Tropical Forests Are Being Destroyed. What Are Multilateral Banks Doing?

Neither the World Bank, nor any of the MDBs, are tracking their forest impacts on an institution-wide basis. Nor is it possible for third parties to figure out. We tried. If what gets measured gets done, then the absence of forest data among the MDBs is not a good sign.

From burning forests in Brazil to the trillion tree initiative sign-ons in Davos, forests are in the news.  The IPCC’s “Climate Change and Land” report (Aug. 2019) highlighted the role of forests for addressing climate change, along with other elements of land use. 

“Land plays an important role in the climate system,” said Jim Skea, Co-Chair of IPCC Climate Change Mitigation Working Group (WG III).  “Agriculture, forestry and other types of land use account for 23% of human greenhouse gas emissions. At the same time natural land processes absorb carbon dioxide equivalent to almost a third of carbon dioxide emissions from fossil fuels and industry,” he said.

For folks who work on climate issues, including at multilateral development banks (MDBs), the importance of forests and land use for climate and other sustainable development goals has been well-known.   This is reflected, in fact, in their own policy documents.

 And MDBs play a potentially important role in leading developing countries’ forest conservation and restoration efforts.  This flows from their identity as multilateral public institutions, which provides both the perspective and mandate to address regional and global public goods problems like climate change. 

Forest Commitments: MDBs and Global Goals

Are they fulfilling this role?  We took a close look at four MDBs: African Development Bank (AfDB), Asian Development Bank (ADB), Inter-American Development Bank (IDB), and the World Bank (WB).  What we found was that on paper, the answer is yes.  For example:

  • All four MDBs have robust climate commitments that include reducing emissions from deforestation;
  • AfDB seeks to double the share of population with access to clean cooking services (reducing the use of wood and biomass as fuel), from under a third to almost two-thirds;
  • ADB’s strategy is to actively pursue forest protection and rehabilitation of degraded forestlands in its region, while keeping agricultural development to non-forest lands;
  • IDB committed to creation of co-management regimes for priority ecosystems, recognizing the role of indigenous people as land owners and managers;
  • The World Bank has perhaps the most ambitious plans, such as supporting growth patterns that significantly reduce deforestation and increase carbon sinks while addressing livelihoods for forest-dependent people.

Another perspective is whether and how the MDBs are aligned with and contributing to global forest–related goals.  To determine this, we looked at broadly accepted global policy frameworks containing forest-related commitments, namely the:

  • UN Strategic Plan for Forests 2017-30 (Apr. 2017);
  • UN Sustainable Development Goals (SDGs) (Sept. 2015);
  • New York Declaration of Forests (NYDF) (Sept. 2014);
  • Consumer Goods Forum (CGF) Zero Net Deforestation Commitment (2010); and
  • UN Convention on Biological Diversity (CBD)’s Strategic Plan 2011-2020, including the Aichi Biodiversity Targets (2010).  

 While the MDBs are not party to these plans and goals, many of their clients are.  And when we compared the commitments in them to the MDBs’ own, they were largely aligned—indeed, the MDBs’ commitments often represent the highest standard.  

 To analyze where the MDBs stand relative to the global commitments, we created a consolidated list of 37 forest-related actions, drawn from both the MDB documents and the global goals.  Many of the goals overlapped, indicating strong alignment between the MDBs and the global goals.  The resulting list is about half from the World Bank and half from the five global goal documents.  The regional MDB commitments did not make the cut, not because their commitments are no good, but because they tended to be more narrowly framed around regional issues (like clean cook-stoves in Africa).  

Monitoring, and Performance: Question Marks and Shortfalls

So far, so good: everyone agrees forests are important, everyone has plans, roughly aligned, to do something about it.  Of course, it’s one thing to say you will do something; it’s another to do it.  Here the story gets complicated.

There is more money flowing into forest finance, for conservation, sustainable landscape management, and restoration, than in the past.  For example, the World Bank’s annual rate of new forest project approvals has increased by almost $100M p.a., to over $725 million, since 2016. But even though this gives the World Bank the largest portfolio of forest projects among MDBs, at $3.9 billion, this still represents only 1.2% of its overall portfolio.  So—what really matters is how the other 98.8% impacts forests. 

 The answer to that is: we don’t know.  Neither the World Bank, nor any of the MDBs, are tracking their forest impacts on an institution-wide basis.  Nor is it possible for third parties to figure out.  We tried.  For example, we looked at IDB’s performance on its 20 forest-related commitments, and found no data or projects whatsoever for five of them.  On others, performance was mixed (we’d give it a B-).  For the World Bank, the data gaps are even bigger; we were able to score only 7 of 39 commitments, although again, from what we see, it comes to a similar grade—progress, but not enough to achieve even its own targets.

What to Do?

For starters, MDBs and donors who care about forests need to recognize that forest investment is falling short, particularly given the current gaps in managing forests in many countries, and to build broad support for scaled-up action.

Second, MDBs need to get serious about monitoring the impacts of their projects on forests.  While capacity and technical issues can get in the way, these obstacles are shrinking as forest monitoring tools have become cheaper and more accessible (on your phone, for example!). New science and technology have enabled operational forest cover change monitoring almost anywhere.

Third, MDBs must include forests more in development planning: This need is recognized in the global policy commitments, roughly a quarter of which address planning and institutions needed for integrating forests in sustainable development efforts.  An example (from SDG 15.9 and the UN Strategic Plan) is: “By 2020, integrate forests and related ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies and accounts.” 

Fourth, increase climate finance that integrate forests: Given that one of forests’ greatest values to human well-being is in stabilizing climate (absorbing greenhouse gases, conserving soil, regulating rainfall), and the low level of climate finance for forests, MDBs need to increase financial incentives for climate change solutions that integrate forests.

Fifth, mainstreaming of forests – consideration of forest impacts by other sectors—is equally critical.  Infrastructure, extractive or agriculture projects that do not protect forests and local forest stewards risk cancelling out the benefits brought by forest projects.   For example, the CBG bauxite mine pictured above is one of two whose expansion IFC, the World Bank’s private sector arm, is financing.  Yet to feed power to these mines, a dam is being built that will flood 264 square kilometers, wiping out the homes and lands of 8,700 people, and part of a forest preserve that is one of the last habitats of the endangered western chimpanzee.  Development that destroys forests is not sustainable—it is not even development.

If what gets measured gets done, then the absence of aggregated forest data among the MDBs is not a good sign.  But this absence is not complete, and one goal of BIC’s report and scorecard is to share what has been done, and the potential to converge around goals that are already shared. As Panmao Zhai, Co-Chair of IPCC’s Working Group (I) on the physical science of climate change, said:

“There is real potential here through more sustainable land use, …eliminating the clearing and burning of forests, preventing over-harvesting of fuelwood, and reducing greenhouse gas emissions…to address land related climate change issues…There are things we are already doing… but [they] need to be scaled up.”

 Are the MDBs listening? 

Get the full story in our report: MDBs and Global Forest Commitments: What’s the Score?