Policy Challenges in the Woodfuel Sector

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Policy Challenges

Wood-based fuels contribute substantially to the total energy consumption in most developing countries - particularly in Africa, where firewood and charcoal account for more than 80% of the energy used. Most of this energy is used domestically for cooking and heating.

Although governments and decision-makers at national level may declare their intent to align national policies with international standards, the practical implementation, enforcement and monitoring are often insufficient. This holds true particularly for wood-based fuels. National forest policies all too often fail to address issues relating to the supply of woodfuel, and energy policies tend to label wood-based fuels as a ‘backward’ and ‘primitive’ source of energy – one that is to be replaced with fossil fuels or electricity as soon as possible. In consequence, the issue is commonly overlooked – even discriminated against – in forest and energy policies alike.

In most developing countries, the extraction of firewood and charcoal is not regulated in practice, much less are forests managed in a sustainable manner. Where firewood and charcoal are sold, market prices almost always reflect extraction costs only. Landless domestic migrants and the poorest segments of urban populations typically spearhead the commercialization of firewood and charcoal, because they have few other choices. Middlemen and retailers play a catalyst role, mostly in larger cities. Under such conditions, the only limit to firewood ‘production’ is when it is no longer economically viable to transport fuel from where it is grown to where it is used.

Such extraction regimes may hardly be called sustainable. They usually result in rapid depletion of forest resources, with deforestation spreading in concentric circles around urban consumption hotspots. The poorest and most vulnerable segments of society are first to be cut off from much needed basic energy services as market prices for firewood and charcoal (even if they reflect extraction costs only), grow beyond their means.

Non-regulated exploitation, along with its adverse environmental and social impacts may, in essence, be ascribed to policy and government deficits. Solving the problem requires the adoption of policies that promote sustainable production and the modernization of the woodfuel sector.

Modernization of the Woodfuel Value Chain

Modernization of the woodfuel value chain is a complex undertaking requiring targeted policy interventions, governance support and law enforcement with a view to formalizing energy business, promoting production and sustainable management of forests and woodlands, and leveling the playing field for a wider range of resource-dependent stakeholders.
It is imperative that governments recognize both the significance of woodfuels and the potential of sustainable sourced biomass energy to complement “modern” energy sources such as LPG and kerosene and (to a minor extent) electricity. Official biomass strategies are pivotal to this end.

The Biomass Energy Strategy (BEST) Initiative -a joint effort of the EUEI Partnership Dialogue Facility together with GIZ- supports African governments in developing national biomass energy strategies that set out rational and practicable approaches to managing the biomass energy sector (http://www.euei-pdf.org/thematic-studies/biomass-energy-strategy-best-guide-i).
Establishing a biomass energy strategy should not be mistaken for an isolated exercise but as an integral part of an inter-sectoral development process. An ideal biomass energy strategy should ensure that resources are used without negative social, economic and environmental consequences. This requires balancing the supply and demand of biomass energy. In addition a stepwise modernization process has to be outlined proposing a continuous refinement/adaptation of relevant framework conditions, organizational and procedural aspects, and technological development.

While the energy sector is responsible for energy supply and demand, a number of other sectors have a niche in biomass energy issues. These include forestry, agriculture, environment, industry, health, population, gender and education.
The challenge is to launch a participatory process with all relevant stakeholders, so as to focus resources on providing sustainable and affordable options for the poor and thus contribute to a supportive policy framework.
The Biomass Energy Strategy (BEST) Guide provides useful information for policy makers and energy planners and can be downloaded here.

Land Use Planning

Land use and spatial planning is an indispensable precondition for sustainable forest management (and, by extension, sustainable provision of biomass energy). It ensures quantitative protection of forest resources against haphazard conversion for short-sighted gains, and helps to prevent/mitigate disputes over access to land resources. Without it, intergenerational equity cannot be achieved.
Land use plans analyze, valuate and prioritize multiple interests in land. They provide the point of departure for the allocation and regulation of land uses, and represent a pillar of rural development. They are a principal reference and decision-making aid for any given administrative unit. From a forest governance point of view, land use plans serve a double purpose: First, to determine the permanent forest estate (PFE), and, second, to identify “surplus” areas available for reforestation.
In general, spatial planning considers and reflects, inter alia:

1. the functionality of spatial and community structures
2. ecologically sustainable land use patterns
3. the provision and maintenance of infrastructure
4. facilities and resource bases to support the regional economy
5. economic efficiency in land use patterns
6. landowners’ rights

Spatial planning has also become a prerequisite for shaping a REDD+ implementation framework. The main focus is to prevent further loss of remaining forests and to motivate local farmers/communities to protect, sustainably manage, and regenerate their forests in line with eligibility criteria for REDD+ funding.

Security of Tenure

Forest tenure is a broad concept that includes ownership, tenancy and other arrangements for the use of forests. It is the combination of legally or customarily defined forest ownership rights and arrangements for the management and use of forest resources. Forest tenure determines who can use what resource, for how long and under what conditions.

Tenure insecurity is one of the principal underlying causes of non-regulated forest use. Sustainable forest management is a multi-year investment, and cannot function unless managers and users can be reasonably sure to reap the future benefits of present day labor and expenditures.
Tenure arrangements are highly specific to a country’s political and legal system, social order and historic development. This must be adequately reflected in wood-fuel policies. In many cases, forest resource tenure does not amount to full land ownership.

Ownership is defined as the exclusive legal right to a thing:

1. the right to possess
2. the right to exclusive use
3. the right to manage and / or dispose of the property
4. the right to income
5. the right to security
6. the absence of term
7. the liability to execution

While (forest) land ownership frequently rests with the state, rural households or communities may lay claim to a wide range of rights of access, management and use (both statutory and customary).

It is widely recognized that security of tenure is one of the most significant framework conditions necessary for sustainable forest management (see also From Exclusion to Ownership? 2008, Rights and Resources Initiative). Recent comparative studies show clearly the relationship between insecure tenure, poor economic performance, social instability, degradation of natural resources, and critical biodiversity losses (USAID (2007): Land Tenure and Property Rights Regional Report; Vol. 2.1 East and Central Africa).

Woodfuels are no exception to this rule. Open access and unregulated use allow the growing scarcity of wood resources to go unnoticed – or else obscured until overexploitation has exhausted forest resources to the point of deforestation and economic non-feasibility.

Fuelwood is typically harvested from woodlands and degraded secondary forests adjacent to settlement areas. Even though, forest fringe communities rarely hold title to the forest resources they depend on for their daily subsistence. Unlike timber plantations, valuable high forests, or protected forests, areas of this kind are neither privately owned, nor do they attract high levels of attention of local governments, forest authorities or civil society. Rural communities often operate on the basis of customary laws and established custom, and rarely avail of formal title documents. They usually lack the means to formalize their claim, or to defend it against external infringements.

This situation creates a formidable disincentive for investments in sustainable forest management. It explains why unchecked exploitation and informal production and marketing are difficult to replace with more transparent and equitable arrangements.

Several actions need to be taken to support the strategic shift from demand-driven exploitation to production-oriented management:

• Identification, documentation and subsequent reconciliation of claims to forest areas,
• Mapping, demarcation and cadastral registration of forest areas, including those dedicated to sustainable production of wood-fuel (documenting land ownership, by producing documents, diagrams, sketches, plans, charts, and maps)
• Clear assignation of rights, obligations and responsibilities (including decision-making authority) in respect of forest resources, both within communities (for both men and women), and pertaining to third parties,
• Establishment/empowerment and capacity development for community-based institutions in charge of forest resources,
• Agreed and documented approaches to conflict-resolution and enforcement mechanisms.

No blueprints or easy options are available to solve tenure related problems and challenges. In each case, tailored solutions must be designed through careful analysis of the prevailing political, legal-regulatory, administrative, socio-economic, socio-cultural, and historical contexts. Multi-stakeholder consultations can help foster ownership, and reduce the potential for land-use conflicts. For further reading, see: Strategies for Strengthening Community Property Rights Over Forests, Lessons and Opportunities for Practitioners, Andy White, and Alejandra Martin - 2002 Forest Trends.

There are three basic types of instruments to support tenure reform and to promote tenure security are highlighted below:

• Promotion of joint management arrangements to foster good relations on fragmented forest areas, and establishment of Forest Management Units (FMUs) sufficiently large to enable Sustainable Forest Management (SFM) through forest owners’ associations, cooperative arrangements, Public-Private Partnerships (PPP)
• Incentive systems (regulatory as well as financial), and gaining public support through advisory and assistance schemes, credit schemes, tax-rebates, payments for environmental services (PES)
• Capacity development through a diverse scope of measures ranging from community empowerment and advocacy to practical management training and organisational / marketing support (e.g. through design and promotion of value chains etc.).

Regulation and Control

Strategies to promote sustainable production of woodfuels hinge on framework conditions which compel woodfuel merchants to supply their trade from sustainably managed forest areas, and discourage unregulated harvesting. To this end taxes, fees and charges may be imposed on products sourced through environmentally undesired land-use practices. This would protect people investing in sustainable forest management from market distortions arising from competition with exploitative land use systems. However, adopting such an instrument bears the risk that socially vulnerable groups are disqualified.
In practice the introduction of a differentiated taxation scheme has proven to be successful, presupposing efficient tax collection. Differentiated taxation means that only woodfuels sourced from unregulated exploitation and/or open access areas are taxed. By contrast, communities/farmers who engage in sustainable management on their own properties would remain exempt from taxation (or similar disincentives). This needs to be certified by proof of origin (coupon system on the basis of sustainable exploitation quota). By taxing transport of cut firewood only, the system is comparatively easy to control and promotes efficient administration – as opposed to more extensive and highly decentralized systems based on the granting of firewood cutting permits.

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Case Study: In Chad a differential taxation system provided incentives to invest in sustainable forest management

The World Bank Household Energy Project in Chad introduced a differential taxation system. Rural Woodfuel Markets (RWM) were rewarded for their investments in sustainable forest management. Ninety percent of the taxes levied return to the community and the local management structure. Woodfuel traders exercising business as usual by exploiting open access areas have to pay double the tax, sending 50% to the Ministry of Finance and 50% to the Agency (AEDE) promoting RWM. In case of fraud, taxes quadruple and a fine has to be paid. Rigid controls outside the city limits substantiate heck tax payments.

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This approach, while providing good market incentives for sustainable forest management, is entirely dependent on strong public institutions to ensure effective control, revenue collection, and transparency in benefit-sharing.

Law Enforcement

Policy formulation and design of regulatory instruments is ineffective, unless backed up by strong institutions capable of law enforcement. The introduction of sustainable forest management schemes depends upon transparent fulfillment of management contracts, protection of tenure rights, and road checks of woodfuel transports on the main entry roads to urban areas. Enforcement capacity equally depends on professional skills, equipment, and institutional integrity. Unless staff are internally monitored and paid competitive salaries, the systems described are susceptible to corruption and abuse. Similarly, worthwhile market incentives, some form of enforcement, and a high level of integrity are needed within the rural communities involved. Development support geared towards enhancing woodfuel policies and designing regulatory frameworks conducive to both forest resources protection and poverty alleviation must go the extra mile to build up viable institutional frameworks, if a lasting impact is to be achieved.Support to the development of regulatory and law enforcement capacities may benefit from lessons learnt and approaches of forest law enforcement and governance (FLEG) processes, even though problems relating to woodfuel production and use are, of necessity, localized.

->The main outcomes and lessons learned from five regional workshops on forest law compliance and governance conducted jointly by FAO and ITTO are provided by the following document Forest law compliance (pdf)

->Furthermore the following internet site illegal-loggin.info provides interesting information and document on illegal logging, forest governance and forest management.

Financing Through Carbon Management

Forest resources in general have the capacity to absorb and store carbon dioxide, and exert influences on climate dynamics through evapotranspiration (= sum of evaporation and tree/plant transpiration from the earth's land surface to atmosphere) and albedo (= extent to which a tree diffusely reflects light from the sun) effects. The degree to which this happens is subject to a wide range of determining factors, biotic (caused by living organisms) and abiotic (caused by chemical and physical factors), anthropogenic (derived from human activities) and others. Above all, it is highly specific to site conditions, tree species composition, and growth dynamics. It is therefore difficult to quantify the global forest resources’ contribution to the mitigation of climate change. According to generalized estimates, terrestrial ecosystems absorb as much as three billion tonnes of anthropogenic CO₂ emissions annually, and global forests (covering approximately 30% of the total land area) are believed to store more than double the amount of carbon in the atmosphere. As climate change unfolds, more frequent hot and dry seasons increase the risk of forest fires and pest outbreaks – turning net sinks into sources of CO₂ emissions.

In general, mature natural forests close to, or at their peak have absorbed their full quota of carbon, with very little or no net-absorption of carbon dioxide. Juvenile forests, on the other hand, store significantly lesscarbon, but due to their still dynamic growth, they absorb substantial amounts of CO₂ from the atmosphere. The same applies to managed forests which, due to continuous or periodic timber harvesting, are constantly kept in a juvenile state (provided that they are managed sustainably). Forest degradation directly affects and diminishes both a forest’s storage and absorption capacity. Deforestation not only releases CO₂ stored in standing trees, but leads to rapid decomposition of organic matter in the topsoil – adding to the negative effect.

Forestry may contribute to the fight against climate change in four ways:

1. expansion of forest cover through afforestation and reforestation
2. improved forest management to optimize carbon-storage capacity in existing forests
3. replacement of less-environmentally friendly products and fuels with timber products and wood-based fuels from sustainably managed forests
4. reduced emissions from deforestation and forest degradation

Wood-based fuels are typically harvested from woodlands, shrublands or degraded secondary forests adjacent to settlement areas. Due to the prevailing vegetation characteristics, density, site conditions and use pressure, the capacity of fuelwood forests to absorb or store carbon dioxide will tend to be modest. This applies to natural forests as well as woodfuel plantations, which are often located on marginal sites, unsuited for more economically attractive production. Biomass accumulation per hectare is therefore lower in typical fuelwood forests than it is in mature high forests.

Nevertheless, the sustainable management of wood-based fuels creates significant opportunities to protect and stabilize existing woodlands, to restock degraded and barren areas exposed to threats such as soil erosion and surface run-off, and to conserve and rehabilitate carbon stocks and the absorption potential of forest areas. Wood-based fuels from sustainably-managed sources can provide carbon-neutral energy that may replace less environmentally-friendly energy sources, and be more accessible to the poorest sectors of society.

CDM	Clean Development Mechanism 'under the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC)
A/R	Afforestation and Reforestation
LUCLUF	Land Use Change, Land Use and Forestry
REDD	Reduced Emissions from forest degradation and deforestation
VCM	Voluntary Carbon Market
tCER	Temporary Certified Emission Reductions
ICER	Long-term Certified Emission Reductions

Whilst beneficial in environmental and socioeconomic terms, these effects do not automatically translate into revenue-generation under the various international schemes and programs designed to combat climate change. These include CDM A/R measures in the LUCLUF context, REDD measures, and VCM. While CDM A/R measures are currently recognized under the Kyoto Protocol, a framework for REDD is only just emerging; this framework is likely to be reflected in a post-Kyoto arrangement. VCM, by definition, operates outside the Kyoto context. All these instruments are structured around the storage and absorption capacity of forest resources

CDM A/R projects are jointly conducted by industrialized countries ("Annex 1 countries") obliged to reduce and/or offset their GHG emissions, and by developing countries without that obligation. Industrialized countries are entitled to claim up to one percent of their GHG emission reduction obligations through investments in CDM A/R projects. Strict procedural rules restrict CDM A/R measures to areas that are either free of forest cover, or cleared before December 31^st, 1998. CDM A/F measures generate either Temporary Certified Emission Reductions (tCER – for a period of 5 years) or long-term CERs (lCER – for an unspecified project implementation period) that can be traded internationally. CDM A/R projects are characterized by relatively rigid, strict procedural rules and requirements (definition of forests, demonstrated additionality, safeguards against leakage, demonstrated permanence); they carry high credibility and are internationally recognized. Certified emission reductions only reflect the accumulation of biomass over time (i.e. the growing stock), which means that logging activities – however sustainable – diminish a given forest area’s potential for generating CERs. The same applies to any accidental loss of forest cover due to fire, pests, storms etc.

The Bali Conference, December 2007 (UNFCCC – COP 13) adopted the ‘Bali Roadmap’ towards a post-2012 international agreement on climate change. It notably included REDD as an optional instrument under a post-Kyoto arrangement, which had hitherto been excluded due to difficulties in defining deforestation/forest degradation, determining a baseline, and safeguarding against leakage effects. At the Bali Conference, the Forest Carbon Partnership Facility (FCPF), headed by World Bank, was launched specifically to develop a framework for REDD implementation and to facilitate the transfer of international funds to countries facing deforestation threats.

To these ends, the FCPF operates two basic instruments:

1. The readiness mechanism, which serves to prepare developing partner countries for their participation under the REDD scheme through the promotion of conducive political, legal-regulatory and administrative framework conditions required for REDD.
   
2. The carbon finance mechanism, which is implementing pilot interventions in a limited number of selected countries.

REDD offers interesting options to link up carbon-sequestration more directly with biodiversity conservation and the promotion of sustainable rural livelihoods. Pinpointing forest areas that are suitable for recognition as ‘committed forests’ under the REDD scheme will be paramount (see also: International Forest Policies and Politics: Their Implications on Deforestation).

Finally, the VCM schemes afford options to countries which have not yet ratified the Kyoto-Protocol or which lack a national emission-trading system, and to projects which either operate outside the CDM, or are too small to justify the investment required for fully-fledged verification and monitoring. Various protagonists are demonstrating how VCM schemes can be used, including ‘ATMOSFAIR’, ‘PRIMA KLIMA’ and international environmental NGOs such as WWF and Conservation International. Numerous pilot measures are underway in a variety of developing countries (e.g. Madagascar, the Philippines, and Indonesia).No conclusive evaluation of these various initiatives are given here.

International carbon-sequestration arrangements and instruments are subject to rapid change. Their application depends on a country’s ‘readiness’ in terms of such factors as a national forest inventory and monitoring systems, adequate regulatory frameworks and administrative capacity. Capacity building, knowledge transfer and awareness building are required to foster the formation of carbon markets in developing countries. These observations underline the need for a coordinated energy policy which takes account of policies in related sectors.

Further Information

• Bonan, Gordon B.:Forests and Climate Change: Forcings, Feedbacks, and the Climate Benefits of Forests. Science (320): 1444-1449.
• Canadell, Joseph G. and Raupach, Michael R.:Managing Forests for Climate Change Mitigation. Science (320): 1456-1457.

References

This article was originally published by GIZ HERA. It is basically based on experiences, lessons learned and information gathered by GIZ cook stove projects. You can find more information about the authors and experts of the original “Cooking Energy Compendium” in the Imprint.

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