EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 17.10.2008 
SEC(2008) 2618 
COMMISSION STAFF WORKING DOCUMENT 
ANNEX TO THE  
 
COMMUNICATION FROM THE CO MMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMI TTEE OF THE REGIONS 
 
Addressing the challenges of deforestatio n and forest degradation to tackle climate 
change and biodiversity loss 
{COM(2008) 645 final} 
{SEC(2008) 2619} {SEC(2008) 2620} 
 
EN 2   EN ANNEX 1 
References 
1. COM(2008) 400/2, Communication from th e Commission, to the European 
Parliament, the Council, the European Economic and Social Committee and the 
Committee of the Regions. 
    Public procurement for a better environment     2. COM(2008)19. Proposal for a Directive of the European Parliament and of the 
Council on the  
promotion of the use of energy from renewable sources. 3. COM(2008)16. Proposal for a Directive of the European Parliament and of the 
Council amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance tradi ng system of the Community 
4. Commission Staff Worki ng Paper, SEC(2008) 434, accompanying COM (2008) 177 
final,  
The EU - a global partner for developm ent. Speeding up progress towards the  
Millennium Development Goals.  5. COPI, 2008 The Cost of Policy Inaction:  The case of not meeting the 2010 
biodiversity target, study for the Europ ean Commission, DG Environment. May 2008 
6. FAO, 2007. State of the World’s Forest 2007. 
(http://www.fao.org/docre p/009/a0773e/a0773e00.htm). 
7. IPCC, 2007: Climate Change 2007: Mitigat ion. Contribution of Working Group III 
to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [B. Metz, O.R. Davidson, P.R. Bosch, R.  Dave, L.A. Meyer (eds)], Cambridge 
University Press. 
 8. MEA, 2005 Millennium Ecosystem Assessment report - Volume 1: Current State & 
Trends - Chapter 28 Synthesis. (http://www.maweb.org/en/index.aspx) 
 
EN 3   EN 9. Nabuurs, G.J. et al., 2007: Forestry. In Climate Change 2007 (ref. IPCC, 2007) 
10. Rudel T. K., O. T. Coomes, E. Moran, F. Ac hard, A. Angelsen, J. Xu and E. Lambin, 
2005,  
Forest transitions: towards a global understand ing of land use change, Global Environmental  
Change 15: 23–31  11. Sukhdev, P et al. 2008. The Economics of Ecos ystems and Biodiversity-An interim 
Report.  
(http://ec.europa.eu/envir onment/nature/biodiversity/ec onomics/pdf/teeb_report.pdf) 
12. Turner, J., Katz, A.and Buongiorno, J., 2007. Implications for the New Zealand 
Wood Products Sector of Trad e Distortions due to Illega l Logging. A report prepared 
for the Ministry of Agriculture and Forestry. 
 
EN 4   EN ANNEX 2  
Causes of deforestation 
Broader governance problems  
Underlying causes of deforestati on are the lack of effective governance structures and law 
enforcement, and the absence of  effective policies to help the poor. Conflicting and unclear 
land-use policies, land-tenure rights  and property and usufruct right s give rise to unsustainable 
or illegal logging, thereby contributing to defo restation. In addition, ec onomic benefits from 
forest conversion are often une venly shared, with policies and land-use strategies often 
reducing access to the rural communities that depend on forests. 
Increased pressure on the global cultivated area  
Land is a limited resource. Crop and livestock  production, mining and urban development all 
require land. The growth in the world's population and increased meat and dairy consumption in developing countries are cr eating greater demand for agricultu ral commodities. At the same 
time, weather events linked to climate change, political instability in certain regions, higher 
energy prices, the emergence of new markets fo r biofuels and under-inves tment in agricultural 
research and production have also contributed to rising food prices. In addition, higher energy 
costs have contributed to the expa nsion of mining activities in fore sts. This situation translates 
into higher demand for productive land, wh ich puts more pressure on forests.  
Biofuels are new sources of demand for ag ricultural production. The European Commission 
has proposed sustainability criteria to avoid th e potential negative impa ct on deforestation. It 
is also promoting second generation biofuels, which should produce more energy per unit 
area. The impact of the overall levels of pr oduction of and demand for biofuels on land use, 
including forest cover, will be monitored closely.  
Harvesting of forest products
 
Commercial or subsistence ex ploitation of forests does not  compromise the long-term 
existence of forests provided it is sustainable and legal. However, if there is no effective 
regulation, it is often more profitable in the s hort term to harvest trees  without practising any 
form of forest management. In certain parts of the world, particularly Africa, forests are lost 
because fuel wood is harvested at unsustainable levels.  
Lack of valuation of forest ecosyst em services and market failures  
The products and services provide d by forests include medicinal plants for local use, water 
regulation, slope stabilisation, and climate mitiga tion and adaptation functions. Major benefits 
of forest conservation and sust ainable forest management are externalities. Forest owners 
rarely receive payment for conserving and providi ng forest services, so forests tend to be less 
attractive economically than other types of land use.  
 
EN 5   EN ANNEX 3  
Sources of funding in addition to re venue from auctioning of allowances 
The Global Climate Change Alliance  
The Global Climate Change Alliance, launched by  the Commission in 2007, is intended to be 
a platform for enhanced dialogue and increa sed cooperation between the EU and the poor 
developing countries most vulnerable to climat e change, in particular the Least Developed 
Countries and Small Island Developing States . It is aimed primarily at supporting and 
integrating climate adaptation into poverty reduction strategi es. The sum of €50 million has 
been earmarked by the Commission for the period 2008-2010. The reduction of emissions 
from deforestation is one of its priorities. 
Pooling efforts at EU level on Official  Development Aid allocated to forestry  
EU forest aid continues to be insufficiently coordinated. With about €40 million/year of ODA 
devoted to forestry, the efforts made by th e Commission and many Member States can only 
make a difference if there is close coordination between the EU donors and other donors. The 
current fragmented approach is an impediment  to effectiveness. Efforts should also better 
reflect the particular forest  challenges in the countri es concerned. Enhanced donor 
coordination would leverage additional assist ance from other actors, including the private 
sector. 
EU contributions to bilateral and multilateral initiatives  
The EU should remain at the forefront of th e development of innovative funding mechanisms. 
Importantly the EU (European Commission and Me mber States) is the major contributor to 
the World Bank's Forest Carbon Partnership Facility1, with more than 80% of the total. The 
Facility is an advanced multilateral initiative to  address deforestation in the context of climate 
change. It tests designs for performance-based systems to reduce defore station in developing 
countries and ways to generate funding for the protection of tropical forests. 
                                                 
1 Launched in June 2008, the US$ 300 million Forest Carbon Partnership Facility will support pilot 
projects using a system of policy approaches and performance-based payments. It consists of a 
Readiness Fund, mainly for capacity building, and a Carbon Fund, for trading of emission reductions