70508 Program of Work and Financial Report Calendar Year 2011 The Program on Forests is a multi-donor partnership, hosted by the World Bank, formed to pursue the shared goal of enhancing forests’ contribution to poverty reduction, sustainable development and the protection of environmental services (including biodiversity conservation and mitigating the impacts of climate change). Through improved knowledge about different approaches to sustainable forest management, PROFOR seeks to encourage the transition to a more socially and environmentally sustainable forest sector, supported by sound policies and institutions that take a holistic approach to forest conservation and management. For more information, please visit www.profor.info PROFOR is supported by: This document was prepared by the PROFOR Secretariat. It does not necessarily reflect the views of PROFOR’s donors. ABBREVIATIONS AND ACRONYMS AFR Africa Region ASM Artisanal and Small Scale Mining CBD Convention on Biodiversity CDM Clean Development Mechanism CGIAR Consultative Group for International Agricultural Research CIFOR Center for International Forest Research CITES Convention on International Trade in Endangered Species COP Conference of the Parties CPF Collaborative Partnership on Forests CY Calendar Year DfID United Kingdom Department for International Development DRC Democratic Republic of Congo EAP East Asia and Pacific Region ECA Europe and Central Asia Region EFI European Forest Institute ESMAP Energy Sector Management Assistance Program EU European Union FAO Food and Agriculture Organization FCPF Forest Carbon Partnership Facility FIP Forest Investment Program FLEG Forest Law Enforcement and Governance FLEGT Forest Law Enforcement, Governance and Trade program of the EU GEF Global Environment Facility GFP Growing Forest Partnerships GHG Greenhouse Gas GPFLR Global Partnership for Forest Landscape Restoration GtCO2e Giga-tons of carbon dioxide equivalent IAITPTF International Alliance of Indigenous and Tribal Peoples of the Tropical Forests ICCWC International Consortium on Combating Wildlife Crime ICRAF World Agroforestry Center ICT Information and Communication Technology IFAD International Fund for Agricultural Development IFC International Finance Corporation IFFA International Farm Forestry Alliance IIED International Institute for Environment and Development ILCF Investing in Locally Controlled Forests IUCN World Conservation Union IUFRO International Union of Forest Research Organizations KM Knowledge Management LCR Latin America and the Caribbean Region MDB Multilateral Development Bank MNA Middle East and North Africa Region MoU Memorandum of Understanding ABBREVIATIONS AND ACRONYMS NFP National Forest Program NGO Non-governmental Organization NRM Natural Resource Management NTFPs Non-Timber Forest Products ODI Overseas Development Institute PER Public Expenditure Review PPCR Pilot Program on Climate Resilience PROFOR Program on Forests REDD Reducing emissions from deforestation and forest degradation SAR South Asia Region SBSTA Subsidiary Body for Scientific and Technological Advice SFA State Forest Authority SFM Sustainable Forest Management SMFEs Small and Medium Forest Enterprises TF Trust Fund TFD The Forests Dialogue UN United Nations UNFCCC United Nations Framework Convention on Climate Change UNFF United Nations Forum on Forests UNODC United Nations Office on Drugs and Crime UN-REDD United Nations Collaborative Program on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries VPA Voluntary Partnership Agreement WCO World Customs Organization WRI World Resources Institute INTRODUCTION As the International Year of Forests comes to a close, PROFOR observes its own anniversary: this year marks the tenth year the Program has been hosted by the World Bank. The convergence of the themes supported by PROFOR and incorporated into our Operational Guidelines at our inception 10 years ago – sustainable livelihoods, forest governance, forest financing, and cross sectoral policies – with the International Year’s theme of ‘Forests for People’ seems today remarkably prescient. We have been repeatedly struck how these programmatic pillars continue to be highly relevant, even in a rapidly changing global policy environment. Indeed, we have been consistent. Looking over one of the early Annual Progress Reports (for CY2003, the first full year PROFOR was in operation in Washington DC), we find that we supported a range of activities related to forest governance, to the development of National Forest Program activities; and the economics of landscape restoration. Demand-driven country-specific work was focused on Russia, India, Brazil, Kenya, Guyana and Honduras. The 2003 progress report proposed a number of partnerships, and outlined activities which would follow up on recommendations from UNFF 3. Most activities straddled multiple thematic areas, e.g. one activity looked at the relationship between illegal logging and rural livelihoods, and another considered how finance from adjustment lending would have cross-sectoral impacts on forests. PROFOR supported around 20 activities in the portfolio then. If anything, the challenges which were evident 10 years ago have only been amplified. The articulation of the costs of deforestation is perhaps clearer, though the solutions seem to be still distant. The challenges of meeting demands for food, fuel, fiber and forest products are even greater – with the world’s 7 billion mouths to feed and people to house and clothe – all of which place even greater pressures on forests and tree resources. More than ever, the solutions to many of these challenges are outside the forests. This is perhaps the most significant single change in perspective that we have noted in the global discussion, and it is influencing us both in terms of managing our portfolio and in developing our future work program: smart forest policy increasingly depends on thinking about what happens outside the forest. The future of forests depends on what happens on farms, in fragmented rural landscapes, and in urban areas. In those first couple of years, PROFOR generated some influential pieces of work, for example: Marcus Colchester’s Justice in the Forest, Jeff Sayers and Stewart Maginnis’ book, Forests in Landscapes, and an early piece on forest governance written before a lot of thought had been given to this, Tools for Civil Society Action to Reduce Forest Corruption. At the same time, PROFOR provided inputs for policy change at the national level, through pieces on institutional reform and concession policies (Russia), forest tenure (India), public-private partnerships (Kenya), and payments for environmental services (Colombia). The Forest Investment Forum was an early model activity, which we continue to replicate with different emphases. Even in those early efforts, there was an acknowledgement that PROFOR offered a unique delivery model, and had particular advantages because of this: i “PROFOR may have an advantage as an “independent� source of funding that may appeal to client country governments as having less political overtones than funding coming from the World Bank or even a specific donor agency. In this sense, PROFOR funded activities may serve a special role in terms of convening a range of stakeholders including government, private sector, and NGOs….� (PROFOR CY2003 Program of Work and Financing) The advantage of operating this way was well-recognized within the Bank too, “PROFOR has been well received as an institutional model for trust funds within the World Bank. It was considered to be a best practice example and therefore showcased at the donors meeting in Paris in March 2004….This was due to two major strengths attributed to PROFOR activities: effective working partnerships with multiple stakeholders and a funding source available to external organizations, as well as to World Bank regional activities.� (PROFOR CY2003 Program of Work and Financing) The model has worked well. One of the evaluators reviewing our program last year made exactly this point. “PROFOR appears to occupy a unique funding niche, characterized by its close relationship with World Bank operational departments, combined with flexibility, nimbleness and relative autonomy. In some ways, PROFOR operates with many of the advantages of a small foundation…. It would be hard to imagine how most, if not all, of these Activities considered here could have been undertaken had PROFOR’s support not been made available.� (Michael Wells, consultant) In this Program of Work and Financial Report, we provide a snapshot of PROFOR’s last year, and outline ways in which we think PROFOR made an impact in 2011. Coupled with our proposed work plan, this should give you an idea of where we’ve been and where we think we are going. More detailed accounts of all on-going and recently closed activities are included in the separate Annexes to this report. We hope the overall report will give you a sense of the breadth and depth of PROFOR’s contribution in an increasingly complex global forest policy environment. PROFOR Secretariat February 2012 ii TABLE OF CONTENTS Introduction ............................................................................................................................................................. i PROFOR in 2011: A Summary ........................................................................................................................... 1 Achievements and Impacts in 2011 ................................................................................................................ 3 PROFOR in 2011, by the Numbers ............................................................................................................................... 3 Highlights from 2011 ........................................................................................................................................................ 4 Mainstreaming knowledge in a crowded field................................................................................................... 5 Incubating new ideas: Emerging themes and new directions..................................................................... 9 Supporting innovation ............................................................................................................................................... 16 Administrative Overview of 2011 ................................................................................................................ 21 Staffing .................................................................................................................................................................................. 21 Communications and Knowledge Management................................................................................................... 21 Budget and Financial Projections ................................................................................................................. 23 Annex I: PROFOR Secretariat Staff................................................................................................................ 28 Annex II. Overview of Activities, by Thematic Area ............................................................................... 30 PROFOR IN 2011: A SUMMARY Is the Program on Forests branching out? Many of the activities PROFOR financed in 2011 focused on the role of trees beyond the dense canopy of tropical moist forests and considered the linkages between forests and energy, mining, and agriculture. This cross-sectoral approach holds special appeal at a time when development partners and governments are looking for "green growth� opportunities. But in truth, cross-sectoral work has always been one of the four areas of PROFOR focus, along with forest governance, livelihoods, and financing sustainable forest management. Over the years, our work in these four thematic areas has created a wealth of evidence and analysis that has helped inform different rounds of forest policy discussions and reforms. In 2011, PROFOR added 15 new activities to its roster and continued to support 32 activities carried over from the previous year; 27 activities were completed and closed during the course of the year. This year's PROFOR progress report will cover:  The ways in which our analysis and knowledge products have been gradually mainstreamed into national strategies, international discussions and policy dialogue;  How we nurture emerging ideas by providing the evidence and additional analysis which governments, development partners, and private sector actors need in order to take good ideas to scale;  When and where we have gone out on a limb to test innovative ideas. Mainstreaming knowledge in a crowded field. Because PROFOR is essentially a think-tank interested in smarter forest policy outcomes, we pay close attention to the ways in which knowledge is mainstreamed into national and global programs. This is where we hope to have the greatest impacts. For example, we were pleased to see Guatemala take on board a conversion tool that helps calculate timber volumes from standing mahogany trees. The methodology was approved by CITES to bolster efforts to protect mahogany from commercial extinction. Guatemala's experience is starting to resonate in Peru, where political conditions were previously unfavorable. In Burkina Faso, a governance questionnaire, filled out by stakeholders at a national workshop, is building a constituency for reform at a time when the country must put its house in order to maximize the impact of planned investments from the Forest Investment Program backed by multilateral development banks (MDB). In China, PROFOR is filling a critical knowledge gap by providing baseline data on the second phase of a collective forest tenure reform that has affected about 70 million rural households. The findings will be directly useful to policy makers who are seeking to make adjustments and to plan the next phase of reform. Mainstreaming takes time. Ideas take root where and when the political winds and economic conditions are right - often long after our activities are closed. In 2011 for example, two products from 2008 met with renewed interest: the Poverty-Forests Linkages Toolkit (in the context of REDD readiness in Uganda) and a study on Managing the Miombo Woodlands of Southern Africa (in the context of the Durban COP). The Internet revolution has made knowledge uptake both easier and more diffuse because products are no longer retired and shelved and can surface at the tap of keyword search. We have tried to capitalize on this. 1 Incubating emerging themes. PROFOR's four thematic pillars are flexible and broad enough to cover enquiries into pretty much any topic of interest to forest practitioners, from biochar applications, to forest sector public expenditure reviews, to strategies for curbing illegal wildlife trade. While some of these topics don’t get much traction, others gain momentum and credibility, buoyed by world trends and well-planned interventions. In the last year, the PROFOR-sponsored Nairobi Investment Forum and related background studies have marshaled evidence for investing in trees and landscape restoration, for example. The ideas of forest landscape restoration and sustainable land management were not new. But PROFOR worked with partners at EcoAgriculture Partners, IUCN, TerrAfrica, the World Agroforestry Centre, and the World Bank, to build a comprehensive case for private sector and public-private partnerships to create positive synergies in terms of productivity, climate change resilience and the mitigation of greenhouse gases on a meaningful scale. The ball is now in the court of private sector actors who have expressed interest in landscape restoration and agroforestry investments. In the short term, one of the most encouraging outcomes of the Nairobi Forum is the fact that ‘deals were done’ there. In Brazil, PROFOR is playing an important intermediary role by bringing lessons from a successful Prototype Carbon Fund project (the Plantar business model) to inform policy choices just when the World Bank is working to support Brazil's low carbon growth strategy. The PROFOR-financed study on financial and institutional arrangements for scaling up renewable charcoal production in the State of Minas Gerais (where 60 percent of Brazil's iron is produced) makes the case for a programmatic Clean Development Mechanism (CDM) approach. This approach would help scale up plantation programs in time for the State of Minas Gerais to wean itself from unsustainable charcoal by 2018, as required by law, without having to switch to coal in the iron production process. Testing innovative ideas. Do we have something new to say? In the course of its interactions with the Advisory Board, World Bank colleagues, CPF members, and other partners, PROFOR gains insights into evolving forest management challenges and opportunities. What if information technology could improve forest governance? What would happen if forest program coordinators had a better understanding of forest finance? Those types of questions feed our pipeline of activities. Last year, PROFOR found new ways to apply existing information and knowledge in the forest sector, and development work in particular. The launch of two primers - one on ICT (Forest Governance 2.0) and the other on public financial management (Forest Sector Public Expenditure Reviews) exemplified our ability to think outside the box. The idea of applying controlled delivery mechanisms (long used in drug enforcement) to forest law and governance work is another example which will no doubt yield interesting lessons in the coming year. Innovation is not only about mapping new territory for potentially interesting forest management solutions. It's also about questioning “sacred cows�. In that spirit, PROFOR supports activities that question received wisdom when solid data seems to be lacking. Did forest outcomes in China really improve after collective forest tenure reform allocated 80 percent of the country's forests to individual households? How robust is the evidence behind smallholder biochar systems? And do we have the methodological tools to determine whether forest certification schemes are effectively improving forest management practices? This is where our work gets wonkish but also quite exciting. We hope you will enjoy reading about our work in its different phases in more detail in the following narrative and in individual activity progress and completion notes. 2 ACHIEVEMENTS AND IMPACTS IN 2011 PROFOR IN 2011, BY THE NUMBERS In 2011, the Program on Forests (PROFOR) initiated 17 new activities, and had an active portfolio of 47 projects. This was similar in number to that in CY2010 (48). During CY2011, 27 activities were brought to closure. PROFOR continues to organize its work around its four thematic areas — although sometimes this distinction becomes blurred because of complementarities between the different themes. Across the four areas, thirty activities were implemented through the Programmatic Window (in coordination with the Bank’s Operational Regions). The number of activities under the Strategic Window (activities implemented mainly by the Secretariat) totaled 17. Compared to previous years, the balance of activities implemented through the Programmatic Window increased, while the number of activities implemented by the Secretariat through the Strategic Window decreased. The reduction of the numbers of activities under the Strategic Window in CY2011 reflects the greater emphasis we have given to our regional work program. The Forests and Livelihoods theme was tackled in 15 activities. Activities which sought to address Cross-sectoral Impacts on Forests accounted for 14 activities. While demand for work on Forest Governance activities is still strong, we saw a reduction in the number of activities in our portfolio from 17 in CY2010 to 12 in CY2011. The theme of Forest Financing was featured in 6 activities. Disbursements and outstanding commitments reached $6.5 million, a 45 percent increase over CY2010 levels, but consistent with projections in the 2011 Work Program ($6.8 million). There was a significant expansion in PROFOR’s disbursements and outstanding commitments under the theme of Forests and Livelihoods, to $1.4 million (up 280 percent compared to CY2010). Disbursements and outstanding commitments in the themes of Innovative Financing and Cross Sectoral dimensions of forests almost doubled, to $0.9 million and to $1.4 million, respectively. Disbursements and commitments under the Governance theme increased slightly to $2.2 million (represented mainly by the financing of a single activity in Liberia for $1.15 million). Overall, Administration, Communications and Management held steady at CY2010 levels and accounted for $0.5 million. Geographically, activities implemented in the Africa Region (AFR) accounted for 37 percent of the disbursements and commitments. 27 percent was about evenly spread between the Latin America and the Caribbean (LCR) and the East Asia and Pacific (EAP) regions; and, the remainder, around 12 percent, was shared among the Europe and Central Asia (ECA) (9 percent), South Asia (SAR) (2 percent) and Middle East and North Africa (MNA) (1 percent). Global activities implemented by the Secretariat through the Strategic Window accounted for 26 percent of disbursements and commitments. 3 HIGHLIGHTS FROM 2011 PROFOR’s objective is to contribute to the capacity of institutions and stakeholders working on forest policy processes to address more effectively poverty alleviation, national economic development, climate change mitigation and adaptation, and sustainable forest management. As laid out in our Operational Guidelines, it does this by:  carrying out analyses of emerging themes,  mainstreaming ideas and approaches into the policy dialogue,  developing knowledge products such as toolkits and new methodologies,  testing innovative approaches, and  strengthening networks and partnerships. In 2011, PROFOR activities touched on all of these pillars. We have chosen in this Annual Progress Report to focus on three particular themes which are deeply engrained into our operations: activities which support innovation, the incubation of emerging ideas until they are mature for wider dissemination, and then achieving an impact by mainstreaming new approaches and themes into the global forest policy discussion. We highlight below just a selection of achievements in each of these three areas. More detailed updates on all activities in PROFOR’s portfolio are included in Annex III to this report. One of our big challenges in 2011 was in coping with increased demand for PROFOR support in the face of budget constraints which limited our ability to take on new activities. In order to accommodate growing demands within a constrained budget framework, we shifted resources from our Strategic Window (activities implemented by the Secretariat) to our Programmatic Window (activities implemented by the Bank’s operational regions). In doing so, we disbursed and committed record levels of funding through our Programmatic window. In order to constrain future spending, the Secretariat has virtually stopped any new programming which is not already accounted for in our pipeline budget. A number of activities planned for CY2011 were postponed or cancelled, or rolled over to the CY2012 work program. These activities included further evaluative work which had been earlier programmed. Plans for CY2012 are discussed separately in our Proposed Work Program and Financial Projections. 4 MAINSTREAMING KNOWLEDGE IN A CROWDED FIELD PROFOR seeks to inform forest policy by mainstreaming various aspects of sustainable forest management and forest governance within international and national programs and policy dialogue. This policy impact is the "end prize" of our analytical and guidance work. Impacts may take years to manifest themselves. Attributing causality is also challenging when so many products and ideas are the result of partnerships and cross-fertilization. However, we are sometimes able to identify pathways between relevant, timely analysis and tools and subsequent policy choices. We have outlined below a few promising activities from 2011 that may ultimately shape forest policy choices. Those examples also highlight why PROFOR analysis matters in the crowded field of think tanks, NGOs and research centers:  We are able to draw on the World Bank to amplify policy messages.  We are closely linked to significant investment operations through our work with World Bank regional and climate change colleagues.  Because of regional colleagues’ ongoing dialogue with government agencies, we are able to produce well targeted knowledge products that respond to specific country needs.  Much of our work is oriented toward practical guidance and tools rather than pure research. We produce knowledge that people can use. Managing the Miombo Woodlands of Southern Africa The UNFCCC Conference in Durban in December 2011 provided an excellent opportunity to highlight the value of dry forests and woodlands — a theme which had been relatively neglected in global climate discussions compared to the attention given to their high-density Amazon, Congo and Indonesian cousins. The PROFOR Secretariat responded to this opening by updating and then publishing work which had originally been completed in 2008 for the World Bank Africa Region to inform its regional work on forests. The outcome, Managing the Miombo Woodlands of Southern Africa: policies, incentives and options for the rural poor, brought these findings to a much wider audience at the Dry Forests Symposium in Durban (organized by CIFOR with PROFOR sponsorship) and Forest Day 5 (organized by the Collaborative Partnership on Forests with PROFOR sponsorship). About 300 copies of the book were shared during the two events, and findings from the study featured prominently in the presentation that Andrew Steer, World Bank Envoy for Climate Change, delivered in front of hundreds of key forest policy makers and experts at a Forest Day 5 Discussion Forum which was sponsored by FAO and the World Bank: 5 "Change and Adaptation in The Right Fit for Sharing REDD+ Benefits African Dryland Landscapes." Forest-dependent communities will have to subscribe to the motivation Key messages included the fact and objective of REDD+ for it to be successful and sustainable. This is that dry woodlands are critical where the design of a country's benefit sharing mechanism will make a safety nets for poor rural difference by determining who is involved in REDD+ activities and the households, and are an integral ways in which benefits are shared. part of farm-forest-livestock PROFOR's recently completed work on “Making Benefit Sharing Work production and management for Forest-Dependent Communities: Insights for REDD+� includes a tool systems in southern Africa. The developed by PricewaterhouseCoopers (PwC) that provides guidance to presentation highlighted the governments attempting to choose, for example, between input-based role dry woodlands can play in and performance-based mechanisms (in other words, rewarding ‘Climate Smart Agriculture,� community efforts or only carbon outcomes) or sorting out the most because of their role in income effective scale of intervention (national or subnational). generation, improving food The tool was introduced by Richard Gledhill, Global Leader for Climate security and building resilience Change and Carbon Market Services at PwC, in Durban to a crowded in farming systems to climate group of Forest Day 5 participants during the Issues Marketplace. More shocks. These themes were also substantively, it has been adopted by the Forest Carbon Partnership highlighted through two blog Facility (FCPF) who will roll out the tool and other findings from the posts on the PROFOR website three-part study in training sessions scheduled for May 2012. Because ("Notes from a muthi market" FCPF countries are at different stages of the REDD+ readiness process, and "Free lunch, in the shade of the training sessions and material will be tailored to meet specific a marula tree"). country capacity and needs. The FCPF will work with Impact: As we have noted, the miombo study was nothing new. World Bank Institute and its Global What PROFOR did was to take Development Learning Network to advantage of a platform to organize the training. which it had access — Forest Left: PwC’s Richard Gledhill Day 5 —to give the miombo listens to feedback at Forest study a profile with an Day 5. Photo: Flore de influential group of policy Preneuf makers who might not have been familiar with its policy- oriented findings. We did this by working closely with the Bank’s climate change team and with Special Envoy Steer, and by drawing together the links between dry forest management and food security, resilience to climate shocks, and the potential for mitigation by better forest and tree management. The wider message was particularly resonant, as this was ‘Africa’s COP,’ and helped mainstream a wider understanding that the dry forests and woodlands of Africa provide a wide range of environmental goods and services which are inextricably linked to people's broader livelihood portfolio. These areas play an especially important role in supporting vulnerable households, including those headed by women, those affected by HIV/AIDS and those increasingly affected by climate variability. Assessing Forest Governance in Burkina Faso Burkina Faso has experienced extensive degradation of its natural resources — forests, farm and grazing lands, lakes, and rivers. Around 90 percent of its population depends to varying degrees on these natural resources for their livelihood. Deforestation is estimated at 1 percent annually, and 6 Going Granular in Ghana PROFOR first supported the mapping of landscape restoration opportunities at the global level. While the global mapping work did much for increasing awareness about the potential for forest landscape restoration, it was not so helpful in providing guidance at a smaller scale or for informing specific investment decisions. Ghana, a country where forest degradation rather than deforestation is a greater threat to maintaining the ecological integrity of forest areas, is eager to assess and harness the potential of forest landscape restoration. This interest suggested that a more detailed national level mapping exercise could better inform its future forest investment plans. With PROFOR support, a careful, participatory process was launched to help expand the horizon of the Forestry Department beyond its traditional focus on timber exploitation in Forestry Reserves, to understanding the impact and extent of degradation taking place outside forest reserves, where activities such as subsistence farming and slash and burn are taking a toll on the landscape. Foster Mensah, Executive Director of the Centre for Remote Sensing and Geographic Information Services at the University of Ghana, was highly appreciative for the support PROFOR provided to help develop a fine-grained assessment of forest resources in Ghana. He pointed out that: "The mapping work is exposing stakeholders to the fact that trees may be gone in 15-20 years if nobody intervenes through restoration efforts. Mapping is really advocacy work, making policy makers aware of where Ghana stands today." Ghana has entered into a Voluntary Partnership Agreement with the European Union to ensure that timber exports are legally sourced. In addition, Ghana has been an active partner in developing a carbon market Readiness Plan through the Forest Carbon Partnership Facility, and has been preparing (with the support of the African Development Bank) its plans for forest investment from the FIP. Discussions with members of the team which is developing Ghana's FIP investment plan indicate that the maps will provide a solid foundation for planning investments outside forests which generate direct economic benefits, reverse degradation and address climate change. Right: Stakeholder consultation in Kumasi, Ghana, October 2011. Photo: Lars Laestadius, World Resources Institute the associated loss of income has been estimated at 1.23 percent of GDP. The proximate causes of deforestation include agricultural expansion, pastoralism on fallow ground during the dry season, wood removals from forests mainly for domestic uses, the overexploitation of non-timber forest products, and overall, poor governance. Burkina Faso has been selected as a pilot country for the MDB-backed Forest Investment Program (FIP). Improving forest governance is critical to the successful implementation of its FIP program. Thus, Burkina's Ministry of Environment and Sustainable Development has been motivated to identify the main weaknesses in forest governance and to implement appropriate interventions to mitigate these. Building on the diagnostic framework developed by PROFOR and our several partners, our forest governance team worked closely with the Ministry in developing a clearer sense of the key weaknesses in the forest governance framework. The diagnostic work relied on systematically assessing the views of a large number of knowledgeable stakeholders, who were likely to be impacted by the proposed plan for FIP investments. The diagnostic work supported a unique one- day national workshop at which multi-stakeholder groups were exposed to a comprehensive framework to analyze forest governance issues and were invited to score a forest governance 7 questionnaire, customized to the specific circumstances of the country. Collation, validation and cross-checking of the information helped identify the strengths and weaknesses of forest governance. Some of the more prominent issues in Burkina Faso relate to the need to:  deepen participatory processes and to give stakeholders a role in monitoring and implementation, especially at decentralized levels;  improve media coverage of the forests sector (depth, frequency and local language coverage) and to strengthen the follow-up, from reporting to action;  incorporate specific forest governance remedial actions into Government's overall anticorruption policy;.  consider a practical body or mechanism for speedy and fair resolution of conflicts among local communities and forest users, especially at the decentralized levels;  develop a robust system of tracking financial flows and for a thorough study of the issue of budgeting (level and availability), the effectiveness of reforms, and expenditure control; and to  step up government efforts to provide the necessary incentives for increased participation of the private sector. Impact: The workshop helped bring different stakeholders to a common level of understanding and appreciation for governance bottlenecks. The assessment unearthed new information, transparency and accountability gaps, and institutional challenges which impede good governance. The process of diagnosis itself is expected to increase the desire for reform, but whether diagnosis sets the course of reform remains to be seen. A followup workshop in March 2012 will help stakeholders prioritize actions to remedy governance problems as the country gears up to launch its FIP investment plan over the next three to four years. Forests and Rural Livelihood in the Kyrgyz Republic: Development Potentials What are the structural and institutional constraints to generating income from Non-Timber Forest Products (NTFPs) and to ensuring the benefits accrue to poor rural communities in the Kyrgyz Republic? What is the export potential of NTFPs such as walnuts? In 2009-2011, PROFOR supported analysis to provide a stronger factual base for the growing debate in the country concerning forest management. At the request of the State Agency for Environment and Forestry, special attention was paid to issues of management of municipal forests. The activity was implemented by the Rural Development Fund, a Kyrgyz- based NGO, which focused the study on five forestry enterprises. In addition, a specialist conducted a detailed analysis of the value Women gathering the wild walnut crop from the forest. chain for one of the most Photo: Kip Loades, Flickr important NTFPs in the area — walnuts. The main report, Forest Management and Use in the Kyrgyz Republic, contains key 8 recommendations to alter the current dynamics of forestry management. A Walnut Value Chain Survey in turn, shows that improvements in the efficiency of the walnut value chain in Jalalabad could improve the income and livelihoods of many participants, increase employment through value addition and increase the national GDP through exports. Regional economic growth, if equitably distributed, could also serve to reduce ethnic tensions and division. Support to improve the efficiency of value chains of walnuts and other NTFPS would also help to promote sustainable walnut-fruit forestry management practices, currently under threat from increased population pressure, deforestation and livestock farming Impact: Results from the two reports were shared at workshops with high buy-in and participation from government institutions as well as other relevant stakeholders. Because this activity was designed to respond to a specific government demand for policy analysis, its findings are expected to help inform implementation of government and donor interventions to improve forest management, with a focus on the relationships between State Forest Enterprises inherited from the Soviet era (leskhoz) and local villagers in harvesting timber and NTFPs. In particular, the formulation of specific recommendations for overcoming policy and market value chain problems should help increase the benefits that communities derive from forests and their products. The background study on walnuts also fills a valuable information niche for potential private sector investors as data on informal activities can be hard to come by. The study appears in the first two search results when the words “Kyrgyz walnut value� are typed in the search engine Google. Both the overall Kyrgyz report and the walnut study are knowledge products that do not aim for a mass audience but achieve relevance by meeting specific demands for analysis and data. INCUBATING NEW IDEAS: EMERGING THEMES AND NEW DIRECTIONS The idea of mainstreaming our findings into forest policy processes is central to PROFOR’s work and where we believe we can have significant impact. We are always in search of new opportunities and platforms for weaving our findings into local, national, regional and global forest policy dialogues. But before we can really ‘take things to scale,’ an essential prior condition is that these ideas are ‘ready to go:’ in the sense that they can withstand scrutiny from critics and proponents alike. Indeed, part of PROFOR’s work is geared toward bolstering emerging themes until they can stand on their own. We highlight here a couple of the emerging themes we have focused on last year: green growth and landscapes. Our work on these issues is contributing to generate a critical mass of evidence and analysis to support further action and mainstreaming. Green growth: why markets can be good for forests and trees — and for people. Early in the preparations for the planned Rio+20 United Nations Conference on Sustainable Development the preparation committee focused on the challenge of supporting a transition to a green economy. Once the challenge had been tabled, member states and major groups involved in the preparation process quickly identified areas for emphasis such as green jobs, energy access and sustainability, food security and sustainable agriculture, water, and improved resilience. These areas reflect the realities which are confronting governments worldwide — a growing population which in 2050 population will exceed 9 billion; the need to increase food supply by 70 percent globally; the need for crop production systems that are resilient to climate change; the need for measures to address the growing demands for biofuels and woodfuels; and the need to resolve conflicts over the use of arable land for food, fiber, and fuel. The preparations show that an agenda for green growth will need to focus on improving productivity, internalizing externalities and improving efficiency. 9 Forests are conspicuously absent as an area of emphasis in the run-up to Rio, yet forest goods and services are critical to every area that is named (from energy to water, food, jobs and resilience). Several of the activities PROFOR supported last year provided robust analysis that could help place forests more explicitly at the center of sustainable development discussions and provide the basis for action once policymakers turn to solutions for implementing the green growth agenda. The role of forests in low-carbon growth One of the hallmarks of a wider body of analytic work over the last several years has been an effort to assist countries in defining how to transition to low carbon growth. The Energy Sector Management Assistance Program (ESMAP), a multidonor partnership hosted by the World Bank, has been assisting 14 counties in preparing Low Carbon Development Strategies. PROFOR was approached by ESMAP to collaborate in developing a policy brief which considers the role of forests in low carbon growth. The policy brief reviews low carbon growth strategies for three countries (Brazil, Mexico, and Indonesia). It succinctly captures the importance of curbing deforestation and forest degradation, restoring degraded lands, and enabling sustainable wood energy production for low-carbon growth. The policy brief emphasizes that, while changing the incentive structures which encourage deforestation is important, low-carbon growth will also need to focus on drivers of degradation, which stem mainly from woodfuel, logging and agriculture. The policy brief points out that wood-based biomass is not a transitional fuel, but is and will remain a critical part of the energy mix in poor, middle income, and developed economies. Woodfuel plantations will reduce forest degradation only if they are established in a manner which explicitly offsets the unsustainable harvesting of forests as a result of agricultural expansion or logging. The emphasis on sustainable bioenergy use in low carbon strategies is justified given current consumption rates – in Mexico, bioenergy accounts for just 8 percent of primary energy consumption, while in Brazil bioenergy from native forests is central to iron and steel production. Impact: Currently the draft brief is being used to inform internal World Bank discussions regarding low emissions development and green growth. It has helped position issues related to forest degradation and biomass based energy in these discussions. Brazil: Scaling up Renewable Charcoal Production In Brazil, the state of Minas Gerais is responsible for 60 percent of the national production of iron and steel. To date the industry has relied heavily on charcoal produced from wood which has been harvested from natural forests. The government of Minas Gerais recently approved legislation which will require, by 2018, sustainable firewood and charcoal production practices and which virtually bans the production of charcoal from deforestation. By 2018, 95 percent of the charcoal consumed in the State must be produced from plantations. The challenge will be in overcoming the financial and institutional constraints to using wood Improved charcoal kilns sourced from plantations. Photo: www.charcoalproject.org 10 PROFOR supported a study on scaling up renewable charcoal production which assessed barriers, risks, opportunities and measures to mitigate GHG emission in the forestry and pig iron sectors. As part of this activity, a workshop with 20 stakeholder representatives was convened. The workshop showcased successful business models such as the Plantar Business model (a CDM project) financed by the Prototype Carbon Fund. Impact: The first output from this work, a study in financial and institutional arrangements for scaling up renewable charcoal production in the State of Minas Gerais, has informed the national low-carbon development strategy for Brazil. The study and stakeholder workshop both demonstrated that CDM projects can offer incentives for large scale charcoal plantations, and that a programmatic CDM approach may be a reasonable alternative model for charcoal production for the pig iron industry. Impact of Artisanal and Small Scale Mining in Protected Areas In Brazil, we are demonstrating that a green growth agenda can be advanced when the externalities of unsustainable energy consumption are internalized. Bringing about a transition of informal sector economic activities into the formal sector can accomplish similar objectives. In West Africa (primarily in Liberia and Gabon), PROFOR has been supporting a study on artisanal and small scale (ASM) mining. Some of the environmental concerns associated with ASM stem from mining practices, which can include primary forest clearance, dam construction, and the digging of deep pits without backfilling and the Artisanal indirect impacts of these — mining in erosion and encroachment. Northeastern The study found that the main DRC reason for ASM was the lack of Photo: AFP economic alternatives. Government’s common response —eviction of artisanal and small scale miners from forest areas because their activities were considered illegal — fails to address the primary cause of the project. The outcome from this work was integrated into a larger initiative on Artisanal and Small Scale Mining in Protected Areas and Critical Ecosystems (ASM-PACE) led by WWF in collaboration with a private sector partner. Impact: In Gabon, this study has gained government attention and has fostered an interest in creating a win-win solution to the problem of ASM in protected areas. Engagement with this project has increased government’s interest in creating a managed-space which would allow Gabonese miners to mine legally while also contributing tax revenues to the government and respecting Gabon’s pristine forests. This approach would reduce the impact of forest clearance, erosion and other negative externalities associated with ASM. 11 Forest Connect II Research has shown that investments in small and medium scale forest enterprises (SMFEs) can produce better outcomes than investments in industrial-scale forestry. The latter can avoid exacerbating poverty, but it seldom has been shown to actually reduce poverty. In contrast SMFEs offer better prospects for rural development, especially when forest enterprises are organized in groups or represented by associations that have strong social and environmental goals. PROFOR has supported a series of efforts to build social, economic and environmental sustainability amongst small and medium scale forest enterprises (SMFEs). Forest Connect II, which assembled a series of guidance notes to do this, was completed in 2010, and a second phase was launched to finalize these notes into a Woodworker, toolkit. Kenya. Photo: Flore Working with IIED, Forest Connect has de Preneuf supported the testing and enrichment of guidance modules for facilitating the development of small and medium forest enterprises. The guidance modules, and the toolkit which makes these accessible for wider dissemination, can be used to build social, economic and environmental sustainability among SMFEs by connecting them to emerging markets, service providers and the National Forest Programme processes. Impact: Forest Connect has been active in a large number of countries, and some clear lessons are evident from a number of these. In Burkina Faso, for example, Forest Connect has provided valuable insights about the NTFP sector (structure, information needs, governance of producer associations) and the challenges and priorities of SMFEs themselves. This information has been enormously important for informing the development of rational and well justified plans for supporting SMFEs in the NTFP sector. In Ghana, the multi-stakeholder Forest Connect steering committee has helped prioritize support for marketing a set of key small forest enterprise commodities. The consultative approach adopted by the project has made it possible to address needs of stakeholders (e.g., honey producers and domestic lumber traders). In Guatemala, exchanges between community-managed ecotourism initiatives supported the development of an integrated communications strategies and a national platform for SMFE tour operations. In Guyana, increased awareness about the small forest enterprise sector has motivated the Guyana Forestry Commission to expand the number of community forest areas in the country from 27 in 2007 to 62 in 2011 – including both indigenous peoples associations and other community forest associations. In Mozambique, the diagnostic carried out by Forest Connect on SMFE’s challenges drew attention to major issues having to do with legislative rights, market access and a lack of enterprise organization. The findings have informed inputs to possible mechanisms to reduce deforestation within the National REDD+ strategy. In Nepal, the diagnostic study on SMFEs and their associations within Nepal improved the accessibility of the information on the SMFEs. 12 Promoting Investments to-Scale in Landscapes for Green Growth New investment models must be found to underpin green growth. Investments that internalize the costs of land-use conversion can improve efficiency and enhance productivity and resilience. Landscape-scale investments broaden the spatial nature of the investment, and extend it beyond the farm boundary to include investments and their impact in riparian areas, protected areas, wildlife habitat and human environments. Similarly, market incentives and subsistence requirements need also to be addressed when supporting investments in reforesting hillsides, planting trees on farms, improving soil management and forging partnerships. Private investors may need incentives to help them deal with risk and to invest in areas with high potential for public gains. The development of agricultural and forest product supply chains in ways that benefit landscape restoration may in some cases require short term tradeoffs between ecological and economic goals. The PROFOR-supported Investment Forum in Nairobi in May 2011 aimed to mobilize private investment by raising awareness of the opportunities for investments in trees and sustainable land management and restoration. It took existing expertise from partners such as EcoAgriculture Partners, IUCN, TerrAfrica, the World Bank and the World Agroforestry Centre and packaged it in a way that would be meaningful for private sector participants and provide a platform for future decisions and policies. In Indonesia, the “Forests Indonesia Conference: Alternative futures to meet demands for food, fiber, fuel and REDD+� focused on the challenges and opportunities facing Indonesia’s forests today against the broader trends of climate change and global trade and investment. Impact: The Nairobi Investment Forum brought together 100 participants — financiers, entrepreneurs, community organizers, market developers, governments, and donors. The Forum and its background papers created a common understanding of the constraints and opportunities for enhancing local livelihoods, increasing resilience, while creating good returns for investors. The background papers that informed the Forum deliberations were also widely disseminated online and in print at subsequent events such as Forest Day 5 in Durban. The Forests Indonesia Conference provided a forum for almost 1,000 key leaders from all sectors to discuss the challenges and opportunities faced by Indonesia in the sustainable use of its forests. One clear result was to put forests back on the agenda in Indonesia. The President of Indonesia, who opened the conference, also called on business leaders to enhance the environmental sustainability of their operations and recognized that the government needed to do more to address the primary sources of Indonesia’s greenhouse gas emissions. 13 Landscapes: Which ones and Where? And Why? After the Durban UNFCCC COP and the side events of Forest Day 5 and Agriculture and Rural Development Day, the Vice President of the World Bank’s Sustainable Development Network, Rachel Kyte, posted a blog in which she described the need to “break down the silo mentality that can affect expert communities working on narrow themes�. Rachel reflected on the well known reality that agriculture (large and small) is one of the main drivers of deforestation and forest degradation in many parts of the world, and that growing demands for food, energy and income would continue to exert pressure on the forest “frontier� in the future. She succinctly captured the positive achievement associated with forestry and agriculture experts, concerned Rachel about climate change, reaching agreement Kyte at to find joint solutions at the landscape level. Forest Rachel also urged everyone to consider an Day 5, integrated approach to climate change Durban action. “Adaptation-based mitigation is a Photo: Neil no-regrets option� she wrote. PROFOR’s Palmer, behind-the-scenes effort helped frame CIAT Rachel’s perspective. We summarize here some of the highlights from a few PROFOR activities which aimed to enhance the evidence base for taking an integrated landscape approach to climate change. Using Forests to Enhance Resilience to Climate Chan ge An integrated approach to managing natural resources requires cross-sectoral coordination. There are few efforts which have systematically positioned the role of forests with respect to other sectors. In the context of climate change, a justification for an integrated and landscape oriented approach is the role of trees and forests in enhancing resilience to climate change. The UNFCCC (2007) estimates that the global cost of adaptation to climate change in agriculture, coastal zones, forestry, fisheries, health, infrastructure, and water supply combined will reach $44 billion to $166 billion per year by 2030. For developing countries, the cost will be between $28 billion and $67 billion. There is extensive evidence about how forests can help build resilience, across multiple sectors, in adapting to climate change, though this has been inconsistently documented at the country level. This PROFOR activity, launched in partnership with CIFOR, is developing three in-depth country case studies where forests are important for resilience in other sectors (agriculture, energy and urban water). It also examines the institutional and policy requirements to effectively use forests for adaptation. A ‘state of knowledge’ report has been completed, which seeks to document some of the country specific cases where forests have reduced the costs of adaptation. For example, in Vietnam, the planting and protecting of nearly 12,000 hectares of mangroves cost US$1.1 million per year, but was shown to save annual expenditures of US$ 7.3 million for dyke maintenance. In Orissa, India, similar investments in mangrove forest establishment could help reduce the loss of lives to super cyclones by 92 percent and lower the costs of property damage. 14 Impact: The report has informed the development of a methodology for assessing how forests can contribute to adaptation strategies in the agriculture, water and energy sector in the three case- study countries of Lao PDR, Honduras, and Burkina Faso respectively. It is helping to anchor country level analytic work in upcoming investments associated with the Forest Investment Program (in Lao PDR and Burkina Faso) as well as a development policy credit that would partly be used to reforest the Guacerique Basin, which is the source of water for Tegucigalpa, Honduras. Impacts of Climate Change on Rural Landscapes in Brazil The linkage between agriculture and forests is very pronounced in Brazil. Agricultural expansion remains a major driver of deforestation in Brazil. Agricultural expansion also generates significant negative feedback loops by causing climate change, which in turn is drastically changing the structure and composition of Brazil’s remaining forests. Changes in land use — which are being driven by climate change — are directly affecting livelihoods by changing the distribution of land under different uses. By modeling the impacts of these feedback loops, more informed policies and investments can be made to try to minimize the negative impacts of climate change on food security. In Brazil, an agro-eco-zoning model has been developed to project the suitability of different zones for different crops, pasture and forest types. This model is currently being used to help define the structure of financial lending in the agriculture sector. PROFOR is supporting a refinement of climate change projections for Brazil by integrating global, regional, and local scale models. Higher resolution climate projections will then be used to refine the national agro-eco-zoning model, and will help identify cropping areas that are less vulnerable to climate change impacts, based on temperature projections through 2020, 2030 and 2050. Impact: This activity is contributing to the South American initiative, particularly in the Amazonian region to produce high resolution climate scenarios for impact assessments, and an EU sponsored activity to enhance climate data collection, storage, and access. Official zoning risks and forest land conversion issues have been and continue to be central matters of public policy in Brazil, impacting decision making at federal, state and municipal levels. It is anticipated that, robust projections of climate change and impact assessments on land and water use through 2050 and beyond will enable policy makers to identify key issues in current forest land use systems. These projections are expected to help in providing adequate lead time for appropriate policy instruments to guide strategic cross sectoral investments for both reducing deforestation and forest land degradation and improving adaptation to climate change. Impacts of China’s Forest Tenure Reform: Implications for policy makers This PROFOR activity is examining how the second round of collective tenure reform underway in China affected household livelihood strategies and investments, allowed for well-functioning markets for forest land, and influenced forest resource management and provision of local public goods. The aim is twofold —to document the impact of the reform process, as well as to inform the formulation of policy measures needed to accompany future reforms. Collective tenure reform is impacting 70 million rural households and 147 million hectares of forest land (roughly 60 percent of China’s forest land). Preliminary findings from the data analysis show that the reform process has resulted in a 150 percent increase in the area under afforestation compared with areas where there were no reforms. The reform process has also created some risks. Households which are facing significant economic constraints sometimes choose to sell off their land or their timber. If a large number of households opt to sell their land or to harvest their timber, the reform could have unintended ecological 15 outcomes. By identifying these risks, this study aims to inform the formulation of supporting policies that can help ensure that villages and households fully benefit from the reform. Forest Impact: The State Forest tenure Administration (SFA) is in titling in the process of carrying out China a mid-term evaluation of the impact of collective Photo: FAO forest tenure reform. The PROFOR-supported researchers working on this activity have been invited to participate in the mid-term evaluation. This is a tremendous opportunity for the activity to contribute to policy processes. The results from the PROFOR analysis will be reported to SFA in a workshop planned for the fall of 2012, and will be used as inputs for follow-up policies and regulations. DFID has been funding a global initiative coordinated by Rights and Resources Group to document forest tenure reform in the developing world and assess the impacts on forest management and poverty alleviation, as well as REDD. Researchers working on this PROFOR activity have been invited to speak at activities organized under the initiative, including dialogue among ministers of major forest nations (MegaFlorestais) and training of future forest leaders from developing countries, providing an opportunity to share lessons from China for other countries. SUPPORTING INNOVATION PROFOR has a specific mandate, in its Operational Guidelines, to identify and to support innovation. We see this support as critical for informing the rest of our work, and to help find new ways to apply existing information and knowledge in the forest sector. PROFOR products tend to go through a process where an initial idea has first been developed through PROFOR's knowledge work, nurtured and incubated through other subsequent measures, and then mainstreamed and scaled up both within and outside of PROFOR’s immediate portfolio. From our perspective, innovation processes can be divided into four distinct stages: i) mapping innovation potential ii) finding new solutions iii) sharing promising innovations, and iv) incubation 16 and catalyzing new innovation. Many PROFOR products and processes can be grouped into one of these four categories. Some highlights of PROFOR innovation activities from 2011 using this typology are described below. Mapping the potential for innovation Innovation processes start by understanding the operating environment. This is essential for ensuring that new solutions are practical and useful — a primary difference between innovation and invention. Evaluating the Effectiveness of Public Spending in the Forests Sect or PROFOR’s review of studies of public spending in the forests sector found that, globally, very few forest sector public expenditure reviews (PER) had been undertaken. Of more than 60 agricultural/NRM/environment PERs reviewed, only 14 focused to any degree on forests. Few of these seemed to be very robust because of inconsistencies in definitions and data problems. They also suffered from a lack of clear linkages between public expenditures with intended outcomes. The review also suggested that levels of sectoral spending could be difficult to capture when multiple institutions have responsibilities for delivery against different aspects of a country's forest policy (e.g. production forests, protected areas and law enforcement). The report provides practical support and guidance by defining a common framework for a forest sector PER; and focuses on how to address these deficiencies. The development of a clear public expenditure management framework for forests is especially important in the context of REDD+ initiatives. Without an understanding of how spending on forests features in budgetary processes, forest carbon finance could be poorly targeted. The study was complemented by the preparation of Guidelines for ensuring that there is a common platform for understanding how specific activities — such as Forests Sector Public Expenditure Reviews — should be carried out. The next stage would be to design appropriate ways of monitoring forest sector financial flows and pilot this methodology in a few countries. Finding new solutions Innovation can be based on new inventions or by applying existing knowledge in new and unprecedented ways. Many PROFOR products seek to adapt knowledge developed in other contexts to specific forest sector needs. 17 Forest Governance 2.0: A Primer on Governance and ICT PROFOR’s study on forest governance and ICT highlighted the range of interesting ICT applications which have been deployed to improve forest governance. The report demonstrates that increased access to ICT has led to innovation and that more traditional uses of ICT for mapping, measuring and monitoring forests carbon, have become more efficient, cost-effective and inclusive. At the same time, the increased use of technology has led to new ways of working that would not have been feasible previously. For example, crowdsourcing and participatory mapping have been made possible by new devices and the convergence of 'small ICT' (e.g. cell phones and Internet) and 'big ICT' (remote sensing and earth observation systems). At the same time, the report also encourages realism. There have been few systematic approaches to ICT development and application, and its use is often limited to one-off experiments. Linking ICT innovations to wider institutional reforms remains a challenge. In summary, ICT technologies can be used to support and to promote good forest governance. But ICT alone does not change the landscape and projects have to be well designed and sustainable within a supportive institutional context. It is essential that technology development and the use of ICT be driven by an appetite for reform rather than by the availability of technology. Findings from the study have already influenced the design and preparation of several World Bank operations, such as the Russian Federation Forest Fire Response Project, the DRC Forests and Economic Diversification Project, and the Africa Regional Strategic Work Plan for Forests. Tools for International Law Compliance and Forest Control and Supervision PROFOR has continued to support the extensive work launched by the FLEG Trust Fund (now closed) in Central and South America. One specific innovative approach which grew out of this early work involved developing mahogany yield tables and a computer application to monitor logging and trade in CITES regulated species. In the past, highly inaccurate conversion factors made rates of timber extraction appear unrealistically low; this allowed for extensive illegal logging when controls were concentrated at shipping ports. Based on extensive information collected along the value chain, national yield tables and volumetric conversion factors were developed in Guatemala. The system calculates the relationship between the Diameter at Breast Height (DBH) of a tree and the expected timber volume of sawnwood. For the first time, authorities are able to confirm that sawnwood production volumes are logically linked to allowable cut and the legality of sourcing can be assumed. To make the conversion tables more user-friendly, a spreadsheet software program called the VERITAS Timber Volume Calculator was developed. It gives accurate estimates of legal processing volumes based on allowable cut. 18 Originally, this innovation aimed to help forest authorities with monitoring tasks, but the private sector is also interested in using it for operational planning in production and marketing. The systems were initially developed for mahogany in Guatemala and Peru, but the step-by-step system for the development of national conversion tables and the related software are applicable beyond these countries and to other tree species as well. Another innovation of the program was to develop best social and environmental practices in logging contracts between forest industries and indigenous communities. This included selection, monitoring and follow-up of community social control of forest industry-indigenous community timber contracts in Contamana, Pucallpa and Atalaya provinces in Peru. Reports and lessons learned material from this activity will form the basis for the development of a practical toolkit for forest control and supervision, expected to be disseminated globally (outlined in the CY2012 work program). Sharing promising innovations What if there are great innovative ideas out there but information is not presented in a useful way? Furthering innovation sometimes means consolidating ideas and packaging them in a way that is relevant to practitioners and easier to share. Biochar Systems for Smallholders in Developing Countries Biochar is a traditional system to improve soil fertility by incorporating the by-product of an energy generating process (biomass pyrolysis) into the soil. Development organizations are increasingly interested in biochar systems, to support sustainable intensification of agriculture and land based climate change mitigation and adaptation, but lack a clear understanding of the benefits and pitfalls associated with smallholder biochar systems. PROFOR is supporting efforts to generate independent knowledge on the use of biochar systems in low and middle income country conditions, with a particular focus on systems accessible to smallholders that are already integrated in the local economy. Lessons from existing systems in Kenya, Senegal and Vietnam will be compiled to assist the development of practical, evidence-based protocols to promote smallholder biochar initiatives. Catalyzing new innovation Innovations tend to lead to additional innovations. PROFOR’s cycle of support to forest governance processes is a good example of the interplay between innovation, incubation, and mainstreaming. Past support for innovation has been followed by incubation activities, and these in turn have catalyzed new innovations. In some cases, the final phase may be a collection of “lessons learned� – risks and failures being an inherent part of the innovation process. 19 Establishing a Network of Controlled Delivery Units for Forest Law Enforcement ‘Controlled deliveries’ are law enforcement operations which track illicit goods through the supply chain in order to identify key operators higher in the value chain, rather than low-level field operators. They require extensive international collaboration and appropriate institutional arrangements. PROFOR’s work on controlled deliveries (CD) of illegal timber aims to build knowledge of CD techniques among forest law enforcement professionals. In conjunction with this activity, a workshop was organized in Shanghai, China in December 2011 with 50 participants from 18 African and Asian countries and experts from the World Bank, the World Customs Organization, INTERPOL, the UN Office on Drugs and Crime, South Africa, Belgium and the Netherlands. The workshop covered forest and wildlife crime and law enforcement in China, global wildlife and timber smuggling routes, wildlife and timber methods and detection, controlled delivery techniques (including financial aspects), prosecution and group activities aimed at building a network of practitioners. The workshop identifeued a number of institutional and operational challenges and innovation needs that need to be addressed before CD operations can become mainstreamed in forest and other environmental law enforcement. These include legislative issues, political support; and technical and logistical resources. This PROFOR-supported activity was one of the first ones implemented by the International Consortium on Combating Wildlife Crime (ICCWC) established in 2011 and comprising of CITES Secretariat, INTERPOL, the United Nations Office on Drugs and Crime (UNODC), the World Bank and the World Customs Organization (WCO). WCO was the main organizer for the Shanghai workshop. Workshop on Evaluating the Impacts of Forest Certification Forest certification is widely promoted as a voluntary mechanism for delivering sustainably managed timber to the market. Despite wide-ranging support for certification, an empirically robust evaluation of its impacts on forest management has not been carried out. Most studies which have attempted to assess the impact of certification have had methodological shortcomings. For instance, a 2010 review identified only one case study on forest certification which met robust evaluation criteria. There is also a lack of a good understanding — or evaluation methodology — of market impacts of certification at firm and farm levels. Because of these deficiencies, it is not possible to assess the impacts of forest certification on forests, firms, employees, and rural communities with much precision. With PROFOR support, forest researchers from CIRAD, CIFOR and University of Florida launched a process to develop a robust methodology for evaluating the impacts of forest certification. This activity financed a preparatory event in the US and a workshop in Montpellier, France in November 2011. The workshop focused on forest certification research and how to measure the certification impacts. The workshop involved around 25 scholars and researchers from the organizing organizations, other forest management institutions, and representatives of forest producer country from Brazil, Cameroon, Indonesia and South Africa. 20 The findings from the workshop will be made available in a PROFOR discussion paper later in 2012. The main objective of the paper of this work is to provide guidance for setting up empirically rigorous evaluation studies of forest certification. This advice should help certification bodies and come up with new ways to track the the impact of their schemes. ADMINISTRATIVE OVERVIEW OF 2011 STAFFING Veronica Jarrin joined the PROFOR Secretariat as an Operations Analyst in July 2011. Veronica replaced Jane Li who left PROFOR to join the IFC, and is providing able assistance in tracking and reporting on PROFOR’s finances. An Ecuadoran national, she joined us from the World Bank’s Latin America and Caribbean region where she contributed to the preparation and implementation of Bank-financed projects as well as carrying out portfolio management. Jeff Alumai joined the World Bank Agriculture and Rural Development Department to work with the Forests Team in May 2011 as a Junior Professional Associate. He has been providing good support to PROFOR on a number of activities which are being implemented by the Secretariat. He comes to us from the Economic Policy Research Centre at Makerere University, Kampala, Uganda, and had previously worked as the Policy Coordination and Development officer for the Millennium Science Initiative (MSI) project at Uganda National Council for Science and Technology. COMMUNICATIONS AND KNOWLEDGE MANAGEMENT Last year tested and validated the solidity of our redesigned website launched at the very end of December 2010. Overall, content was more accessible, more up to date and viewed by more people than the previous year (10,968 unique visitors in 2011 vs. 6,748 in 2010). Our growing presence on social media platforms also started paying off by drawing additional visitors lured by bite-sized or nontraditional formats (short videos on Vimeo, still images on Flickr, 140-character messages on Twitter). The evolution of our pageview numbers, month by month, showed that traffic was strongly correlated with publishing activity and events such as the Nairobi Investment Forum in May (when e-mail invitations, a press release and several blogs all pointed back to the PROFOR site) and our periodic newsletters (May, July and November last year). Our traffic growth slowed slightly in the fall when more focus was put on finalizing publications and preparing activities in Durban than on generating new web content. (In addition: January's high pageview count reflects the work that accompanied the launch of the redesigned site; August represents a normal seasonal low.) These trends highlight the payoff of continuous attention to online content development and marketing. Other numbers of interest:  Our knowledge products (measured in terms of single downloads of pdf files) were downloaded 3,326 times by our Profor website users.  Our 51 videos on Vimeo were played 1,128 times and loaded over 25,000 times last year.  We had 725 followers on Twitter as of February 24, 2012 - three times more than a year ago. By definition, however, PROFOR's web activity does not reflect our other extensive efforts to disseminate knowledge in print or oral formats. Our experience in 2011 showed that face to face presentations and printed matter still carry a lot of weight with our busy constituents. We assume 21 our readers sometimes want a break from PDFs on computer screens and do their reading and learning in a variety of combinations and formats. We printed and distributed 500 copies of Forests, Fragility and Conflict, 500 copies of Forest Sector Public Expenditure Reviews, 500 copies of Forest Governance 2.0, 300 copies of Managing the Miombo Woodlands of Southern Africa and 300 copies of the Overview to Investing in Trees and Landscape Restoration in Africa (with CD). In addition to renewing and expanding our mailing list to reach a core group of influential forest development actors and practitioners, we made repeated efforts to carry out thematic mailings targeting for example the ICT community (with Forest Governance 2.0), lead economists at the World Bank (Forest Sector PERs) and the security, post-conflict community (Forests, Fragility and Conflict). All five reports were also made available on a special "PROFOR 2011" CD. Our outreach within the World Bank included well-attended seminars where PROFOR activity leaders and invited speakers addressed themes such as “Reducing Emissions from Land Use Change in Indonesia� (Dominic Elson, Treyvalor Consulting) and ongoing findings from PROFOR work on “Collective Forest Tenure Reform in China� (Jintao Xu, World Bank). We also took advantage of a number of gatherings at the Bank such as the 4th Potomac Forum on Illegal Logging and Associated Trade (May 2011) and the First Roundtable of the UNDP-World Bank Expert Group on Extractive Industries and Conflict Prevention (September 2011) to share relevant PROFOR publications on governance. Outside the Bank, major dissemination and speaking opportunities were structured around the following calendar. Forest Day 5 in particular represented an opportunity to communicate PROFOR knowledge on dry forests and landscape approaches to a wide, influential audience via presentations made by Rachel Kyte, the World Bank's Vice President for Sustainable Development, and Andrew Steer, World Bank Special Envoy for Climate Change. 22 May September November December Nairobi Forum on -San Diego conference on - Forest Certification -Dry Forests Mobilizing Private landscapes, forests and Workshop in Symposium* Investment in Trees and farming. Montpellier* -Forest Day 5, Durban* Landscape Restoration* -African Ministerial - Asia Pacific Forestry Conference on Climate Week in Beijing Smart Agriculture in - ENPI-FLEG Workshop Johannesburg in Chisinau -Forests Indonesia in Jakarta* * Sponsored by PROFOR BUDGET AND FINANCIAL PROJECTIONS Disbursements and outstanding commitments for PROFOR-financed activities in CY2011 totaled $6.5 million, a 45 percent increase from CY2010, but closely approximated by projected disbursement and commitment levels described in the planned CY 2011 Work Program. Disbursements totaled $4.2 million and outstanding commitments reached $2.3 million. PROFOR initiated 17 new activities, and maintained an active portfolio of 47 projects. The portfolio is, however, being scaled back to reflect budgetary constraints: by comparison, during the previous CY, we launched 26 new activities. During CY2011, 27 activities were brought to closure (compared with 17 activities the previous year). Disbursements and commitments in the Programmatic Window totaled $4.3 million, an 85 percent increase above the previous year, while the Strategic Window held steady at 2010 levels and totaled $2.1 million. Much of the increase in the Programmatic Window was due to the high level of disbursements incurred and commitments made and carried over, including those under the Liberia activity. In CY2011, a total of $2.8 million in donor contributions were received: from Switzerland ($0.3 million), United Kingdom ($1.6 million) and Finland ($0.9 million, including a new commitment of 0.4 million Euros paid in CY2011). The committed donor contributions for CY2012 are $2.1m, counting the unpaid secured contributions from EC ($2.0 million) and Switzerland ($0.1 million). The pipeline Work Plan has been scaled back to ensure that new programming is consistent with the availability of funding. With the support of Bank management, the Secretariat has launched a program to replenish the PROFOR Trust Fund, both by seeking additional contributions from PROFOR’s existing donor pool, and by expanding the group of donors supporting the program. In addition to donor fundraising, PROFOR activities continue to generate significant co-financing through partnerships. For every dollar committed to a PROFOR activity implemented during the CY2011, at least another $0.90 was generated in co-financing, a similar ratio from CY2010. The proportion is in reality much higher, but it has been difficult to assess this because of cash and in- kind costs which are covered through partnerships and by other funders and which may not be fully reported to PROFOR. Total PROFOR costs of around $75,000 for Forest Day 5, for example, were only a small proportion of the $481,000 raised by CIFOR for this event, in addition to CIFOR’s own staff and travel costs which supported implementation. Actual CY2011 expenditures and projected expenditures for CY2012 and CY2013 are shown in Table 1. Sources of funding are shown in Table 2. Tables 3 and 4 show expenditures by thematic areas and by window. Table 5 summarizes actual costs analysis by expense items in PROFOR’s Strategic Window. The Strategic Window includes Portfolio Administration and Management, Communications, Monitoring and Evaluation and other costs incurred by the Secretariat. 23 Table 1 24 Table 2 25 Table 3 Table 4 26 Table 5 27 ANNEX I: PROFOR SECRETARIAT STAFF Peter Dewees has been PROFOR Program Manager since May 2009. He is also Lead Forests Specialist in the World Bank Agriculture and Rural Development Department. Previously, he worked as Lead Environment Specialist in the Bank’s Europe and Central Asia region, where he was responsible for activities related to forestry, watershed management, and nature protection, with a particular interest in the role and impact of EU accession. Prior to joining ECA, he held the position of Lead Natural Resource Management Specialist in the Africa Region, where, in addition to his natural resource management portfolio, he also worked on issues related to environmental policy and institutions; refugee resettlement and reintegration; the conservation and development of cultural heritage; woodfuel management; and community-driven natural resource management activities in Eastern and Southern Africa. He holds a DPhil from Oxford University. Tuukka Castrén is a Senior Forests Specialist and work on forest law enforcement and governance through PROFOR in the World Bank Agriculture and Rural Development Department.. Prior to working at the World Bank, he was with the Ministry for Foreign Affairs, Department for Development Policy in his native Finland, where he first joined the Ministry as an economic adviser, and later became the senior adviser for development policy. He has also worked in private sector forest consulting for many years earlier in his career. Mr. Castrén has university degrees both in forestry and economics from the University of Helsinki. Diji Chandrasekharan Behr is a Natural Resource Economist with PROFOR, and works on the livelihood and cross-sectoral pillars of PROFOR. Her professional interests include adaptation to climate change, impact of sectoral policies on forest resources and forest dependent people, community-based natural resource management, and institutional dimensions of natural resource use (specifically, tenure and rights). Diji has worked in South Asia and more recently in East and West Africa. She is also involved in conducting analytical studies and strategic environmental and social assessments. Diji holds a Masters in Agriculture and Applied Economics from the University of Wisconsin-Madison, and a Ph. D in Natural Resource Management and Policy from Cornell University. Nalin Kishor is a Senior Natural Resources Economist, and also works on forest land enforcement and governance through PROFOR in the World Bank Agriculture and Rural Development Department. His work interests focus on the governance of sustainable forestry and natural resource management, trade growth and income distribution, institutional reforms, incentive compatible systems and diagnostics approaches and indicators for forest governance. He is a co-author of, The Quality of Growth (OUP) , a book on sustainable development. He holds a Ph. D in economics from the University of Maryland--College Park, with a specialization in natural resource and environmental economics. 28 Flore de Préneuf joined PROFOR in April 2010 as Communications Officer. Her professional background is in journalism and photography. Based in Jerusalem in 1998-2002, she was a freelance contributor to Liberation, the Financial Times, the Washington Post and the Los Angeles Times and Middle East correspondent for Salon.com, among other French- and English-language publications. Since 2005, she has worked at the World Bank in a range of communications positions. She holds an MPhil in Russian and East European Studies from Oxford University and a degree in economics and political science from the Institut d’Etudes Politiques in Paris. Veronica Jarrin has been PROFOR Operations Analyst since July 2011. Her main responsibilities include the trust fund’s financial management and work program coordination. She is an Ecuadoran national with a five-year “Bachelor plus� degree in Finance from the Monterrey Tech in Mexico. Prior to joining PROFOR, Veronica worked in the Latin America and Caribbean region at the World Bank's offices in Ecuador, Mexico and Washington DC for more than a decade, contributing to the preparation and implementation of Bank-financed projects as well as carrying out portfolio management for several units. Edgar Maravi is a Natural Resources Specialist for the PROFOR team, and works on activities mainly in Latin America. Originally from Peru, his professional interests revolve around forest policy and legislation reform; forest governance, forest administration reform and climate change. Prior to joining the Bank in 2004, he was Director of WWF-Peru. He has also worked at the Smithsonian Tropical Research Institute, and held various positions in rural development in the public sector and international agencies in Peru. He holds a Master’s Degree in Public Policy from Harvard University and a degree in Agricultural Engineering, specializing in tropical agronomy, from the Universidad Agraria in Peru. Godfrey Jeff Alumai is a Junior Professional Associate (JPA) in the World Bank Agriculture and Rural Development Department working with the Forest Team. Before joining the JPA program, Jeff was an Assistant Research Fellow at the Economic Policy Research Centre (EPRC) in the Department of Macroeconomics at Makerere University, Kampala, Uganda. Prior to joining EPRC, Jeff worked as the Policy Coordination and Development officer for the Millennium Science Initiative (MSI) project at Uganda National Council for Science and Technology (UNCST); and a part time lecturer at Kyambogo University, Uganda. Jeff holds a Masters in Development and Natural Resource Economics from the Norwegian University of Life Sciences, Norway and a BA in Economics from Makerere University, Uganda. Genalinda A. Gorospe joined the PROFOR team in 2008 as the Program Assistant. She has worked more than 15 years for the World Bank and IFC in areas of international finance, corporate governance, procurement and budget monitoring, event planning and office management. Her previous positions included working with the Philippine Veterans Bank as Chief, Loans & Discounts department and as Executive Assistant to the Ambassador of Yemen to the United States. She holds a Bachelor’s degree in Accounting/Banking & Finance from the Philippine Women’s University. 29 ANNEX II. OVERVIEW OF ACTIVITIES, BY THEMATIC AREA This chart includes all activities that were in some way active during calendar year 2011. Additional information on the status of each activity is provided in Annex III. 30 31 32