Markets working to support sustainable development

In the News: 2nd October 2014

02 Oct 2014

Here you will find a round-up of all the latest news and events in mechanisms from around the world.

Climate and carbon

 

New York City. Source: Wikipedia

Deforestation

  • Frances Seymour, Senior Fellow at the Center for Global Development, welcomes two new REDD partnerships – one between Peru, Norway, and Germany, and another between Liberia and Norway. Seymour gives six reasons for why it a positive step: it will maintain momentum in REDD finance; it will encourage further linkages with indigenous people; there will be continued leveraging between national and international policy arenas; it could make the case for more partnerships in Africa; it will encourage action from both the public and the private sector; and it would allow further study of the benefits of the impact of REDD.  
  • Why forests? Why now? The science, economics, and politics of tropical forests and climate change,” is the upcoming book from the Center for Global Development. It will show that tropical forests are essential for sustainable development and that payment-for-performance finance from REDD would bring success.
  • The UK, Germany and Norway have pledged to enter up to 20 programmes over the next couple of years to pay countries for reducing  deforestation. The declaration, which could be worth more than £700m, has also been signed by Kellogg’s, Marks & Spencer, Barclays, Nestle, Cargill, Asia Pulp and Paper, and NGOs including RSPB, WWF and IUCN.
  • Policy makers should look at the lessons learnt from Brazil, argues Chris Meyer, Alisha Staggs and Dana Miller. Various incentives to halt deforestation have been established, including: the implementation of timber certification through the FSC; strategies for zero deforestation for the beef industry by farming cattle on already cleared land; and rewarding local communities financially for protecting forests. As a result of these efforts, deforestation in the region of Acre, has been reduced by 60 % in 2010 compared to a 1996-2005 baseline, while increasing its real GDP by 62%since 2002.

Emerging economies  

  • The 6th BRICS Summit, which was held earlier this year in Brazil, endorsed the creation of the New Development Bank and the Contingent Reserve Arrangement (a common currency reserve fund). These two new institutions are tasked with mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies, particularly Africa, as well as stabilising the volatile currencies of member countries. But what impact will these institutions have? For Laetitia Habchi, Head of the Infrastructure Desk at NEPAD Business Foundation, the future is optimistic. “Let us remain confident,” she says.
  • The Revolving Loan Fund (RLF) in Costa Rica is a new, collaborative mechanism for finance. The RLF provides zero-interest loans to community groups to protect important water source areas. It is operational in rural areas where the state-owned water company has little or no presence and has found that communities are eager to get involved. So far, there is a reported repayment rate of 100%.
  • In order to establish sustainable palm oil as mainstream in global markets, it must gain access into emerging economies, including China and India, according to former RSPO Director Jan Kees Vis. He adds that the biggest challenge for certified palm oil is to formulate a strategy for global market transformation, especially since only 50% of certified palm oil is actually sold as such.

A palm oil plantation in Asia. Source: Wikipedia. 

Trading fairly

  • According to Ndongo Samba Sylla, author of “The Fairtrade Scandal: Marketing poverty to benefit the rich,” Fairtrade certification falls short. The system, for Sylla, presents a twofold bias against the poorest developing countries: First, certification is less costly for large producer organisations than for small ones; and secondly, the cost of compliance with the standards leads to significantly longer working hours for small-scale producers compared to their larger counterparts.
  • In honour of October being Fair Trade month, Triple Pundit features a blog on the benefits of the certification from the US perspective. For example, it argues that the scheme improves lives and ensures high quality food. “Farmers today understand that investing in quality is critical to their long-term survival in the business. Similarly, coffee buyers know that working closely with producers through Fair Trade is a great way to develop the quality of the coffee they serve to the world,” says Jenna Larson, Public Relations Manager for Fair Trade USA.
  • It is already well known that 3D printing offers a cheaper and greener alternative to conventional manufacturing, but it has recently been found to provide other benefits too - poverty alleviation and an end to plastic littering the earth and oceans. This could be done through a new set of standards inspired by Fair Trade products. “We are creating a new class of material called ethical 3D printing filament, like Fair Trade Coffee,” said Joshua Pearce of Michigan Technological University, adding, “It’s a way to help the poorest of the poor up the economic ladder.”
  • Fairtrade International has launched a public consultation for a Standard for Gold and Associated Precious Metals for Artisanal and Small-scale Mining. The aim is to offer solutions to companies looking to source gold from mines that can demonstrate conformance to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas. The consultation period will run until October 17 2014 and  revisions to the Fairtrade standard will be published in December.