecosystem of tropical rainforests. There is no doubt a limitless amount of new information that we could discover about that. However, it seems to me that for what we need to do we have probably enough knowledge. We know what the drivers of deforestation are. We know the ways in which we need to put alternatives in place. We know that we need to be increasing the productivity of other land. We know the sort of financial mechanisms that we could use in order to do it. I do share a concern that the number of posts within DFID that have been specialist forestry posts has been cut back. It seems to me, though, that what we really need is to focus on tackling the issues of deforestation and not simply more knowledge about how forests work. All of that is no doubt good, useful and helpful, but what we really need is an initiative that is driving the main event, and that is how do we tackle deforestation and the loss associated with it. For that I do think that we have got most of the knowledge that we need.

Q131 Dr Turner: You do not think there are issues surrounding, certainly from a climate change point of view and carbon sequestration point of view, the optimal management of the forestry that is left?

Barry Gardiner: Forest management is not a difficult thing. It has been done by tribal peoples around the globe in different continents for literally hundreds of thousands of years, successfully. If you want production forest, then of course there are sustainable regimes that you have to put in place, and you have to know first canopy growth, second canopy growth, et cetera, and exactly how you are going to structure your forest take for a production forest, but, again, these are things that I think are broadly known and well understood. As I say, it seems to me that the real issue is are we prepared to stop the loss that comes from deforestation? To do that, we do not need years more research; we need money, focus and policies.

Chairman: That leads us on I think, Colin, to you.

Q132 Colin Challen: Are you satisfied that a market mechanism is the correct way to approach this as opposed to a funded approach?

Barry Gardiner: No, Colin, I am not, I think we need both. I think one or the other will not be sufficient. If you look at the Eliasch Review, he was talking in terms of figures between I think it was $19 and $26 billion to halve deforestation by 2020, I think were his figures. I would say that if you look on the McKinsey cost curve modelling, where 30 per cent of the abatement potential is forestry, I reckon the best calculations are probably in the region of €60 to €75 billion a year. Therefore to simply say that we can get it all from the markets under cap-and-trade I do not think is realistic. I think we are going to need clear bilateral funds and multilateral funds from governments and government-to-government. We are going to need international financial institutions such as the World Bank and others that are doing it that way. And we are absolutely going to need the markets as well.

Q133 Colin Challen: Do you think there is too much emphasis in the UNFCC on market mechanisms and not enough on funded schemes and is that perhaps, following on from your previous answers, about treasuries because treasuries want to an abdicate responsibility and leave it to the markets? A leading question!

Barry Gardiner: Yes, I think it is leading in the right direction though. I do think there is too much focus in the UNFCC simply on the markets. They have tried to do this - and I think it is a mistake - in a way that replicates the old system of CDM. That is why they have gone down the business as usual in accordance with the historical deforestation trends baselines and used that whole structure. I think that has limited them. I also think that we are now at a point where we are so close to Copenhagen that it is impossible to simply say rip it up and start again. As I know you know and some others know, I have real doubts about the whole framework within which the UNFCC has been looking at incorporating deforestation into the post-Kyoto settlement. I think we have to go there, do something and amend.

Q134 Colin Challen: Does that leave us with the REDD as the least worst option then?

Barry Gardiner: REDD is going to be an essential component. We have to get a deal on forestry out of Copenhagen. I think it again must be a combined model. If you were constructing this on a clean slate, and if you were constructing it in accordance with principles of pure justice, rather than looking also at financial economic efficiency, then I think what you would go for is a simple standing stock model. Actually we are now so far down the road towards an avoiding deforestation model and historic-based emissions that I think inevitably what you are going to need to do is have a combined framework, a combined structure in order to cope with it. I think that is do-able. In fact, if you look at what came out of Accra and since, there has been growing understanding that a mixed model is going to have to emerge because you cannot cope with the problems that a simple historical avoiding deforestation model produces.

Q135 Colin Challen: What specific improvements could you suggest for the REDD in itself?

Barry Gardiner: The problem with simply looking at the structure as it has been proposed is that it is based on the CDM style and it is technically flawed. It is not going to be able to deliver. It has perverse incentives built into it and it does not reward countries who actually have protected and preserved their rainforests, whether by accident or by design in fact. It does not pay them enough to be a real incentive and therefore it is unlikely to succeed. I think it is also politically very difficult to sell to people. You and I go on the doorstep and if, on the rare occasion somebody comes to the door, and says, "Mr Gardiner, I hear you are doing a lot about forests. Tell me about avoiding deforestation." for me to say simply, "Hey, we are cooking up this great deal at Copenhagen where what we are going to do is to take a very poor satellite picture from ten years ago through to the present, which suggests a historical rate of deforestation, which is actually a bit hypothetical anyway. We take that and then what we do is we extrapolate from that into the future and then we establish from that extrapolation a reference rate, and then we mark off a deviation between that reference rate and what actually happens in accordance with some satellites that we send up from 2013 onwards, and then we are going to pay them for what they do not do," quite frankly, we are lost; that is not a saleable commodity on the doorstep and it puts everything into completely the wrong light, whereas if you say to people, "Look, what we are going to do is we are going to say we all know that trees are a good thing," "Yes," people nod, "And what we are going to do is pay people to keep their trees and to plant more of them." That makes sense and the standing stock model is based on that simple logic and the avoiding deforestation historical trends model is based on the hypothetical, which is very difficult to communicate to the electorate.

Q136 Colin Challen: Am I right in thinking that Brazil is opposed to the REDD and if that remains correct up to Copenhagen that will hole it beneath the water line?

Barry Gardiner: It depends who you speak to in Brazil. The international negotiations for Brazil are done by the Brazilian foreign affairs ministry. Many people and many distinguished former Brazilian environment ministers would have a very different view on it. Many Brazilian politicians would have a different view on it. However, Brazil has moved a tremendous distance in the past few years over forestry issues. Yes, Brazil's favoured model would be governments realising that they have to pay Brazil for Brazilian forests and for the global goods that that forest provides. They would not put it in those terms, by the way! It would be a funded model from either bilateral or multilateral sources, but preferably done in that way. I think, increasingly, Brazil is recognising that there may be a role for markets. I do not think we will finally know Brazil's position until we get to Copenhagen, but it has moved a long way in the past few years.

Q137 Joan Walley: If I can just come in there before we move from this area. Barry, you said in so many words that if we were starting from a clean sheet we would not actually start from here and we are quite a long way down the road in terms of post-Kyoto and the REDD proposals and whether or not, in your eyes, there might be a combination of both a REDD solution and a funded solution towards deforestation. How do you square all of that with the recession and the review of global finance institutions that has, if you like, come up on the radar more acutely since this process started? Do you see any scope for the discussions that are going on globally about the financial mechanisms that perhaps need to be adjusted to deal with the situation that we have got? Do you see any possibility that that debate, and the solutions that will arise out of that, could somehow or another be fine-tuned so that a value could be put on the biodiversity and ecological vision to which you are referring so that we get them aligned or is it just too late for that altogether?

Barry Gardiner: We cannot afford for it to be too late, but you have put in a number of themes and questions there and let me try and tease them out. We are at a very difficult juncture, you are right, we have a major international meeting at the end of the year in Copenhagen where we have to come away with not a clause-by-clause itemised deal but we have to come away with a deal to have a clause-by-clause itemised deal that over the following months can then be worked out. If we do not achieve that, if we do not get that outline of a deal at Copenhagen signed up to, then, in my view, we really are not going to be able, certainly as a world community, to meet the sort of challenges that we in this country believe will face us by 2050. The likelihood of getting anything underway by 2020 if we do not achieve a deal at Copenhagen has got to recede far into the distance, and that is a serious problem because, as we all know, the earlier we act the cheaper it is to achieve the sorts of emissions reductions that are required. You put into that the global economic crisis at the moment and that, as a context, is a deeply unhelpful one; you are right. It has meant that at a time when it might have been easier to focus finance ministries' attention around the world on the need to put a value on ecosystem services, their attention is diverted to the global credit crunch elsewhere and the packages that are needed to restimulate their economies, et cetera, et cetera. I would say that we should be now focusing on the G20 coming up in April. I think it is absolutely fundamental that we use the opportunity that that presents because the G20 are not just the "usual suspects" of rich countries around the globe who see this as, "Yes, I suppose we have got to pay out something for all the pollution that we put out into the atmosphere over the past 200 years, even though it may not affect us as badly and even though it may affect us later down the cycle." When you have got the G20 countries in there as well there are many more countries who are going to be much more immediately affected, and indeed are already being very badly affected by climate change. That means that the G20 may come together as an economic meeting in April to look at the global financial crisis, but if we have significant voices around the G20 table saying, "Actually, the big economic crisis facing my country is coming from desertification," or, "The big economic crisis facing my country is from floods or from drought," then we begin to get more traction on this issue in that way. I think to pick up your theme of is there an opportunity as well as a problem here with the global economic crisis, yes, I think there is. It is not going to be easy to focus economic ministers around the globe on valuations for ecosystem services in the next nine months, it is just not, but actually there are a few opportunities there that we have to use, and we have to use the knowledge that those countries that are the developing nations, that are more immediately affected, where their talk is much more about adaptation than mitigation, in helping us to do that.

Q138 Joan Walley: Do you not find it slightly perverse that in the same committee corridor there is a similar select committee inquiry looking into the financial crisis which is absolutely packed out in the middle of all the press speculation whereas our one does not have the same amount of interest whatsoever?

Barry Gardiner: That goes back to my remarks at the beginning. This is not just the case in the UK. I wholly applaud the decision to set up DECC because for the first time we are actually seeing climate change and energy put together in a way that makes sense, but we need this much, much more. I remember - and I think it was probably one of the reasons that it was one of the last things I did before I left off being Minister in Defra - at a speech at the Royal Society simply saying that you cannot tackle environmental problems without looking at world development and you cannot tackle development problems without looking at environmental issues, because the environment is so much of the GDP of the world's poor, and that therefore the logic of that was that we should think about uniting those two departments into an Environment and Development Department, and putting those two together. Half an hour later when I got back into the Department at Defra, a phone call had come through from the Permanent Secretary's office in DFID saying, "What the hell is your Minister doing saying that there should be one department? Are you trying to take over our department?" I then got a call from our Permanent Secretary saying, "What the hell did you say?" It is this lunatic paranoia and patch preservation when the issues are so clearly joined up. It is the "Oh, my God, we have got to treat them in separate budget heads and we cannot possibly look at a structured approach" that I find so debilitating here. But you are absolutely right; here we are talking about the credit crunch and over-leveraging and bubbles. We have all those symptoms going on in our environment and they are affecting us far, far more than the cost of the credit crunch and all that is going on there; and ultimately much worse.

Q139 Martin Horwood: I should say that we do appreciate the interest of all those people who have turned up! You spoke very eloquently in your opening remarks about the inter-connectiveness of things outside of the immediate area of the forests. In a previous inquiry we struggled with the issue of land use outside of forests. Particularly when we were looking at biofuels we struggled to find any kind of sustainable land use. If you take the Brazil example, what looked like sustainable land use in one part of Brazil actually increased pressure on land prices and might actually incentivise people to start using up rainforests in another part of Brazil. Do any parts of either the REDD models that are proposed or what you have thought about really tackle that issue or is it just going to add to an inflationary land price spiral that will end up with a race between rainforest value and the Brazilian ethanol industry or other equivalents?

Barry Gardiner: There are two things to say here. One is that if you are looking from an abatement side at biomass, then for things like wood fuel as a means of reducing emissions through renewable sources, the cost per tonne is about €25 to €30 per tonne of CO2 emitted. For sorting out forestry and avoiding deforestation, the abatement potential is on average about €9 per tonne. Sorting out forestry is a much better means of abatement than biofuels, plain and simple. Your point was a slightly different point, and that was about the tension on land use from increased biofuels and demand for biofuels and the erosion of forest and other terrestrial carbon. I think certainly the World Bank's paper on it that came out last year suggested that if you incorporate land use and the alternative land uses into all your calculations, then no biofuel could be said to be ultimately beneficial. I think there is a general understanding that the Brazilian ethanol programme is probably the most sustainable biofuel that there is, certainly if you compare that with other sources from other crops. I think that their bioethanol programme is probably the most sustainable. We are at first stage with biofuels, we are at that first level and there will be second generation, which one hopes will become more friendly yet. I think the point that we have to focus on is what is driving all this, and, again, something that is very, very uncomfortable to begin talking about, but cannot be left out of the debate, is population. We have a world population that is growing from just over six billion to 9.7 million by 2050. That increased demand is going to be not simply for water and food, but of course is going to be for energy as well, and we are going to have to produce more and more from less and less. We are going to have to become much more energy efficient. You may remember the previous McKinsey Report, which came out about a year ago, looking at the levels of energy efficiency that one would have to extract. I think the figures were something like 15-fold from a tonne of carbon was what you needed, so 15 times the amount of productivity from carbon in order to be able to meet the global need of a population of 9.7 billion sustainably so that you meet the overall target for carbon emissions to stay within the two per cent rate and yet the demand of a growing population. That means two tonnes of carbon per person on the planet. At the moment we are at, what is it, 11; the United States are around about 24 or 25; even China is at about five; India is at two. If you are going to see equity and justice for a population of 9.7 billion, you have to be much more energy efficient. So, yes, it is right that we should look for ways of getting second generation and, ultimately, third generation biofuels, but at the moment, most biofuels, not all but most biofuels, are a net detriment to the environment, and they cause very severe encroachment and drainage of resources of the forest.

Q140 Mr Caton: Barry, you have argued that the mechanism should give greater rewards for protection of forest which is important for biodiversity and other ecosystem services, and that seems very sensible, but how exactly would that work in practice?

Barry Gardiner: Look, I think that we tend to think, understandably, because the way in which we have done this thing we have always said that a tonne of carbon is a tonne of carbon and it does not matter if it is a tonne of carbon saved in the UK or whether it is by offsetting and saved in India and so on. I simply want to say, look, if you are saving part of a rainforest that happens to have high ecosystem service value because it is the habitat for certain species that are endangered REDD-listed species on IUCN, or because it has particularly rare species in terms of the trees in that forest, whether it is the habitat or the species themselves that you are preserving in preserving that forest, we can simply say "Look, on the market that should be worth more." We can ascribe different values. We can say if it is that sort of forest as opposed to a woody scrub forest in Gujarat, a spiny forest in Gujarat, then if the market is looking to pay there, it does not just pay for the carbon, it pays for the ecosystem resource that is being provided by that carbon in that form of trees. So it could be that it is providing watershed protection to get them; it could be on the basis of the seeding, of the weather and the generation of the rain forest. There are all sorts of ways that forests provide different ecosystem services and resources, and here I think I probably have to go back and partly defer to Des's original question when he said: do we need to know more? This is an area where, yes, we do know a lot about habitat, and so on, but there are other parts of forest biodiversity and the ecosystems where we could actually use research to be able to provide a valuation for carbon from those particular areas, and it seem to me that we simply do it that way. If you want to offset by saving a tonne of carbon there, you pay more, and if we are doing this through national governments that gives those national governments, not only greater resource to protect those special areas, but it actually gives them far greater incentives to protect those special areas as well.

Q141 Mr Caton: Do you perceive that negotiators and possibly decision-makers are moving in that the direction, away from what you call the tonne of carbon approach towards this valuation?

Barry Gardiner: They have not even sorted out what they are going to pay for a tonne of carbon, have they? Unfortunately, the answer to that question is they have not yet focused on this, but we have to be looking at front of wave here, and this, I think, is front of wave technology, in terms of the way in which we can financially incentivise and reward what we want. What do governments do? Governments simply set in place frameworks. They set in place legislative regulatory frameworks and they should do that to make markets function in the social ways that they want, whether that is as a national community or as a global community, and what we have to do is we have to set up the market for forest carbon and for terrestrial carbon in such a way that it is actually socialised in accordance with what the world needs. If that means saying, "Yes, what do we need? We do not need too many CO2 emissions", fine, pay for that, but if it also means that we want to increase water shed protection, if it also means that we want pharmaceutical resource, if it also means that we want to stimulate the number of pollinators that we have because of all these extra crops we are going to be pollinating for all these extra people, we can incentivise those things as well. All we need to do is regulate the market and structure it in that way financially and we will then get, through those incentives, the according social product, but we have to start thinking of it as much bigger than it is, not just as a tonne of carbon.

Q142 Mark Lazarowicz: Can I ask you to expand a bit more on some of the criticisms of the approach in the Eliasch Report. Greenpeace have suggested that his recommendations could actually lead to the continued loss of natural forests and their replacement with industrial tree plantations because REDD payments would be on a net rather than gross deforestation basis. Do you share the concerns which Greenpeace have suggested?

Barry Gardiner: I think that the Eliasch Report was a tremendously valuable body of work. It established goals for 2020 and 2030, in terms of halving deforestation by 2020, looking to make the global forest neutral, as it were, by 2030, and the importance of getting the financial mechanisms in place to do it. It looked at it from a market approach. It was not pretending to do anything else; it looked at it from that market approach. Inevitably, therefore, it is one part - not one side but one part - of the story. I do not think that Johan Eliasch himself would want to claim that it is the comprehensive solution for deforestation, and so it would be easy, I think, for Greenpeace, or anybody else, to pick away at aspects of it which are less than perfect. I do not want to do that. I think it was a really valuable step forward. It has made a very, very important point about the need for the UK to put financial resource into forestry on a bilateral basis, and if we take away the real positives from Eliasch, the big picture from Eliasch, then I think that is what we should do.

Q143 Mark Lazarowicz: I understand that. I was not wanting to take away from the big positive picture. I was just asking what these recommendations mean. This may well have been something Mr Johnson might have been more able to respond to in detail, I understand that, but it is a specific question of whether REDD payments should be on a net rather than a gross basis. I can see how, if the payment system was on a gross basis rather than a net basis, that might have an impact in reducing deforestation, but that is a subject maybe you do not know about.

Barry Gardiner: No, I do not know.

Q144 Mark Lazarowicz: A related question, which you may have a view on based upon your work and your visits, but certainly you will be aware, as we will be, of the vital significance of forest degradation and the need to try to minimise that process. Obviously, from our point of view, because of the significant impact that that degradation has on the carbon in the forest, not on the actual trees themselves but the whole process of degradation, have you any views about what specific measures should be put in place to encourage the enhancement of carbon stocks in degraded forests?

Barry Gardiner: Do you mean technically what could be done to upgrade degraded forest land?

Q145 Mark Lazarowicz: Whether it is through upgrading land or through measures perhaps to prevent further degradation. There is a range of options with which to try and tackle this issue of how you can upgrade a degraded forest. Upgrading might not necessarily be just planting trees, there might be other things.

Barry Gardiner: Let us look at a classic position where you have slash and burn: forest is cleared for slash and burn and agriculture comes in for two or three years and, after about five or six years, is clapped out because the soil is then depleted. You then have degraded land which is not much good for the agriculture that you initially got your revenue source from as a farmer. Traditionally what would happen is that people would move on. Slash and burn is not an unsustainable form of land management if you do not have a burgeoning population that is actually not allowing that land to then recuperate; so what would have happened would be the people would have moved on, they would slash and burn somewhere else, and the rotation of that would have been fine because there would have then been recolonisation by the plant stock within the forest. So the first thing you have got to do is to protect that degraded land from other uses, either for building and human settlement (because it is no longer good for agriculture it can be built on for homes, and so on), but the key thing is to protect it, and then, if you want to regenerate it quicker than would happen naturally, of course you can go about a plantation process to reclaim that forest, and that is comparatively easy to do. Any forester in that area is going to know what the key first canopy growth plants are that would re-establish the colonisers that will come in, and they will do that and they will successfully plant those, and five, ten years later, after they have set up the first canopy, they will put in the next growth to come through underneath. There are some very good examples. I visited an area in Malaysia where actually the virgin forest and the regrown forest were virtually indistinguishable. The only thing is that if you were (and I am certainly not) a really good forester, you would have noticed that what was missing in the regrown forest were the really old trees but from an ecosystem point of view, after about 40 years, to all intents and purposes, to an amateur going in it was much the same.

Mark Lazarowicz: That is helpful. Thank you.

Q146 Mr Chaytor: All the discussions about tropical forests and, as far as I can see, the negotiations in Copenhagen have assumed that the main challenge is to agree on a mechanism and then just press a button and sign an agreement and, hey presto, it is all in place. From my point of view, that ignores the capacity of the countries with tropical forests to handle and manage effectively these kinds of capital flows, and it ignores issues of their practice in respect of transparency of public finance, the levels of integrity of governance processes and also the question of corruption. My question really concerns the issue of governance. How do you feel Copenhagen should deal with problems of governance in the 40 countries that have the largest tropical forests that could benefit from a REDD system or a fund system?

Barry Gardiner: You are absolutely right, it is a serious problem, and any system that is going to work is going to have to have its NRV in place ultimately, but how do you rely on that NRV if you do not actually have initial governance in the first place? I think Eliasch's figure was something like four billion over a five-year period - that is $4 billion, I think, over a five-year period - would be needed for capacity building in the 40 countries that you mentioned. I would suggest that that is highly over optimistic. I think the idea that one could get away with---. The difficulty is this. On the one hand, you would not know how to use much more than four billion, because capacity building is inevitably a slow process. It may well be that for the first five years that is right but actually it needs to go far further and far deeper than that; but because you have touched on governance, can I simply state that here we are dealing with the problem of, in the first place, establishing proper title and ownership and what is legal, so what forest products were we talking about and what is legal. This is a tiny first step towards sustainability, but it is an absolutely critical point. If we cannot establish legality, the rest of it just falls apart, and here I would hope that this committee could send a very strong message on the need to ensure that we have a proper process that ensures that all forest products - all timber and wood products - in this country are from a legal source. If you look at the EU Initial Options Paper, which I am sure you as a committee have considered before, it was supposed to be that in May of last year there was going to be a decision in the EU on the Initial Options Paper. That was postponed to July. It was then postponed to September, the drawer-up of the consultation document said that they were not going to pursue that, they were going to come up with a completely new approach and, eventually, in November of last year, the Commission unveiled this supposed due diligence model. It is nonsense; it is absolute nonsense. It is pure procedural tick-boxing. All that was envisaged under the EU Initial Options Paper, the initial proposals that went forward, either for a ban or for a Lacey style Act, which would have been effective measures in one way or another, were cast out in favour of a procedure which said that each country and each industry had to have some process to show that they had put in place due diligence. So all the benefits of waiting for the EU in order to get 27 countries all to do the same thing is no longer there because each country is now being asked to come up with its own independent thing. It is absolutely incapable. It is a voluntary scheme, there is no provision for penalties within the structure and the whole point of trying to establish a barrier to illegal products coming into the EU has been lost. As I say, on this issue of governance the first thing that we need to do as a necessary pre-condition of getting all the way down the line on sustainability is to establish - and I believe we now have to do this at a national level - a proper scheme for stopping illegal timber coming into the UK. I think we have to do that at a national level; I think we cannot wait for the EU. This Parliament cannot achieve it within its life time, indeed this Commission cannot achieve it within its life time, and that was the Commission's own admission in March of last year prior to when they said that they had to produce it in May because if they did not they would not get it through the lifetime requirement.

Q147 Mr Chaytor: If the EU's model on legality is hopeless and if the Eliasch timescale of five years to get sound governance in place is far too short, leaving aside the question of legality of timber and just focusing on the mechanisms of governance in the 40 countries, what do you think the priority for Copenhagen should be and what more do you think, at the level of British governance, DFID and the Foreign and Commonwealth Office could do to promote this?

Barry Gardiner: We should be focusing on getting a deal at Copenhagen. That deal should not be held up by saying, "Well, of course, there are countries that are not going to be able to deliver this and there are these issues of governance." Of course, there has to be monitoring, recording and verification processes as part of that deal, and they must be absolutely robust. Certainly in terms of any participation in the benefits, either from funds for carbon and for REDD or moneys coming from the market in terms of offsets, any of those funds should only go to countries who have passed minimum governance thresholds, but that does not mean that you simply wait and say "Well, until you are strong enough in your governance procedures we are not going to give you any money for this." There should be a designated fund for governance, a readiness fund, and much of the work that the World Bank has been doing has been to get readiness funds there helping governments to come up to standard and improve their own procedures. This may have been something that you picked up when you were in Cameroon, but for many of the governments, their greatest frustration is that they bring sometimes quite talented people into those forestry and environmental departments in developing countries and they are paying them a government salary - a government salary in the Congo, a government salary in the Cameroon - and what happens is nice Western NGOs, very well-meaning, come along and say, "Oh, that is a good person in the Forestry Department there. Why do not we poach them", and they will then offer them three or four times their salary to come and work for the NGO. It is absolutely infuriating for these governments: every time they get somebody trained up, competent and just about ready to fulfil some of the governance procedures that we in the West are demanding of them, the NGOs come and poach the very people who are working to give them that capacity out of the system. Yet how do you say, "What we are going to do, government to government or through an international financial institution, through our readiness programmes, is help you with your governance procedures on forestry"? Are we going to say that we are going to pay officials in the forestry department more than you would the Director of the Economics Ministry? So there are real problems in not just getting the people in there trained up but retaining them once you have done that, and that is where talking about governance and readiness is really complicated because they come in, they get up to a certain level and then they are out of the door. At Copenhagen we have to focus on the deal but then set thresholds, and I would agree with you, they should be demanding thresholds, about the governance levels that countries have to be able to show in order to be able to benefit from the substantive funds that are going to flow from carbon here.

Q148 Mr Chaytor: In terms of the use of these contributions, do you think they are best distributed by the World Bank or the African Development Bank or are best done by a national body?

Barry Gardiner: As I said before, I think there is a role for both. I think we need to get as much money in, in as many ways as possible, with as many monitoring angles on it as we can. It is going to be by that sort of interlocking way that we really are going to raise things. If we just have one process that is coming in there, I do not think we are actually going to achieve, it, and we are not going to achieve it quickly enough.

Q149 Colin Challen: Do you think that the REDD mechanism will work without addressing the economic drivers that lead to deforestation?

Barry Gardiner: No.

Q150 Colin Challen: Thank you for that very succinct response. It seems to me that some people suggest that the carbon price will do the trick because when they get bigger rewards for not deforesting we will perhaps drive that out, but perhaps some people will be unscrupulous and just do both somehow.

Barry Gardiner: The more cost-effective the markets are in establishing a low price for carbon so that we can achieve greater levels of offset and abatement, the less likely the structure is to work for developing countries, and I do not simply mean in terms of raising their own levels of economic development and meeting their anti-poverty goals and our millennium development goals. I mean actually to work in transforming the forest and protecting the forest from deforestation. I think there has been, incorrectly, a focus that says the big problem is additionality here. What everybody is saying that the mechanisms have to show, the financial drivers have to show, is that if you are putting money in you have got to show that you are achieving something additional over business as usual and, again, this comes from the whole way in which this framework has been set up. This historical model is based on historical emissions; it is based on historic levels of deforestation. So what they have said, and again I would blame (and I put that in inverted commas because they do so much good work in this area) the NGOs for this. Their focus has been very much on additionality. If you are going to put money in, you cannot put money in and not see a big reduction, a big drop, in the levels of deforestation in the major emitting countries. That is their view. Therefore, the focus is you have got to get levels of deforestation down in Brazil and you have got to get levels of deforestation down in Indonesia. I used to have that view. I no longer have. I used to think that actually you needed to focus on where the problem clearly was before you turned your attention to where the problem clearly was not. I actually think that is wrong now, because the real problem, I think, is not one of additionality, the real problem for the markets is one of leakage; and what is going to happen is, as you drive down deforestation in the Amazon, as you drive down deforestation in Indonesia and Malaysia, what you are going to find is that actually it just goes up in the Congo, it just goes up in Guyana, it just goes up in all the other counties where it has not traditionally been a problem. Therefore, what I would seek to do is to put a prophylactic cover around those forests which have not suffered historically high rates of deforestation. I would seek to take them into the market mechanisms first and ensure that there was a good cost-effective price for their carbon first; lock them in; make sure that you are not going to get the deforestation escalating there, and then move to the places where already there are high rates of deforestation, in the Amazon and Brazil is doing a lot on its own for its own very good reasons and for its own very good policies, in order to stop deforestation anyway, and then go and give additional help there and also do the same thing in Indonesia.

Q151 Colin Challen: The UK has been the world's fourth largest importer of wood products. Are we doing enough to stop the unsustainable logging and deforestation? What more could we do?

Barry Gardiner: We have been spikes. Really since about 15 months ago I have been saying that the EU process is not going to get anywhere, it will be fudged and frittered away. I said to ministers, "Please, do something at a national level - that is the only way that you are going to get something in place - and then drive the process by leading it." The EU Initial Options Paper that I mentioned to David dragged on through May, busted its own deadlines apart. At that point I went to Hilary and I said, "Look, they have failed to meet their own deadlines. They are the ones who said that if they did not meet the May deadline they could not do it in the life-time of this Parliament or the life-time of this Commission. You are now in a situation where, even were they to drive ahead with these lunatic proposals that they have now come up with, nothing could be in place before 2013. It is time that we cannot afford to waste." All these officials in the UK said, "Well, the goal of having an EU wide agreement is so great that we want to hold on and see whether the EU process can get us to it." That fell apart when they came out with these latest proposals, which are not for a unified scheme across 27 nations but for 27 separate schemes for each nation to be able to say, "We have some process of due diligence." You know that if you are a crook and you want to get round a system, the best way to do it is to have a series of boxes that you have got to tick: "I have done that, I have done that, I have done that; now I am safe", and it does not matter, this process does not look at whether the logs or the timber is actually illegally sourced or not, it does not care whether it is or not. All it cares about is have you shown that you have exercised due diligence on this matter, on this matter, on this matter, and if you do that, you are safe, nobody is going to prosecute you. In fact there are no provisions under these proposals for prosecutions at all - none. So the whole benefit of a supposedly EU wide scheme has gone out of the window, the timescale has receded five years into the future, now four, and we still do not have a way of ensuring that in Europe and in the UK we can be confident that timber and timber products coming in are not illegal. We are ignoring the fact that, for once, the United States on an environment issue took the lead, and now, over a year ago, at the end of 2007, put through its amendment to the Lacey Act which means that timber is now part of the Lacey Act. It is operating very well. We have had reports from Chatham House, from their customs officials and others showing how they have implemented it, how they have been working with developing countries and it is an effective way of stopping illegal timber coming into the United States. We should be doing in Europe exactly the same and saying, "Let us piggy-back their scheme." What we want is a global agreement on how to resolve these issues. So if the United States is doing it and doing it successfully and getting prosecutions against the crooks in co-operation with the developing countries, the forest countries, why are we not saying, "Hey, great, you have invented the wheel. We do not need to reinvent it. We do not need to have 27 separate other processes, tick-box processes. We will go along with yours and we will put that in place over here." I believe absolutely we have to in this country now take the lead. There are others in Europe that would be willing to do this with us. In Denmark I am confident they would wish to do something similar, possibly in France and Italy as well, and in the Netherlands, but actually to take the lead on this and say we will put in a national scheme, similar to the Lacey Act, with the same sort of provisions as the Lacey Act in the States; we will get that in place and use that as a way of driving best practice into Europe rather than what they are now looking at, which is absolutely best practice.

Q152 Chairman: Thank you very much indeed. That is a useful tour round the issues and amplifies on all the things that we looked at and thought about in Cameroon. We have got one more session before we write out report. We are very grateful to you for coming in.

Barry Gardiner: I am most grateful. Thank you.