Barriers for SMEs to approach sustainability: myth or reality?

It is becoming less rare to find Small and Medium Enterprises (SMEs) that integrate social and environmental concerns to their business strategy. They try to achieve their economic goals while creating shared value for society (employees, community, suppliers are included) and preserving the environment.

When talking about businesses that follow the sustainability path, including in their strategy and procedures social and environmental concerns, we are talking about responsible business. The term Corporate Social Responsibility (CSR) in this blog doesn´t refer to having a CSR department in the enterprise, but to include sustainability in the business strategy or at least start implementing practices towards it.

In spite of this growing interest of SMEs to this approach, still, there are many managers leading small companies that aren´t convinced about adopting this model. There are different arguments set by the sustainability “skeptics”, most of them are more a myth than a reality; I will try to explain why in each case.

 

1)    “IT IS TOO EXPENSIVE!” Myth.

Being responsible while making business and thinking about the consequences of the decisions that are being taken doesn´t cost money. But not only in the strategy phase is this argument a myth. When it comes to implementing actions in there are many options that don´t necessarily need to cost money, for example:

–     Think about the packaging being used. Could you get rid of it? This last option would even save money!

–     Separate the waste and ensure it is recycled.

–     Reduce the use of paper in the office, or use paper that comes from certified sustainable sources.

–     Promote work & life balance for employees offering benefits such as flexi-time, home office, make agreements with local restaurants for discounts, training, integration days, volunteer hours, amongst others.

–     Offer local communities production scraps that could be useful for them, to create new things or to recycle.

–     Employ local people and train them.

–     Offer local organizations in-kind support such as: spaces for events, communication channels, being a donation point, training their volunteers, etc.

Be creative! These are only some options, but there are many adding value activities with no monetary cost.

 

2)    “IT IS TIME CONSUMING, WE HAVE OTHER URGENCIES.” Truth, but….

Being responsible is a mindset. There is almost no enterprise where managers don´t take the time to plan a business strategy. Is it really that much extra time to include social and environmental aspects in the planning?

If everyone that is part of the company starts including in their day-to-day decisions social and environmental concerns, a responsible business culture will be built. Decision making is a process that can be more or less formally established, but if “responsibility” is included as a binding value no extra time will be needed to “think about sustainability”.

It is true that not always small enterprises take that much time to plan or analyze decisions and in many cases this planning is very informal. Also, not all SMEs have defined internal decision making procedures. If this is the case, then including CSR to the picture could be time consuming. But it is also truth in these cases that without proper planning or procedures, the economic sustainability is at risk.

3)    “MY COMPANY IS TO SMALL THAT IT WON´T MAKE A DIFFERENCE.” Myth.

According to the IFC, SMEs “account for about 90 percent of businesses and more than 50 percent of employment worldwide”.  So if every SME includes CSR as a way of doing business, the impact it could have is huge. One would think a small action can´t change the world, but it definitely can make a difference and inspire others.

 

There are many organizations that offer support to SMEs to include CSR and start being more sustainable without cost. Learning more about this business approach and talking with your team about it can be a first step!
Some interesting links for SMEs who want to go for CSR:

 


Crisis: an opportunity to fill in the gaps

In 2001 Argentina entered a deep economic, political and social crisis. The currency lost its value, people had their money locked up in the banks, looting and protests were a daily sight… we even had 5 presidents in ten days. “In 2001, the year the crisis stroke, 38,5% of the Argentinean population lived in poverty and 13,6% in extreme poverty”.

Nevertheless, this grim situation was a inspiring for lot of people. Whether it was for own need or for empathy, it motivated many to start new things in order to improve the situation, it motivated innovation and solidarity. The gaps in the system had to be filled because they were affecting people: these gaps were pushing more and more people into poverty and marginality. Optimists and fighters started thinking about new things, new ways of solving social problems.

Crises are one side of the coin; the other side is all the opportunities that it creates. When something is gone, it leaves an open space for something new to happen.  Many people decided they would make it happen:   while some felt compelled to fill in the gaps with creative solutions that could help the society recover from the crisis, others heard about these new solutions and decided to trust  and support them.

These people who decided to give new solutions to social problems in sustainable ways are called social entrepreneurs. Their projects took different forms: NGOs, social business, cooperatives, new products inside regular business, are some of them. Social entrepreneurs are everywhere, and despite the institutional form their project takes, the idea is the same: give a solution to a social problem using their entrepreneurial skills. This doesn´t necessarily mean through a business, it means that they can “organize, create, and manage a venture to make social change”. The goals went from creating inclusive economic activities, to supporting education, or providing access to housing or health.

A great example of this social entrepreneurial spirit is Toty Flores. He lost his job during the crisis of 2001 and led the creation of a cooperative of unemployed workers that didn´t want to live out of the government subsidies. Through this cooperative called “La Juanita”, they decided to create their own income and as a first step they set up a bakery and a serigraphy workshop. The years went by, and they continued growing and looking for new economic activities. This is when Toty Flores met Martín Churba, a fashion designer that owned a very well known brand of women clothes. Martín Churba was already an entrepreuner, but Toty offered him the opportunity of including a social drive to his work. This is how they created the project “Let´s make work a trend” (Pongamos el trabajo de moda) that consisted in designing, producing and selling trendy and fashionable uniforms for workers.

The case of Toty Flores is just one example of and social enterprise that was born because of the crises. “La Juanita” with different projects they launched aimed to help fill in one of the many gaps the crises left. Lots of other social entrepreuners started working in that same moment in the same direction, and also in the years that came after 2001, because the gaps were so many …  and they still are. Of course the solution is much more complex and requires the engagement and action of different social actors, but these kinds of projects definitely contribute to it.

 

Some references

 


How to produce food in rural areas? It may not be easy…

As astonishing as it seems, in many rural areas populations suffer hunger and even malnutrition. In some places it doesn´t go as far as suffering hunger but there is a lack of quality food that leads to health problems that come from an unbalanced diet. A lot of you might wonder with me, how is this possible? Aren´t the rural areas the ones producing food?

Rural worker in coffee plantationIn many regions rural poverty and rural hunger specially are caused by climate conditions, land property problems, war, unstable food markets and the fact that the farmers grow crops to sell that aren´t necessary a source of food or at least not on their own (coffee, tobacco, soy, sugar cane, only to name a few). But there are some regions where these are not that determinant issues and rural families could grow different kinds of crops and vegetables to guarantee balanced diets without drastic transformations:  with a relatively low investment they could access seeds to grow their own food. But many communities have lost their food traditions that ensured a proper nutrition because of the large scale agricultural models and the migration of young people to the cities for employment opportunities. So a new question arises: will the access to seeds for food guarantee a healthy diet?

Child in rural areaIt´s in this matter where I believe schools can play a key role. In many rural areas schools provide a daily meal for the children and it´s a place for socialization for the whole family. So the influence they can have in teaching healthy food habits is great.

Many governments, international agencies and NGOs have decided to approach rural development with projects that are based in schools and that aim to improve nutritional habits from the educative institutions as a starting point.

The projects I find especially interesting are the ones where children grow in their own school a vegetable organic garden. Children not only learn how to grow their own food but healthy and safe ways to consume it. Also, they can be agents of change.

Children together

Huerta Niño Foundation is a NGO in Argentina focused in reducing child malnutrition. They have already helped 200 schools to create their own vegetable garden, helping them install not only the garden but the irrigation system and training for it to be sustainable in time and environmentally. in their families and communities.

Huerta comunitariaIf education towards food security is also done in a participative process, including the whole community, it could be the base of food sovereignty of that population.   A good example of this kind or projects is “ProHuerta”, an initiative carried out in Argentina by the National Institute of Agricultural Technology. For more than 20 years they have been implementing this project in schools but also in communities and with families in poverty. The project offers technical support and the resources for the people to build their own vegetable organic gardens. The result of the convergence of the local knowledge, the technical assistance, and the innovative ways of producing healthy organic food based in participative and collaborative approaches promotes social integration and cohesion. It also generates territorial rooting and food security for the most vulnerable population, with their own capacities as a starting point.”

 

I believe these leanings are inspiring, because food habits are part of a community´s tradition. So including their previous knowledge through participative processes might be determinant for the success of these kinds of initiatives, and for a real sustainable outcome.

 

 

Some references

 


What will you do with your old mobile phone?

Have you ever thought about what happens with things when we finish using them? And how much waste was created in order to produce them? For a long time I´ve been aware of the importance of recycling and have tried to dispose my waste in a responsible way. But there are certain products that usually don´t have a special bin in the cities´ recycling systems –generally divided in plastic, glass, paper and “others” that won´t be recycled- such as electronic products.

New models of computers, laptops, tablets, phones that can do almost everything –probably even your laundry-, MP3 & MP4 players, and other electronic gadgets, keep coming up with better functions. Everyone is in the race to have the newest. But what happens with the old ones? Do we keep consuming and throwing away as if it had no consequences?

 

Electronic products are produced mainly with plastics, metals, glass, ceramic and coltain. When these materials are disposed in a landfill or incinerated they create a negative impact in the environment. But this impact can be avoided, because lots of these materials can be recycled. Recycling these materials wouldn´t only help reduce waste, but also reduce unnecessary extraction of natural resources that harms the environment.

Consumers have an important role to play because they are the ones that have the product and can decide what to do with it: turn it into waste or turn it into something new. But even if the products are their property, companies should take responsibility too because they are offering in the market products made of  materials that can be harmfull if not treated in the right way. Producers should look for efficiency in their production process and offer their clients alternatives for a responsible disposal of the product they have purchased.  With an intelligent waste plan, possibly old products could be recycled into materials for new products.

Some companies in the electronic industry are already in this path and have launched different recycling programs. They have still many challenges, like improving communication to reach all of their clients, make the incentives more attractive, and include recycled materials in their new products, but at least it’s a starting point!

Some options if you are thinking to discard your old electronic devices:

Now that you know there are options, what will you do?

 

References:



Gran Chaco Americano: a forest in South America still suffering deforestation.

Every day the world loses more and more biodiversity because of the lack of conservation measures to prevent the destruction of ecoregions. Thinking about this reminded me of an interesting work different organizations and institututions have developed in order to conservate the ecorregion called “Gran Chaco Americano”.

WWF defines an ecoregion as a “large unit of land or water containing a geographically distinct assemblage of species, natural communities, and environmental conditions”.

The “Gran Chaco Americano” is an ecoregion shared by different countries: Argentina, Bolivia, Paraguay and a small portion of Brazil. It is over 1 million km2 and has a very rich biodiversity and an important cultural value. It is the home of different local etnias and to more than 3,400 plant species, approximately 500 bird species, 150 species of mammals, 120 species of reptiles and approximately 100 species of amphibians.

 

Historically in this area the forestry industry (that many years ago didn´t produce in a sustainable way but as an extractive industry) and the cattle breeding have created negative impacts in the environment. These activities lead to deforestation, and the overgrazing affected the natural pastures and biodiversity. This loss of pastures has increased the growth of woody plants, that has increased the fires leeding all to the soil´s degradation.  Since the beginning of the XX century another economic activity has started also creating impact in the landscape: this region has become an agricultural area having an effect in the deforestation problem.

The effects of this process not only affect the biodiversity but impact the local communities´way of life. Heavy precipitations combined with degradation of the soil generate floods and reduced the water holding capacity, having serious concequences during the dry seasons. I had to travel to that region several times (to evaluate a project that aimed to provide water for local people), and the concecuences of deforestation in the area could be easily seen: local communities suffer not only the lack of water, but these groups that had historically made a living out out of the ecosystem aren´t able to do it any more because of the loss of natural resources.

This is still going on, in May 2013 a local report claimed that over 13.000 hectares of forest had been deforestated. But even though this area is still being degradated by the lack of sustainable approach of the local economic activities, there are different awareness projects and campaigns to change the way things are being done that should be pointed out.

At the beginning in 2003 The Nature Conservancy (TNC), the Fundación Vida Silvestre Argentina (FVSA), the Wildlife Conservation Society (WCS) in Bolivia, the Fundación para el Desarrollo Sustentable del Chaco (DeSdel Chaco) in Paraguay, and a large number of specialists from those three countries, have been part of the “Gran Chaco Americano Ecoregional Assessment”, integrating a large variety of previous efforts carried out by other organizations.

This Ecoregional Assessment is an interesting work that aimed to create a workable plan for the region that considers economic activities. It is a good tool for local stakeholders (governments, agricultures, companies, etc) to plan their activities in a sustainable way, being aware of the impact they could have in the biological diversity. If focuses in different alternatives as regional planning, integrated river basin management, sustainable agriculture and livestock breeding, fire management practices, amongst others.

Other sustainable economic options for local communities to develop without jeopardizing the environment could be the implementation of REDD+ projects. These are initiatives that promote alternative economic activities to deforestation in local communities, which receive an income by doing this, as part of mitigation efforts related to CO2 emissions. Conservation of the forest is a way to mitigate CO2 emissions in the world because of the capacity of the forests in the area to absorb this CO2.

Other organizations and institutions are actively working to create conservation areas. This is the case of “La Fidelidad”, a project to create a legally protected area in this argentinean 5.000 hectares land extension whose previous owner had conservated totally. This project supported by local NGOs, politicians, opinion leaders, companies and regular citizens is not only having positive results in the protectionist objective, but it is also raising public awareness about the situation of the whole ecoregion.

These are some of the projects going on, but there are other interested actors in society creating awareness to conservate this ecoregion and making efforts to changing things through different ways. I truly hope they can achieve this objective and we can save the Gran Chaco Americano, the second largest forested area in South America, after the Amazon.

 

 

 

Some references:

http://www.acdi.org.ar/agregados/docs/17248016215248e0b098226.pdf

http://www.agrotecnicounne.com.ar/biblioteca/Anexo%203-%20Satorre%20en%20colores-1.pdf

http://awsassets.wwfar.panda.org/downloads/dossier.pdf

http://www.avina.net/esp/oportunidades/gran-chaco-americano/

http://www.bosquenativo.org/2013/06/gran-chaco-sudamericano-sufrio-perdida-de-bosques-de-13-714-ha-en-de-mayo/

http://www.biodiv.org.ar/index.php/prensa/124-parque-nacional-la-fidelidad-isueno-de-los-ambientalistas-o-realidad-de-todos

http://cegae.unne.edu.ar/gtz/Proyecto.pdf

http://www.fvsa.org.ar/situacionambiental/uso%20y%20deg%20del%20suelo.pdf

http://www.fvsa.org.ar/situacionambiental/chacoseco.pdf

http://www.gepama.com.ar/pengue/pdf/DESERTIFICACIONlemondeMORELLOPENGUE.pdf

http://redaf.org.ar/wp-content/uploads/2008/02/gran-chaco_version-1-9-07_anexos-final.pdf

 


Can new economic activities be created in cities?

The economic inequality and poverty that I have seen during my whole life in my city -Buenos Aires- and in all of the Latin American cities I´ve been to, is something I always considered unacceptable. Knowing that it´s not only an issue in my home-town or Latin America because in cities all over the world more and more people are daily drawn into poverty or born in these conditions,   makes it even worst. With the hope that our societies can find workable solutions to handle the complexity of poverty in urban centers is that I raise several questions to some of the current approaches to this issue.

Near 4 billion people live on less than $2.50 a day in the world[1], and an estimated one quarter of the world´s total poor are urban residents[2]. Urban areas are seen by the population as wealthier places, with much more opportunities to make a decent living. Migration from rural to urban areas is going on for years since industrialization, causing a “pathological growth” as E. F. Schumacher defines it[3].   Much has been and is being discussed in how to prevent this migration, focusing mainly in promoting sustainable economic activities in rural areas. There are successful experiences in local community development and a lot of ongoing projects.

Urban poverty is different from rural poverty. It has different characteristics and therefore different challenges. So creating “islands” of successful experiences of developing projects in local communities might not be possible to export to the cities.

So what about the people that live in poverty in the cities? The traditional way of making a living in a city is by being an employee. But unemployment has dragged millions of people into poverty. Governments and NGOs, and different types of private charity, work to alleviate the impact of this situation, but this is not a sustainable solution.

 

One of the solutions that are becoming more popular every day is the promotion of entrepreneurship in this demographic segment also known as Bottom of the Pyramid (BoP). This boom of entrepreneurship also is promoted by governments for middle class population that is unemployed but has the education and resources that could allow them to achieve a successful enterprise. But is this solution for everyone? Can the promotion of innovation, creativity, fundraising skills and network building be applied to the poorest population?

Muhammed Yunnus and the Grameen Bank´s experience give as a hint that it is possible, and that it can work out for many people. With a different kind of approach and training, funding through microcredits give poor people the chance of making a living out of their own enterprise. Nevertheless the question is still there, is this a solution for the 4 billion people in the BoP? Is it possible for all to become entrepreneurs and succeed?

Another path encouraged by Yunnus is Social Businesses. In his words “they are just like any other business; but for social objectives and not for personal gain or dividend.”[4] The driver for investors is a social outcome and all the gains should be reinvested. According to Yunnus´ proposal, this type of businesses can´t be mixed with Profit Making Businesses. Won´t this leads us to create a divided economy, into an economy for the poor and an economy for the rich?

Different type of Social Enterprises, meaning organizations that “operate in an entrepreneurial fashion while accomplishing the charitable goals of the organizations that house them[5], don´t propose this separation. But for these Social Enterprises not to fail large businesses need to be involved.

Can large companies be part of the creation of new types of economic activities for urban residents in order to reduce poverty?

Porter and Kramer propose creating “Shared Value[6]. This is not a redistribution approach but “about expanding the total pool of economic and social value.” Companies and business leaders that understand  that “a business needs a successful community, not only to create demand for its products but also to provide critical public assets and a supportive environment. A community needs successful businesses to provide jobs and wealth creation opportunities for its citizens” will look new ways to include the BoP in the business strategies. This demographic segment can´t be approached in the conventional business-way, population needs have to be understood and innovative ideas and technology are needed in order to create products and services that create social inclusion and are still profitable. Environmental issues have to be considered too, because some of the experiences that have been made base in selling small units of sale with low margins of profits but this creates a waste problem.

Businesses are needed on board if the goal is to eradicate poverty. The challenge by including them is that as important as it is to create sustainable economic activities that create profit, the inclusion of 4 billion people that live in poverty shouldn´t be seen only as expanding into a new market.  At the end of the day (and at the beginning) the BoP is PEOPLE. Including them to the market can be profitable but our goal should be improving their life conditions. Can businesses be the guardians of that goal?

Different new types of economic activities are being developed; none of them seem to be the only solution. Could they all be? Could the interaction of all of them be the solution for poverty? The answers will be in the learnings of all the practical experiences that are being carried out globally.

 

References:


[1]http://www.globalissues.org

[2]http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&theSitePK=523679&entityID=000333037_20080324021722&searchMenuPK=64187283&theSitePK=523679

[3]Schumacher, E.F. “Small is beautiful: economics as if people mattered.”

[4]http://www.muhammadyunus.org/index.php/professor-yunus/publications/creating-a-world-without-poverty

[5]Social Enterprise Alliance. “Succeeding at Hard-Won Lessons for Nonprofi ts and Social Entrepreneurs”. San Francisco, 2010.

[6]http://www.hks.harvard.edu/m-rcbg/fellows/N_Lovegrove_Study_Group/Session_1/Michael_Porter_Creating_Shared_Value.pdf

 


Youth Olympic Games 2018 in Buenos Aires

Buenos Aires has been chosen as a city to have the Youth Olympic Games in 2018. In order to be host of this event the city will have to make some infrastructure work and investment in different items.  This sport event that raises global interest is the perfect opportunity to make these investments not only useful for the Olympic Games but also for the local community. This long-term approach gives a new meaning to the Youth Olympic Games by impacting the city in a much more sustainable way.

Although this proposal is not set in the official website of the project, where the Social Responsibility aspects mentioned are orientated to education and cultural aspects, the project seeks to leave a legacy to the city regarding infrastructure.  So in addition to promoting the Olympic values, cultural exchange, sports and healthy habits to young people, the promise is that 2.000 families will have access to housing after the Olympic Games are over. In this way the 112 million dollar investment will be an investment oriented to the wellbeing of the community in the area of Villa Soldati and Comuna 8, as well as in the sport event.


Social housing is a relevant issue for the project because of the problems that the city has in this aspect, especially in the area where the Olympic Villa will be built. Over 6.000 families live illegally in the nearby area and this has generated violent social conflicts in the past. Several social manifestations have occurred in 2010, when some of these families camped illegally in a public park of the area as a way of demanding the government to solve the housing problem. 

The idea of turning the Olympic Village into social housing isn´t new, the sustainable project of London 2012 also included this item and it has been an inspiration for the project. But we have to bear in mind that this experience is very useful to learn about not only regarding the successes but also about the challenges.

The structure of the Olympic Village in London, in the area of Stratford was designed completely with environmentally sustainable materials. Also, it needed some adaptation from being a Village to being households. They were turned “from one-bed flats to 5-bedroom townhouses, have had temporary bedroom partitions removed and new kitchens fitted (the athletes all dined together in a communal canteen)”.

Apart from the architecture of the houses, the neighborhood selected is convenient because it´s near the city, with good transport connections, and improved public spaces like a park, shops and a school just to mention a few. Thinking not only about the apartments but of the whole dynamic of the neighborhood and if it will be functional for the daily life of the people is necessary for this urban development to be successful.

Thinking about London´s challenges, social housing meant to be one of the largest legacies of these games but one year later it isn´t clear yet if the expectations will be met or if it will be a failed goal. The process of inhabiting these houses hasn´t concluded yet and as the neighborhood has improved substantially the prices of these apartments are rising, and the initial target people aren´t being able to pay for them.

This experience might mean that it wasn´t rigorously planned into who would be the people to live in these houses. Maybe if it had been decided previously and the renting rates or in the payment plan (if they will be owners of the houses) would have been fixed, the outcome would be different.

Different specialists in social housing recommend participatory processes from the beginning of the project. Understanding the communities´ lifestyle and needs will also be helpful to design the houses and the common areas, and should be a key input for the architecture project. A social housing project should have as a final goal the improvement of the quality of life of the people, regardless from any other positive outcome that may result for the city. Another argument for this recommendation is that when the futures residents are involved in this process, greater is the success because the sense of belonging is higher and they can embrace these houses as theirs. Some authors even consider the people should be part of the construction of their own houses. So this could be an option from the beginning, when building the Olympic Village or in the second stage when the adaptations are made after the Olympic Games finish.

It´s important that the organizers Youth Olympic Games to be held in Buenos Aires in 2018 take the challenges that we can learn from London 2012 in consideration and not only the positive outcomes. The housing prices of Villa Soldati might increase because of the investment being made and it´s their duty to make sure that the social goal will be met and the “legacy” of this sport event won’t turn into a good real estate investment.

 

 

Sources:

“Villa Soldati: contexto social en zona marginada.” – Agencia CNA. http://www.agenciacna.com/2/nota_1.php?noticia_id=36679

“Nuevas tomas tensaron la situación social.” – Diario Popular.
http://www.diariopopular.com.ar/notas/56626-nuevas-tomas-tensaronla-situacion-social

“2012 London Olympics to regenérate one of the most poor areas of the Capital” – Citymayors
http://www.citymayors.com/sport/2012-olympics-london.html

“Villa Olímpica en Soldati, una inversión de US 112 millones” – Diario Z
http://www.diarioz.com.ar/#/nota/villa-olimpica-en-soldati-una-inversion-de-us-112-millones-28668/

“One year after Olympics, poor in London yet to feel benefit of the games.” Interaksyon
http://www.interaksyon.com/interaktv/one-year-after-olympics-poor-in-london-yet-to-feel-benefit-of-games

Official website Youth Olympic Games 2018 Buenos Aires
http://www.jojba2018.org/

“London 2012: Affordable housing sidelined in Olympic regeneration.” The Guardian.
http://www.theguardian.com/housing-network/2012/jul/27/affordable-housing-sidelined-olympic-regeneration

“Residents start making homes in Olympic village.” The Guardian.
http://www.theguardian.com/sport/2013/nov/26/olympic-village-residents-homes-stratford

“Se extiende la toma de tierras en la capital y el conurbano”. La Nación.
http://www.lanacion.com.ar/1333484-se-extiende-la-toma-de-tierras-en-la-capital-y-el-conurbano

“Vivienda Social en Latinoamérica: una metodología para utilizar procesos de auto-organización.” Nikos A. Salingaros, David Brain, Andrés M. Duany, Michael W. Mehaffy y Ernesto Philibert-Petit (Grupo de investigadores de la Estructura Ambiental – ESGR).
http://www.math.utsa.edu/~yxk833/socialhousing-spanish.pdf

World Bank website for Urban poverty and Slum upgrading.
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/EXTURBANPOVERTY/0,,contentMDK:20227683~menuPK:7173807~pagePK:148956~piPK:216618~theSitePK:341325,00.html

 


REDD+: Challenges of the Main Outcome of COP 19

The Warsaw Climate Change Conference 2013 (COP 19) raised a big debate about governments´ real commitment to sustainable development and tackling climate change. Thirteen of the most influential organizations from the civil society withdrew the Conference one day before it was over, as a way of protesting for this governments´ lack of action towards solving climate change issues.

COP 19 Walkout

Nevertheless, according to United Nations Framework Convention on Climate Change, the Conference ended “successfully”. UN presents as one of the key goals achieved, the agreement for The Warsaw Framework for REDD+ as a way to “reduce greenhouse gas emissions from deforestation and degradation of forests (…) backed by pledges of 280 million dollars financing from the US, Norway and the UK.”

 

 

At first sight, this outcome seems really positive, and it is compared to no agreement at all. But, did this agreement meet the expectations that were set? Is this a long-term solution for climate change?

REDD+ stands for Reducing Emissions from Deforestation and Forest Degradation and it is considered a mitigation solution because  forests´ contribution to preventing climate change is by “cleaning” the air in opposite of reducing emission production. Reading this definition can lead us to make a quick assumption: that only agreeing in mitigation solutions is tackling one part of the problem and that countries should commit to reducing their emissions as well.  But rather than making quick assumptions let´s try and analyze if the decisions made are really helpful for REDD+ projects as a climate change solution.

REDD+ programs are about working with local communities that live in forests and use forests as a source of living, so they chose conserving the forest rather than degrading it. This can be achieved if the “(…) compensation they receive is higher than what they would obtain from alternative forests uses”, and giving this compensation is REDD+´s aim. Funding for this kind of compensation can come from non-market sources (such as international aid) or market sources. Following different monitoring, evaluation and verification technical methods, REDD+ projects can deliver forest carbon credits that could be purchased in the carbon credit market.

Deforestation

REDD+ was launched in Bali 2007 and since then there have been developed several experiences, mainly pilot ones, which have been successful in these first phases, regardless the challenges they still have to overcome. But, as Anelsen expresses in the book “Annalysing REDD+”, “we probably need another 3–5 years before we can really know if REDD+ works”. That COP19 has agreed in keep on funding REDD+ initiatives its good news, because it means that projects that have recently started and are still in a consolidating phase will have more time for this process to go on. And that the effort and resources invested by governments, private sectors and communities haven´t been in vain. But going back to our first question… is it enough?

The failure or success of REDD+ as being a mechanism to reduce climate change not only depends on the funding COP 19 can provide. It also depends on the demand of REDD+ credits in the carbon credit market. There is a potential  REDD+ projects aim to deliver carbon credits for this market, and this will give sustainability to de projects creating, in the long run, less dependency on funding by aid agencies or international organizations´ funds.  Possible buyers for these credits could be on the private sector in the voluntary market or governments that haven´t reached their emission goals.

According to the NGO Conservation International in its paper “REDD+ Market: Sending Out an SOS”, “project level activities for REDD+ have evolved rapidly over the past decade from a small number of pilots to a significant number of high quality and standardised activities delivering emission reductions and multiple environmental and social benefits. The speed of their success has, however, not been matched by the development of international and regional markets towards which they had aimed.” And as they claim, this will be worst in 20 years if something isn´t done, and prices will be so depreciated that communities won´t have more motivation for being part of REDD+ projects. Two possible reasons in why the demand hasn’t been growing are the lack of trust in the REDD+ mechanism and little incentives for purchasing credits.

The first reason mentioned, lack of trust, might seem to have been approached by COP 19. By delivering the Warsaw Framework for REDD+ we could say some progress has been made in building trust around REDD+ carbon credits. On the contrary, regarding incentives not much was accomplished. Incentives could have been created for companies and governments if countries would have agreed in emission targets and caps[1]. This definition would have a real effect in the demand of carbon credits, but no nation set or deepened their targets, even worst Japan scaled down its 2020 goal.

The 280 million dollar funding that will be oriented to REDD+ will keep projects ongoing, but won´t be helpful in encouraging the demand for carbon credits to grow.  Without incentives for the demand carbon credit prices are still going down.  Explained better by Reuters journalist Susanna Twidale “Investment under the U.N.’s $315 billion Clean Development Mechanism (CDM) has ground to a halt as the value of the credits they generate has plunged 95 percent in five years to around 0.30 euros, crushing profits that investors count on to set up carbon-cutting schemes in the developing world.

After looking more deeply into the most successful outcome of COP 19 we reach to the conclusion that countries have to agree in targets. This not only will encourage reduction of emissions from pollution, but will also create real incentives for mitigation processes. So, even if the international decision is to focus only in mitigation processes, as in Warsaw, commitments in emission targets should be made if we want long term solution that don´t depend only in aid and non-market funding.


Sources:
“Analysing REDD+: challenges and choices, Center for International Forestry Research”, CIFOR – Bogor, Indonesia.
http://www.cifor.org/online-library/browse/view-publication/publication/3805.html

“Acuerdo descafeinado en la Cumbre del Clima de Varsovia”, El Mundo. http://www.elmundo.es/ciencia/2013/11/23/5290e99563fd3de35a8b4574.html

“Civil Society Groups Walk Out of Climate Talks in Protest”, Environment News Service.http://ens-newswire.com/2013/11/21/civil-society-groups-walk-out-of-un-climate-talks-in-protest/

“NGO´s and Social Movements Walk Out of Warsaw”, WWF. http://wwf.panda.org/?212532/NGOs-Social-Movements-Walk-Out-Of-Warsaw-Talks

“REDD+ Market: Sending Out an SOS”, Conservation International. http://www.conservation.org/global/carbon_fund/Documents/REDD+Market-SOS.pdf

“The Warsaw Framework for REDD Plus: The Decision on Red Finance.”, REDD Monitor. http://www.redd-monitor.org/2013/11/29/the-warsaw-framework-for-redd-plus-the-decision-on-redd-finance/

United Nations Framework Convention on Climate Change. http://unfccc.int/meetings/warsaw_nov_2013/meeting/7649.php

“U.N. carbon offset market seen ‘in a coma’ for years after Warsaw”, Reuters.
http://www.reuters.com/article/2013/11/29/us-un-carbon-idUSBRE9AS0H520131129

UN REDD+. http://www.un-redd.org/


[1] Caps are maximum amounts of CO2 emissions per country.

 



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