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Zero deforestation
and low emissions
development
Public and private
institutional arrangements
under jurisdictional
approaches
Pablo Pacheco1, Otto Hospes2 and Ahmad
Dermawan1
1 Center for International Forestry Research (CIFOR)
2 Wageningen University & Research (WUR)
Setting the stage:
Initiatives to achieve global
sustainabilitygoals
Debates on the challenges and opportunities for
sustainable agricultural production and natural
resources management - mainly of land, water,
and forests - have intensied in recent years. This
is due not only to a more prominent climate
change agenda, aimed at mitigating greenhouse
gas (GHG) emissions to limitglobal warmingto
less than1.5oC [1]; it is also due to the recent
Sustainable Development Goals (SDG) agenda
[2]. The role that forests play in climate change
mitigation is at the heart of climate change
and sustainability debates; as such, reducing
the pressure that ‘forest-risk’ commodity crops
(e.g. palm oil, cocoa, soy, beef, timber) place on
forests is key [3]. Forest conversion contributes
to soil erosion, reduces water quality and supply,
leads to biodiversity loss and increases carbon
emissions [3]. An issue of increasing concern is
how to support the meaningful integration of
smallholders in these commodity supply chains, as
well as improve their capacity to capture greater
market benets [4].
For zero deforestation and low emissions
development (LED) strategies to succeed, they
should contribute to broader objectives of
food and energy security, ensure agriculture is
sustainable and natural resources are conserved,
28 November 2017
Paper for discussion
Zero deforestation and low emissions development
2
in tropical countries, such as Brazil and Indonesia, a
major proportion of investment was still directed to the
most protable land uses, such as pulp and paper, soy
and oil palm plantations, and processing facilities [6].
This called for increased attention on nding ways to
disrupt the economic forces shaping land use change
and forest landscapes transformations, through both
demand- and supply-side interventions [7].
In the context of the Paris Climate Agreement,
national governments have committed to reduce
their emissions under their National Determined
Contributions (NDC), but often politics tends to
constrain more aggressive implementation that shifts
away from business-as-usual pathways. An increasing
number of sub-national level governments, grouped
into the ‘Governors Climate and Forests Task Force’,
have started to develop some jurisdictional approaches
to REDD+, and are now actively embracing strategies
to transition to low emission development goals [8].
In the private sector, major corporate groups have
been making commitments to sustainability in their
operations, aiming to reduce their environmental
footprint. Notably, the Consumer Goods Forum (CGF),
followed by New York Declaration on Forests (NYDF) [9],
have triggered commitments from global corporations
and traders to delink their supply chains from
deforestation. Major palm oil groups in Indonesia have
additionally committed to ‘No Deforestation, No Peat,
and No Exploitation’ (NDPE) policies [10].
Private sector initiatives aimed at deforestation-free
supply tend to rely on voluntary private standards
and certication, and supply chain self-regulations
(e.g. sustainability policies and codes of conduct)
that enhance their environmental performance.
Governments, in turn, base their actions on formulating
and implementing ‘stick and carrot’ policies at
national to sub-national levels [11]. Building on initial
proposals aimed at jurisdictional approaches to REDD+
implementation at multiple levels [12], and linking
with growing debates on how to ensure sustainability
in specic landscapes, ideas of landscape governance
have become more prominent [13, 14]. Increasingly,
ideas of landscape governance are intercepting with
ideas of value chain governance, under the label of
‘jurisdictional approaches’.
These jurisdictional approaches are becoming the
new mantra for achieving zero deforestation, and
making progress towards LED at a sub-national level
(either in states, provinces, districts or municipalities).
Jurisdictional approaches lie at the intersection of three
approaches, specically: landscape approaches for
managing the trade-os between conservation and
development; jurisdictional approaches for addressing
competing land uses under REDD+ implementation;
and voluntary corporate sustainability eorts to
whilst also improving local wellbeing and greater social
inclusion. Thus, along with reducing deforestation
rates, there is also a need to increase the productivity
of already-cleared forestlands, and ensure that
smallholders and local populations can benet from
markets opportunities, while maintaining their values
and sustaining their livelihoods. This is an enormous
challenge, yet increasingly embraced by public and
private actors from global to sub-national levels. This
paper examines the scope for synergies between value
chains and landscape perspectives under a jurisdictional
approach, and their potential for addressing some key
social and environmental challenges when moving
towards zero deforestation and LED strategies.
We argue that three options are likely to emerge when
linking corporate eorts to sustainability and public
regulations in specic landscapes: 1) co-existence
between private interventions and government actions
in sub-national jurisdictions, 2) alignment of voluntary
sustainability interventions, including NGOs initiatives
and government actions, and 3) orchestration to fully
integrate public and private interventions across diverse
dimensions. Identifying these options enables us to ask
questions on their likely feasibility, eectiveness, and
limitations in addressing key social and environmental
sustainability challenges, while managing associated
development and conservation trade-os.
The following four sections rst explore the dierent
governance approaches and their interactions
in terms of working towards commitments to
zero deforestation and LED. The main social and
environmental sustainability challenges to overcome
are then examined. Building on previous assessment of
challenges, we then discuss the potential and limitations
of dierent jurisdictional-based approaches to address
such challenges, before the last section provides some
concluding remarks.
What is new? Jurisdictional
approaches to zero
deforestation and LED
Initial eorts to support reduced carbon emissions,
and transition to low emissions development,
were undertaken under ‘reducing emissions from
deforestation and forest degradation’ (REDD+) initiatives.
Key actions were aimed at adjusting national regulatory
frameworks to reduce forest conversion, and thus to
generate carbon credits under the expectations of
a global carbon agreement. These eorts, however,
showed their limitations when competing with business-
as-usual incentives [5]. While some resources were
invested in readiness actions for REDD+ implementation
Pablo Pacheco, Otto Hospes and Ahmad Dermawan 3
Supply chain interventions aim to reduce the social
and environmental externalities of production,
processing and trade, while sustaining economic
prots. Landscape-related interventions aim to sustain
the provisioning of ecosystem services in the landscape,
while supporting local livelihood and development
options. Supply chain interventions increasingly focus
on achieving deforestation-free supply through the
adoption of production standards and traceability,
but often neglect power and political economy
dimensions [4, 18]. Landscape-related interventions
often embrace multiple actors and value chains, and
privilege multi-stakeholder processes for territorial
planning; they set up incentives and mechanisms
for harmonizing conservation and development and
managing their trade-os, but tend to over-emphasize
public interventions, and neglect connections with
downstream markets and investments [19].
Main challenges in achieving
sustainable supply and
landscape management
Indonesia is at a crossroads in its attempts to continue
to develop the national economy; the country is
trying to lift people out of poverty without increasing
the threat to environmental integrity or aecting the
livelihoods of traditional rural people. This has proven
a dicult task, due to the inherent trade-os between
economic growth and environmental impacts. In
addition, Indonesia made strong commitments towards
climate change mitigation, notably its commitment to
reducing emissions by 2020 by 26% below business-
as-usual (BAU) projections, or by 41%, with foreign
assistance [20]. However, carbon emissions continue to
grow, particularly due to emissions in energy and land
use sectors, as well as forest res. In spite of poverty
reduction gains, rural poverty is still widespread [21]. In
this context, there are some key social and economic
challenges when it comes to achieving landscape
sustainability.
Agricultural expansion has major impacts
on environmental integrity
Agricultural expansion occurs at the expense of
forest conservation, aecting the integrity of natural
ecosystems. The expansion of plantations, particularly
pulp, paper and oil palm, have led to major forests
and peatland conversion [22]. At present, most forest
conversion is due to oil palm expansion, associated
not only to the development of large-scale plantations
but also the expansion of smallholder plots [23]. The
main environmental impact arising from plantation
expansion is the associated carbon emissions; oil
eliminate deforestation from their supply chains [15].
These perspectives are converging in dierent ways in
diverse contexts, and still may have dierent meanings
for dierent landscape stakeholders [16]. Underlying
motivations are varied: certication bodies are looking
for ways to scale up the uptake of sustainability
standards; companies are looking to trace their supply
from smallholders in more cost-eective ways; investors
are looking for production zones with comparatively
lower risks; and governments are trying to improve
the performance of public investments, while at the
same time attract foreign investments and international
cooperation.
Various initiatives and projects aimed at implementing
REDD+, promoting integrated development and
sustainable landscapes, are now claiming to adopt
jurisdictional approaches. This is driven by certain sub-
national jurisdictions having regulations to incentivize
lower carbon emissions, sustainable agriculture and
conservation, coupled with company policies aimed
at deforestation-free sourcing and traceability. Some
suggest the most notable commonality in jurisdictional
approaches is their dierence, since each initiative
is uniquely tailored to the particular government,
commodities, communities, and challenges of the
jurisdiction, with the most important feature being
to drive dialogue and unite goals across business,
government, and community stakeholders [15].
A recent study suggests that there are multiple
jurisdictional initiatives underway around the world. In
spite of their dierences, the main commonalities of
these initiatives are 1) seeking to align governments,
businesses, NGOs, local communities, and other
stakeholders around common interests in conservation,
supply chain sustainability, and green development,
2) focusing on the political level at which land use
decisions are made and enforced, and 3) advancing
land use planning of production and protection areas
with geographically tailored policy interventions,
market incentives, and climate nance [17]. These
jurisdictional initiatives can be grouped into three
categories. First, demand-side initiatives that aim to
source from jurisdictions that demonstrate improve
sustainability. Second, supply-side models that aim to
show the market that sustainability is being pursued,
mainly linked to wider uptake of sustainability systems.
Third, place-based initiatives that bring together
supply and demand-side stakeholders to agree on
sustainability goals and implementation strategies [17].
This is however a very simplistic classication, which
fails to unpack the approaches being adopted under
each developing model.
At the core of jurisdictional approaches are supply
chain and landscape-related interventions. The two
have potentials on their own, but also face limitations.
Zero deforestation and low emissions development
4
palm expansion into forest and peatlands results in
signicant carbon debt. Carbon debts are especially
high on converted peatlands, due to peat oxidation
and land subsidence [24]. Agricultural commodity
expansion equally results in the expansion of roads
and processing facilities, which in turn attracts large
numbers of immigrant farmers, leading to further
deforestation, and often to soil degradation and
water pollution [25]. In contrast, eective actions to
reduce deforestation constrain road expansion, create
protected areas, insulate forest frontiers, enforce laws,
and grant local tenure rights [26]. A way out of this
dilemma is to put in place measures that prevent the
expansion of agricultural production into forests and
peatlands, while stimulating yield growth in already-
cleared land [25].
Smallholder farmers are under pressure
to sustain biodiverse systems
The impact of large-scale commercial activity
on the ecosystem tends to be dierent from the
impact of mixed cash and subsistence smallholder
farming systems, due to the intensity of resources
used in each system. Commercial agriculture tends
to homogenize local practices and involve supply
chain smallholders under not always favorable
benet-sharing agreements. In contrast, less integrated
subsistence farmers tend to preserve production
practices that value ecosystem diversity [27]. Diversied
farms contribute to more diverse farming landscapes,
increasing biodiversity and stimulating interactions
between dierent species; this increases the resilience
of livelihood strategies and helps to protect natural
systems and preserve biodiversity. The expansion
of commercial agriculture tends to homogenize
landscapes, with high inputs and capital intensive
systems that rely on chemical fertilizers and pesticides
[28]. Industrial agricultural expansion enables fewer
actors to capture much of the agricultural value
generated, reinforcing their economic and political
power, and thus their ability to inuence land
allocation, and the governance of land and landscapes
by establishing, in some cases, very extended
patronage systems [29].
Farmer performance is aecting more
equitable benefit sharing
When farmers get involved in commercial agriculture,
they tend to underperform compared to industrial
producers, which translates into lower yields.
Smallholder yields from oil palm fresh fruit bunches
(FFB) are in practice between 6% and 40% lower
than best practice reference yields, with commercial
operations typically exceeding smallholder yields
by 46-116% [30]. The lower yields obtained by
smallholders leads to a reduction in the capture of
benets from FFB production, which also decreases
the land and labor returns generated by small-
scale growers. This situation is often due to the
underperformance of smallholders, who often have
planted low quality seedlings yielding lower FFB
production [31]. Farmers may also lack the resources
to purchase fertilizers and other inputs required to
properly manage the plantations, yet they also may
not be willing to invest in low productive plantations,
instead nding their prots reasonable. Increasing
smallholder yields is expected not only to help
improve the competitiveness of the overall sector,
but also to reduce land pressure and enhance rural
incomes [32].
Finance and investment face higher
risks due to weak governance
Finance still tends to ow to economic activities
yielding higher short-term benets, including
more specialized commercial agriculture, as well
as infrastructure that enables private investments.
While climate nance has gone to support some
conservation-based initiatives, the amount
disbursed is minimal when considering the total
nancial ows invested in Indonesian landscapes.
Yet increasingly, government attempts to regulate
agricultural expansion (particularly oil palm
plantation in peatlands), as well as market changes,
are increasing the regulatory and nancial risks of
loans to agriculture, particularly for banks exposed to
upstream production risks [33]. This is exacerbated by
land conicts between companies and indigenous,
often local marginalized, populations who typically
lack secure tenure rights [34, 35]. Paradoxically, many
companies have preferred to establish their oil palm
plantations in peatlands and forests due to the
reduced likelihood of experiencing land conicts,
and the opportunity to recuperate plantation
establishment costs through timber extraction [36].
Potential and limits of dierent
jurisdictional approaches
Corporate sustainability initiatives and government
actions interact in dierent ways when trying to
address zero deforestation and LED strategies. We
argue that three types of interactions are likely to
occur in landscapes: 1) co-existence between
private sustainability interventions and government
actions in sub-national jurisdictions, with relative
independence from one another; 2) alignment
between voluntary sustainability initiatives, including
NGOs interventions and government actions, in order
to achieve shared social, economic and environmental
Pablo Pacheco, Otto Hospes and Ahmad Dermawan 5
goals; and 3)orchestration of hybrid public and
private mechanisms and incentives, to accelerate
the transition to more sustainable landscapes and
manage trade-os, to achieve social, economic and
environmental objectives. These three options do not
necessarily represent clear-cut situations, and there
can be overlaps among them.
Below we describe in more detail each of these
options, and then explore their likely eectiveness
in terms of addressing the social and environmental
sustainability challenges identied in the previous
section. We then look at the potential and limitations
of these three jurisdictional-based approaches.
Co-existence between private sustainability
standards and government action: this is the most
likely basic model in jurisdictional initiatives, which
consists of company initiatives co-existing with sub-
national government actions, but with little interaction
between the two, despite the fact that both may
be working towards the same objectives. In several
sub-national jurisdictions, companies are putting in
place systems to trace their sourcing, and monitor
supplier performance, but they are disconnected
from any government actions. In turn, sub-national
governments continue their own strategies to
develop plantations, protect peatlands, support
conservation forests, but do so in relative isolation
from private sector commitments in their jurisdictions.
This means that both government and private actors
each progress at their own pace; the actions of each
not necessarily aecting performance of the other.
Equally, the primary decision-making authority may
not be at sub-national level; targets tend to be set up
independently, either by a company manager or by
government ocials, with a lack of multi-stakeholder
dialogue platforms at jurisdictional level.
Alignment between voluntary sustainability
initiatives and government action: this often takes
place when companies, at the time of implementing
their commitments, recognize the limitations of their
own actions, and realize the need for coordination.
The need to reduce encroachment or the incidence
of forest res in company concessions, for example,
calls for government action on land planning and
tenure registration. Equally, when companies face the
need to upgrade smallholder production practices,
this calls for government action on more eective
agricultural extension services. Governments may
equally need companies to assist by not purchasing
produce originating from illegally encroached public
lands, or other additional measures to help in law
enforcement that could reduce external investor
risks. In such cases, coordination works through
more formalized channels, built into sub-national
government decision-making systems, with some
authority held by companies’ local managers. In several
cases, NGO projects tend to bridge the gap between
company managers, public ocials, and civil society
organizations, as well as help to operationalize their
commitments.
Orchestration of hybrid public and private
mechanisms and incentives: this may imply a
dierent range of actions, including: agreeing on
planning processes and common targets (e.g.
through participatory planning); deciding on shared
mechanisms to ensure sustainable produce (e.g.
joint or complementary production standards);
providing private incentives for protection of
environmental public goods (e.g. traceability systems
with compensation for good performance); providing
nance under mechanisms that share costs and risks
(e.g. blended funds); and joint monitoring frameworks
to measure progress at jurisdictional level. Many
of these incentives and instruments, however, are
designed by authorities above the jurisdictions. In
these cases, orchestration at sub-national jurisdictional
level is needed for eective implementation,
enforcement and monitoring, in ways that satisfy
the interests of dierent stakeholders, and not only
those of the most powerful players. This may also
involve mechanisms for expanding social investments
that compensate more marginalized groups when
conserving natural infrastructure, while at the same
time extending their access to energy, and other social
infrastructure (health and education), initiatives which
private investments are often not interested in.
How eective are the dierent systems in addressing
sustainability challenges? This question likely requires
empirical evidence if it is to be answered well. Yet,
achieving the objectives of zero deforestation and
LED strategies will no doubt depend on how far
government commitments go in embracing low
emission development goals that entail social inclusion
targets, as much as it will also depend on private
initiatives moving beyond the connes of their own
plantations, supply chains and suppliers.
The option of co-existence is likely to be most
ecient for companies interested in cleaning their
supply chains (e.g. palm oil), as they can move
ahead in implementing their traceability and the
risk management systems of their main second and
third-party suppliers. However, this option may not
necessarily help to improve the sustainability of
smallholder farming systems in the long run, nor to
reduce conicts with local populations or diminish
territorial risk linked to poor law compliance. That is,
unless companies make investments to upgrade their
supply chain through more meaningful involvement
of smallholders, however this may be costly if
sub-national governments do not invest in service
Zero deforestation and low emissions development
6
provision. The attraction of this option, however, is
that it involves lower transaction costs, makes impact
accounting simpler, and reduces dependence on
government and NGO actions.
The option of alignment may help to design and
implement mechanisms that better share the costs
involved in halting deforestation, through supporting
uptake of better management practices in protable
crops (e.g. palm oil), providing incentives for good
environmental performance linked to the use of agreed
sustainability standards (e.g. RSPO, ISPO), and reducing
the social impacts of agricultural expansion by
protecting local people’s rights. Yet, alignment will likely
have a limited impact on moving towards sustainability
beyond a few commodity crops that generate higher
economic value in the landscape. In a few cases where
companies are interested in building local alternative
livelihoods, alignment could lead to exploring new
business opportunities.
The option of orchestration may oer larger potential
to accelerate impacts in some specic value chains,
but it also entails higher short-term transaction costs.
It does, however, have the potential to trigger public
and private action in specic jurisdictions - and
beyond - towards more integrated approaches that cut
across diverse supply chains. As such, it may allow for a
move beyond supply chains yielding higher short-term
economic benets, to instead look for more integrated
ways to support diversied farming systems. It may
also facilitate implementation of nancial schemes
supporting nature-based business options that are
not triggered by demand-driven value chains, but that
are instead based on the capabilities of smallholders
or indigenous people. The latter, however, implies the
risk of additional institutional confusion and further
transaction costs that public and private actors will
likely not be willingto pay for.
The main limitations of the jurisdictional approach are
operational. When examining the integrated landscape
approach experiences on which the jurisdictional
approach built, there is reluctance among individuals,
companies and other organizations to operate outside
of their regular realms of operation and expertise,
and thus undertake collaborative action to achieve
common goals. Equally, connecting dierent economic
sectors and diverse societal demands has proven
dicult [19]. Improvements in one landscape can lead
to leakage from well-performing jurisdictions to poor
ones which face less pressure to uptake sustainability
practices [11]. In spite of such limitations, jurisdictional
approaches have considerable potential to meet
social and environmental objectives at sub-national
level, while aiding national government eorts, and
transnational corporate initiatives to address ongoing
global challenges.
Concluding remarks
When it comes to harnessing the benets of both supply
chain governance and landscape governance in order
to meet zero deforestation and LED challenges, the
potential and limitations of a jurisdictional approach
are still open questions in need of empirical answers.
We believe their potential depends on the specic
interactions established between voluntary private
initiatives and government actions. Currently, building a
jurisdictional approach that combines vertical value chain
interventions with horizontal landscape governance
is an aspirational target, loaded with expectations on
likely eectiveness. We suggest that a situation of simple
co-existence between public and private actions may
lead to achieving zero deforestation, but it may not
necessarily lead to achieving LED, and is even less likely
to achieve more ambitious sustainability goals. The
latter may require greater alignment and orchestration
eorts, in order to complement more actively public
and private interventions. This could add negotiation
and transactions costs, with long-term benets that may
not compensate for short-term costs, although dierent
actors may balance costs and benets in dierent
ways. Therefore, it is important that processes aiming
to build jurisdictional initiatives on zero deforestation
and LED consider closely the aspirations of all
stakeholdersinvolved.
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Center for International Forestry Research (CIFOR)
CIFOR advances human well-being, equity and environmental integrity by conducting innovative research, developing
partners’ capacity, and actively engaging in dialogue with all stakeholders to inform policies and practices that aect forests
and people. CIFOR is a CGIAR Research Center, and leads the CGIAR Research Program on Forests, Trees and Agroforestry
(FTA). Our headquarters are in Bogor, Indonesia, with oces in Nairobi, Kenya, Yaounde, Cameroon, and Lima, Peru.
The CGIAR Research Program on Forests, Trees and Agroforestry (FTA) is the world’s largest research
for development program to enhance the role of forests, trees and agroforestry in sustainable
development and food security and to address climate change. CIFOR leads FTA in partnership
with Bioversity International, CATIE, CIRAD, ICRAF, INBAR and TBI.
of a smallholder typology. Working paper no. 210.
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