It’s a real honour to have this opportunity to address the Timber Trade’s annual dinner this evening. I want to talk mostly about forests and timber as that is your bread and butter. But, let me start by setting that in the wider context of climate change, which is an extremely high priority for this government and for me as International Development Secretary.
A hundred years ago this month, Robert Scott and his comrades perished on their ill-fated expedition to the South Pole. Exhausted, starving, frost-bitten and snow-blind they would surely have struggled to comprehend a future which encompassed the threat of global warming.
And when, fifty years later, London was left reeling from the Great Smog, few had the foresight to look beyond the immediate tragedy.
We’ve come a long way since then, and today, the consequences of global warming are widely recognised as one of the major threats to humanity, to global prosperity, to all that we hold dear.
We understand more about its causes, too. A recent study concluded that at least three quarters of the temperature rises of the last sixty years is due to human activity.
We’ve become armchair experts, with terms like ‘climate change’ and ‘ozone layer’ bandied around in bars and on buses. Especially when it rains in June or the sun shines in October…
But greater public awareness doesn’t mean that climate change is any less a threat. Global emissions and global temperatures are rising. And left unchecked, they will continue to rise.
As Development Secretary, what is crystal clear to me is that the world’s poorest people will be hit first and hardest, with droughts, floods and famines set to increase in frequency and intensity.
The numbers at risk of hunger as a result of climate change are projected to increase by between 5 and 20 per cent by 2050, while in Sub-Saharan Africa, 10 million more children are expected to be malnourished.
They won’t be the only ones affected. The renowned economist, Lord Stern, concluded that if we fail to take action, climate change will cost the world between 5 and 20 per cent of its global GDP.
Conversely, Lord Stern estimated that keeping emissions to safe levels and helping developing countries to adapt to climate change will cost around 1-2 per cent of GDP. In other words, inaction today will cost us more money tomorrow. Global growth will be stunted and prosperity undermined. Britain’s own economy will suffer.
The UK government is seized of this and we’re as ambitious as we are restless. We want to be the greenest government ever and to push others to act too. We’re pushing hard to secure an ambitious global deal on emissions, one that prevents global warming from rising above a global average of 2 degrees while also protecting poorer countries as they adapt to the impacts of climate change. We’re doing this not just because our responsibility to the world’s poorest people demands no less, but because it’s also in our own interests. We cannot have food security, water security, energy security - or any form of national security - unless we tackle climate change and promote inclusive green growth; the Rio+20 conference later this year is an opportunity that we cannot afford to miss.
On the other hand, important though a deal may be, we shouldn’t play a waiting game. There are other things we can and should be doing now, whether it’s supporting the most vulnerable, encouraging green growth or protecting the world’s forests. By doing this we can make a real difference to people’s lives while at the same time building global confidence and helping to bring a binding deal closer.
That’s why in the Comprehensive Spending Review, the Chancellor allocated £2.9 billion to a new Government-wide International Climate Fund. Let me set out for you just a few of the results this investment will achieve over the next three years.
It will leverage enough private finance to:
- avoid an amount of CO2 equivalent to that emitted in a typical year by 6.6 million European cars;
- help create 7,000 mega watts of clean energy and;
- create 40,000 new jobs.
In Bangladesh, it will help 15 million people by building embankments and shelters, raising homes above flood levels and promoting climate-resilient crops.
And through the Clean Technology Fund it will provide enough clean energy to power 16 million households.
Leveraging private investment is important because we know that public finance alone will not solve climate change. Only the private sector has the resources for the massive investment that’s needed. That is why we are engaging with some of the most significant finance and investment institutions in the City of London through the Capital Markets Climate Initiative (CMCI), to understand the barriers to scaling up private investment and identify innovative solutions to unlocking flows of finance. Further, with the support of the International Climate Fund, there are huge opportunities -and indeed a crucial need - for the private sector to invest profitably in climate-friendly businesses, including, developing clean energy from solar power. At Davos this year, I launched an exciting programme that puts this into practice: the CP3 programme will mean that every £1 of UK taxpayers’ money, has the potential to generate £30 of private climate-friendly investment.
Through our support for the International Climate Change Fund we’re also helping to protect up to 39 million hectares of forest and the 1.2 billion people who rely on them for their livelihoods.
So let me turn now to the subject of forests and of timber.
Forests and timber
Nine out of ten of the world’s poorest people rely on forests for their livelihoods. Forests also provide a home for more than half of our land-based plant and animal species.
But, deforestation is currently running at 13 million hectares a year. That’s an area seven times the size of Wales, wiped out. Last year, this year, next year.
This level of deforestation is contributing a massive 17 per cent of all human-induced, global greenhouse gas emissions. More, in fact, than the entire global transport sector. Or, to put it another way, the global equivalent of a forty a day smoking habit…
Take Indonesia, the third most forested country in the world and the fourth most populous. The rate of destruction of Indonesia’s forests is frightening: some fifty per cent over the last fifty years or so. Sometimes described as the “green lung of the world”, Indonesia has been allocated priority status by the UK Government’s International Climate Fund.
It’s because I am so convinced of the importance of these issues that I visited the country just a month ago to see first-hand some of the challenges it faces. With the Minister of Forestry, I went deep into the forest; I went to a saw mill; I planted a tree; I met the people who rely on the forests to survive; and I met the business leaders who - like you - have the power be a force for change.
There can be no lasting solution to climate change unless we ensure that rapidly-developing countries like Indonesia can grow their economies on a low-carbon basis, including managing their forests well.
For all these reasons, tackling deforestation features highly on my list of priorities as I think about what DFID must do. It’s also high on the agenda for the UK’s International Climate Fund - which is a cross-Government effort between DFID, DECC and Defra; and it’s high on the agenda in international climate change discussions.
Let me tell you now a bit more about how the British Government is approaching the challenge of forestry, through the ICF and policy work. We’re tackling it on several flanks.
1) First, we’re helping governments improve the way they manage their forests. The new Forest Governance Markets and Climate Programme, for example, is helping countries to set up the systems that will promote best practice in forest management. This includes activities such as: mapping forests and forest-use, ensuring that the legal processes for allocating and monitoring licences to companies are regulated, transparent and corruption-free; and making sure the communities that rely on the forests are part of the decision-making process.
In East Kalimantan, I met indigenous Dayaks from Koutai Barat who live from the fruits, medicines, timber, and rattan palms which they grow in their forest gardens. For them, proper management of the forests is a matter of life and death.
You have a role to play in all this. Your experience of developing your own due diligence practices will provide an invaluable insight. Indeed, I know the Federation is already working with timber and wood associations in China, as well as Ghana, DRC and Indonesia.
Sound management of forests will also rely on us making progress internationally too. Specifically, there is considerable consensus amongst countries on the need for a forest-preserving scheme called “REDD plus” - a colourful acronym which stands for “Reduced Emissions from Deforestation and forest Degradation”.
2) Second, we need to continue to spearhead efforts to tackle illegal logging - a widespread practice that has serious implications for the very poor and for our chances of protecting forests globally.
I was struck by the visit I made to the Balikpapan Forest Industries mill. BFI specialise in plywood and veneer and were one of the first companies to receive a legal timber verification certificate under a scheme which my department has supported.
I also saw how the timber was marked with a special barcode which meant that it could be tracked “from stump to store”. I spoke with local loggers who were enthusiastic about the scheme and confident that it would vastly reduce the opportunities for timber trafficking.
I think that this kind of thing is extraordinary - a simple bit of technology bringing a level of transparency and scrutiny like never before. And it’s cost-effective. Every pound invested in tackling illegal logging earns another £6 in timber revenues for those developing countries that produce timber and wood products. That’s more money into cash-strapped exchequers, and fewer emissions. It’s a win-win.
3) Third - and linked to illegal logging - we need to target and harness the power of consumer behaviour. Part of this involves raising consumer awareness. How many people, for example, know that a timber building stores carbon? More than 750 tonnes in the case of the Open Academy in Norwich.
We need to encourage responsible retail practices too, not just here in Britain but in other countries that import timber or timber-related products. You hardly need me to tell you that if consumers demand products - timber, or otherwise - that are sustainably-sourced, then that is what business will supply.
I’m particularly grateful for the way in which your members have worked with us to take forward the new EU Timber Regulation which will be implemented next March and which makes it an offence to be the first to sell illegally-harvested timber in Europe.
I also want to applaud you for enforcing a Responsible Purchasing Policy amongst your membership, driving demand for legally-certified wood. In particular, let me here pay tribute to the leadership shown by Peter Latham, of James Latham plc, a company which I’m told is one of the oldest family-businesses in the trade, in promoting this policy and schemes for certification of sustainable forest management.
I welcome all you’ve done and encourage you to do more. You are uniquely placed to advocate and persuade others of the importance of responsible trade. You are proof positive that profit and sustainability are not mutually incompatible outcomes.
So let me conclude by making clear that we, in Government, are walking the talk. In keeping with our pledge to be the greenest government ever, the Olympic Delivery Authority insisted that firms tendering for construction used only sustainably-sourced timber. I applaud the efforts of Peter Bonfield here who worked on this project.
What a powerful message to send the world. To quote one of your catch phrases: “Wood is indeed good”!
Ladies and Gentlemen, thank you again for your hospitality and for the opportunity to talk to you this evening. This is a subject close to my heart and one that must continue to be discussed at an international level.
I am heartened by your clear commitment to, and respect for, the natural environment. I look forward now to working with you to realise an even greater level of ambition.
We should not underestimate the scale of the challenge ahead of us: there are few greater facing the world today. We cannot afford to let that deter us. By raising the bar high and committing to our goal we can make this a world which future generations can enjoy.