I am delighted to be here today at The Forest Trust conference on sustainable oil palm, and to have the opportunity to join your discussions about this important and challenging area of work.
At the end of another British winter, who could imagine that we would be crying out for more rain, in this country renowned for its poor and changeable weather?
Yet that is the worrying situation that we find ourselves in, as drought sets in across large swathes of England. Hose pipe bans provide a small reminder - if one were ever needed - of the fundamental importance of climate to our lives.
Stopping deforestation is a vital part of the global response to climate change, and we all have a part to play in rising to this challenge.
The green lung of our world
Tropical forests are sometimes referred to as the green lung of our world, with good reason. Rainforests remove almost 2 billion tonnes of carbon per year from the atmosphere and store one quarter of terrestrial carbon. About 1.2 billion poor people directly depend on forests for their livelihoods, and they are also home to over half of land-based plant and animal species.
But forests are under increasing pressure and 13 million hectares (equivalent to the land area of England) are cleared annually. This deforestation accounts for 17% of global greenhouse gas emissions, more than emissions from global transport. Avoiding dangerous climate change will be harder if we don’t halt deforestation.
And that takes me onto the subject of today’s conference, which is to look at a powerful and practical way of taking action to reduce deforestation.
With this in mind, I would like to use the next few minutes to set out three points about how the UK Government is responding to the challenge of slowing global deforestation.
New International Climate Fund
The first point concerns the way in which the government is using our international climate finance to help poor countries tackle deforestation.
On this we are ambitious and we want to push others to act too. That’s why the government has allocated £2.9 billion to a new International Climate Fund, which we will invest to help protect millions of poor people from droughts, floods and other extreme weather events; assist poor countries develop in ways that avoid or reduce harmful greenhouse gas emissions; and help to protect the world’s forests and the livelihoods of 1.2 billion people who depend on them.
The new Forest Governance Markets and Climate Programme, supported with £60 million from the International Climate Fund, is helping countries to continue and accelerate efforts to tackle illegal logging - a widespread practice that has serious implications for the very poor and for our chances of protecting forests globally.
This programme is supporting supply chain traceability for timber, using barcode systems which allow timber to be tracked “from stump to store”. This shows how it can be done - a simple bit of technology bringing a level of transparency and assurance like never before.
The assurance which traceability provides helps developing country companies to access UK and EU markets, and provides UK companies with a guarantee of the legal origin of the product, helping to protect their valuable brands from reputational damage and adding value to their businesses.
Experience gained from working on timber supply chains holds important lessons for oil palm and other commodities associated with deforestation.
The British government intends to use this experience to make progress in tackling other causes of deforestation, through discouraging illegal and unsustainable behaviour and encouraging trade in legal and sustainably produced commodities, drawing on the resources and opportunity presented by the International Climate Fund.
Our own impact
The second point I would like to make concerns the importance of reducing the impact that our own consumption and purchasing decisions have on forests.
Forests are an emotive issue for the British public. My own constituency of Eddisbury includes the Delamere Forest Park, and this is a topic of frequent and hot correspondence with my constituents.
This British passion for trees extends overseas, and there is deep public concern about the loss of tropical forests. Given this passion, it makes little sense for us to contribute indirectly to the destruction of forests through everyday purchasing decisions.
The same applies to the UK government. We are a strong advocate for a global climate change agreement that includes ambitious targets to halt deforestation. We use hard-earned taxpayers money to tackle deforestation around the world, and we should not undermine these efforts through purchase of products associated with illegal or unsustainable deforestation.
Some countries, including the UK, have taken steps to reduce the extent to which they “import” deforestation, mainly through a focus on tackling illegal logging. The UK government was the first of eight EU governments to introduce a public procurement policy that requires central government departments to procure “legal and sustainable” timber. A new EU Timber Regulation, strongly supported by the UK, will make first sale in Europe and the UK of illegally logged timber a crime from March 2013.
Some say that oil palm is a tougher challenge than timber. The product is ubiquitous in our supermarkets and larders. A survey by the Independent newspaper in 2009 found that it was used in 43 out of Britain’s 100 best-selling grocery brands.
It is certainly harder to make the connection between a bag of raisins, a tub of margarine or a lipstick, and the rapid loss of the world’s last remaining tropical forests on the far side of the world. But make this connection we must.
Britain has a small influence on the palm oil markets. The UK at large consumes only 1% of palm oil traded internationally. However, EU countries together account for 22% of palm oil traded internationally, offering much greater scope to influence the market.
With timber we showed that by taking leadership and encouraging others to act, the effects of the public and private sectors taking action in one country could be amplified.
The same is true of oil palm.
During a visit to Indonesia last week, the Prime Minister announced the government’s intention to work with British trade associations and companies to set out a roadmap for the UK to achieve 100% use of sustainable palm oil nationwide, tackling the wasteful and inefficient practices that are driving deforestation across the world.
My colleagues in the Department for Environment, Food and Rural Affairs (Defra) have already started working with industry on a voluntary basis to increase sustainable private and public sector sourcing of tropical commodities, and we will use this forum to consider how to move this agenda forward further and faster in tandem with industry.
While in Indonesia, the Prime Minister emphasised that the UK will work closely with businesses in pursuit of these goals: to source and produce sustainable timber and palm oil and to tackle the wasteful and inefficient practices that are driving deforestation.
And that takes me on to my third point, which is to recognise that the public sector can’t do this alone, and to challenge you to work with us to make a real and lasting contribution to halting deforestation.
The British government wants to use the ICF to work in partnership with the private sector and to leverage private investment, because we know that public finance alone will not solve climate change.
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.
The private sector is already acting. The UK timber trade federation showed leadership as early as 2004 through introducing a responsible purchasing policy to source legal timber.
The “Forest Footprint Disclosure” initiative, which DFID supports, is encouraging companies to voluntarily disclosure the impacts of their operations on forests, including exposure to 5 key “forest risk” commodities: soya, timber, cattle products, palm oil and biofuels. The initiative is backed by £5 trillion in invested capital. Leaders in mitigating impact in each sector are profiled in the Forest Footprint’s annual disclosure review. In 2011 leaders included J. Sainsbury plc, Nestle SA, Unilever and Marks & Spencer plc.
I also recently met the CEO of Kingfisher - Europe’s largest home improvements company - and heard about the leadership that Kingfisher has shown in promoting sustainability within its operations and in sourcing certified sustainable timber.
It is a bold policy which shows genuine leadership and forward thinking. It is also a policy that is entirely reconciled with Kingfisher’s viability and long-term future as a profitable enterprise.
Nestle and PT SMART have shown how this can be done for palm oil too. Last year Nestle resumed purchases from a palm oil mill in Indonesia run by PT SMART, after the latter set out a commitment to having a “no deforestation footprint”.
Working with The Forest Trust, the company has put in place supply chain controls so the oil is fully traceable as legally, sustainably and socially sound, starting from its supplying palm plantations through processing and transport to the Nestle factory.
Helping you to go the extra mile
This is an example for us all to follow. On the part of the British government, I can say that if you can build the ground-breaking partnerships required to support green growth and curb the impact of palm oil as a driver of deforestation, then the UK will endeavour to use its climate finance to support you to go that extra mile.