Helen Clark: Speech at the “Towards a Deforestation-Free Future: The Demand-Side Challenge” Side Event

Sep 22, 2014

Helen Clark, UNDP Administrator
at the
“Towards a Deforestation-Free Future:  The Demand-Side Challenge” Side Event
United Nations, New York

It is a great pleasure for UNDP to be co-hosting this event on the demand side measures needed to support a deforestation-free future. At the outset, can I acknowledge both Pak Kuntoro and Pak Heru of Indonesia for their leadership in driving the reforms necessary to reduce deforestation in Indonesia. Their work is critical for Indonesia’s progress towards a low-carbon economy, a key aspect of which is sustainable forest management.

To date, the global conversation on climate change mitigation has focused almost exclusively on supply side measures. They are of course important, but they will not be sustained nor have the impact they could have unless efforts are also made on the demand side.

Demand for agricultural commodities is driving the clearance of tropical forests at an immense scale and pace. Meeting that demand sustainably is critical for protecting the world’s remaining forests. The impact of deforestation commitments made during this Climate Summit will depend on whether the demand for sustainable products can be increased.

Succeeding with deforestation-free supply chains will depend on actions taken at many levels. The palm oil producer, for example, may be a small holder needing income to cover basic family needs, or may be a large global company wanting to be profitable if it undertakes to grow, source, and produce sustainable products.
Demand-side interventions are not new - there are many examples of them being applied to promote environmental sustainability and social responsibility, including interventions aimed at creating awareness and demand for sustainable commodities, such as the major internationally recognized commodity roundtables and certification schemes.

Now these kinds of measures need to move beyond niche markets into mainstream markets.  To achieve that, ways need to be found to promote forest protection as a new way of doing business – and not as a threat to business.

That will require moving demand-side interventions beyond the important ethos of corporate social responsibility, and positioning them as a means to achieving business transformation for competitiveness. Making commitments to sustainability can provide momentum for new business models, rather than being seen as placing constraints on business profitability. This change of perception is important in ensuring that markets for sustainable products become self-sustaining.

The dynamics of global markets for agricultural commodities are now being shaped by the growth in demand in emerging economies in Latin America, Africa, and Asia. The move to new business models based on sustainability needs to gain more traction there, as it already has in Europe and North America.

Governments have a critical role in enabling and scaling-up demand side interventions. It is their responsibility to ensure fair and transparent methods of land management; transparent, accountable forest governance; and predictable and robust policy frameworks.

Demand side measures need to be compatible with the aspirations of producers across the supply chain. In Indonesia, just under half of all palm oil production comes from rural smallholders. Mechanisms for gathering the inputs of these producers need to be developed and be complemented by capacity-building support for them to develop the means of producing certified sustainable products.

UNDP puts great emphasis on pursuing environmental conservation while also supporting Indonesian smallholders to improve their livelihoods from palm oil production. On their own, many smallholders cannot make the investments necessary to shift to ‘clean and transparent’ palm oil production - often because of their lack of clear and secure land tenure, which in turn impedes their access to finance. UNDP in Indonesia is a partner of the Ministries of Agriculture and Forestry, the private sector, and NGOs in establishing the Sustainable Palm Oil Initiative as a national platform to address such issues.

Demand and supply are heavily intertwined. Strong demand for sustainable commodities without support given to smallholders to enable them to supply them has the potential to marginalize the weakest producers. As well, lack of demand and commitment from wholesale buyers and consumers puts a disproportionate burden on commodity-producing countries which are trying to move to sustainable production.

The process of developing successful deforestation-free supply chains shows how complex achieving sustainability can be. It requires inspirational leadership, and co-ordinated and innovative action which brings together the very wide range of stakeholders. Yet, with a commitment to building partnerships for sustainability, a deforestation-free future with secure livelihoods for the smallest producer is attainable.

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