By Ronja Fischer, BIOFIN Intern
We recently investigated what kind of financial actions are needed to create a nature-positive bio-economy. Now, we will take a deeper look at how the bio-economy itself could be nature positive, taking forestry as an example.
When talking with countries or companies engaged in bio-economy, there is a lot of emphasis on research and development, on innovation of new materials (or new ways of using existing materials), the challenges and opportunities related to those materials, the reduced CO2 impact, and how important collaboration along the value chain and within the sector is. To be clear, these aspects are all very important and relevant.
However, the most important aspect is our planetary boundaries, and therefore the limits on sustainably available resources. What actions could be taken to ensure these boundaries are respected and protected?
The forest is not enough
Forestry is one of the driving sectors of bio-economy. Forestry products can be used for ‘traditional’ practices such as fuel, paper, and package production, as construction materials, and of course as source of food. New products regularly emerge and will continue to do so. The pharmaceutical sector is always engaging in bioprospecting to find a new super-medicine or super-food, such as açai - a berry from the Amazon which is now well known across the globe.
The demand for materials from our forests is increasing across most sectors. In construction alone, demand for forestry products is projected to grow from US$ 603 million in 2017 to $1.6 billion in 2024. And while the demand for paper for printing and writing is dropping, demand for packaging continues to rise.
When talking about an increasing demand for forest products, we need to consider the other very important functions forests provide for us: Besides being a carbon sink and a significant influencer of local climate, forests are also home to immense amounts of biodiversity.
This is well known, yet forests continue to shrink today, especially in Africa and Latin America. And shrinking forests mean that part of their biodiversity is forever lost. In the Amazons, for example, a new species is discovered every two days.
Forestry products can be an important element of a sustainable production chain. They can replace carbon-intensive and non-renewable materials, facilitate recycling and cascading while allowing us to avoid using toxic alternatives.
But there is one problem; there are not enough forests to continue as carbon sinks, protect biodiversity, and provide us with all those products.
How can bio-economy and biodiversity come together?
Bio-economy is based on using natural, renewable materials, which means there are limits – these materials need time to grow and recover.
Moreover, producing natural resources in a monoculture does not help the climate, biodiversity, nor economy in the long term. Monocrops, for instance, are not conducive to good soil health, and by focusing on only one type of crop large swathes of land are left vulnerable to significant losses if crops fail.
So, what can be done, to shape a nature-positive bio-economy?
For the forest, it doesn't matter whether deforestation takes place to replace it with monoculture, pastoralism, or bio-economy. For the forest, the only thing that matters is that its ecosystems remain intact.
Therefore, in order for bio-economy to remain sustainable, it needs to consider the "bio" part of the economy not only as the use of biological resources but rather as contributing to nature and biodiversity.
In other words, the economic activity should not lead to direct or indirect deforestation.
Bio-economy companies need to use forests in a way that supports the communities that live inside them. Activities need to be socially fair and increase the livelihood of the people in place. Bio-economy can contribute if it first considers both local population and environmental boundaries and then, only in a second step, the production and profit-earning potential.
The concept of a nature positive bio-economy needs to, first of all, be anchored in a strong international legal framework. At the recent COP 26 in Glasgow, about 130 countries pledged to stop deforestation by 2030, including big players like Brazil and Indonesia, and we are also seeing local governments showing growing commitment and cooperation.
To translate such concepts from the global to regional or national level has proven challenging.
Within the EU, for example, the bio-economy definition includes "To be successful, the European bio-economy needs to have sustainability and circularity at its heart.” To make this effective is not always straightforward.
Only recently, the European Court of Auditors found the EU Forest policy 2014-2020 to be inadequate. Critics concluded that illegal logging is still an issue. One reason could be the missing (or not effective) controls by the Member States, notwithstanding existing low-cost control options. Sustainable forest management, therefore, needs to be better defined, using ecological principles as the starting point rather than economic ones.
Putting nature first
All of us can contribute, as citizens, organizations, companies, cities, regions, or countries.
We can check whether the right frameworks are in place of what is possible to do to adjust them. We can see what kind of products we produce and change how we source and use the necessary materials. We can refrain from buying unnecessary items and buy the required goods consciously.
Let’s take the deforestation pledge of the recent COP: If the world is to deliver on this pledge, companies need to revise their supply chains by 2022 and change how their products are sourced if deforestation is involved.
Financial institutions need to de-invest from deforestation-products or companies responsible for deforestation while countries need to put deforestation regulations in place, which also respect the right of the indigenous people and local communities, establish due diligence before and monitoring during and after engaging with partners to ensure that the no-deforestation condition is respected.
In order to get everyone on board, multi-stakeholder dialogues should be in place, from private sector to local communities. Small companies who do not have the competencies to revise their supply chain should have access to technical and financial support.
Companies and countries together can find innovative, locally suitable solutions, which helps people and the planet.
If deforestation is driven by subsistence agriculture, why not consider Payment for Ecosystem Services? If the country is mainly an importer of wood-based products, then trustworthy certificates and an appropriate monitoring system might be the solution. In tropical countries for example, why not go for banana leaves instead of paper bags?
To get a nature-positive bio-economy that contributes to reducing climate change and maintaining biodiversity and that is carbon low, sustainable, and socially fair the way forward is actually simple: Reverse our thinking – put nature first, productivity, and profit second. Not just signing pledges but delivering on them.