Developing sound, long-term forest policies for the region in the face of so many conflicting economic, social, and political interests is, at best, a difficult task. The following three priority recommendations, however, could help Venezuela to achieve a better balance between conservation and economic development.
1. Capture fully revenue from forest resources and ensure that benefits contribute to long-term forest conservation.
Options for policy makers. Currently, benefits from forest resources are not fully captured at either the national or local levels. Priority recommendations for policy-makers are:
- Remove subsidies on timber extraction and use this money to re-invest in conservation and monitoring activities. Subsidies now offered to logging concessionaires are not justified, in light of the environmental impact of their activities.
- Seek means of capturing more revenue from national parks, such as increasing entrance fees, setting fees for side services, and ensuring that fees paid on water services reflect the cost of managing the watershed. While raising park fees is generally unpopular, a combination of gradually increased entrance and ecosystem service fees could generate more revenue to pay for park management (See Capturing Benefits from Venezuela’s National Parks). Ensuring that water prices reflect the cost of managing watersheds could help generate funds for conservation of the Guayana region, especially as much of the region’s urban water and the nation’s hydroelectric power are protected by forests in Bolivar and Amazonas states. In addition, tax revenues can be re-directed to fund conservation in areas where the protection of resources is beneficial for maintaining specific ecosystem services. For example, the Brazilian state of Paraná redirects 5 percent of its sales tax to fund watershed conservation activities in communities located in upstream catchments. In 1996, $19 million was raised in this manner and re-directed to 150 municipalities. [223]
- Establish an open auction system for mining and logging concessions, in which the concession is granted to the highest bidder. Additional considerations could include favoring companies that show plans to use technologies which reduce environmental impacts, or that provide data for monitoring their performance.
Public auctions could generate multiple bidders for mining and logging concessions and could help provide the highest price for the resource in question. A base fee for the resource would be established to avoid collusion among bidders. A similar process was recently instituted in Cameroon with support from the IMF and World Bank, where French and Asian companies have concluded a bidding process on the country’s valuable timber concessions. [224]
- Examine opportunities for formulating a carbon sequestration package under the Clean Development Mechanism of the Kyoto Protocol, which could include reduced-impact logging techniques or other forest conservation measures.
Under this type of arrangement, an emitter in a developed country can agree to fund forestry and land-use projects in developing countries that contribute to reductions in global greenhouse gases. While such projects have been voluntarily implemented by specific companies in developed countries, they may now take on a larger role through the Kyoto Protocol, which was designed to slow global warming. [225]
Options for lenders and development agencies. Lenders, such as the IMF and World Bank, can help orient the government’s efforts in evaluating methods of capturing lost revenue, before the government begins to expand extractive activity. Lenders and development agencies could:
- Consult with the Venezuelan government on methods of capturing lost rent on tourism and existing mining activities before advocating the expansion of mining and logging activity.
- Help the Venezuelan government to establish and implement an open auction system for awarding logging and mining concessions.
- Support innovative compensation and tax-based systems for financing conservation.
2. Minimize the environmental and social impact of mining and logging.
Options for policy makers Before escalating mining and logging activity, the government should first attempt to control the activities already underway. Options policy-makers should consider are:
- Enact a moratorium on future mining and logging contracts until there are a) a clear policy on environmentally responsible mining, b) reclamation standards for both small and large-scale mining, and c) comprehensive review of forestry policies. New standards for logging practices could take into consideration international standards, such as those developed by the Forest Stewardship Council, the United Nation’s Food and Agriculture Organization, and the United States Forest Service. With the participation of local researchers and universities, the Venezuelan Forest Service could undertake a systematic analysis of the impact of logging in forest reserves. The goal of such an exercise would be to develop a forest management system specifically for the Guayana region, which would then be re-evaluated on a regular basis for continual monitoring of environmental and social impacts.
- Remove perverse incentives for forest conversion, especially in the agricultural sector. Agrarian reform policies should be re-evaluated and revised to eliminate perverse incentives that stimulate forest conversion to farmland and encroachment in public forest lands.
- Coordinate the collection of necessary baseline data before expanding mining and logging activities and make this information available through a national information bank. To maintain the greatest degree of objectivity, these data would be collected independently, preferably through local universities and other research institutions. The national information bank would be public and would contain government policy documents, scientific studies, and post-graduate dissertations relating to extractive activities in the region.
- Establish an “early warning” continuous monitoring and information system to track environmental and social impacts from extractive activities. Such a system would be open and readily accessible to those outside government and would consist of technically sound, objective information gathered on a continual basis, to allow officials to adapt policies based on realities observed in the field. [226]
References and notes
223 For examples of innovative financing mechanisms for biodiversity, see I.A. Bowles et al., Encouraging Private Sector Support for Biodiversity Conservation (Conservation International: Washington, DC, 1996); D. Clark and D. Downes, What Price Biodiversity?: Economic Incentives and Biodiversity Conservation in the United States (CIEL: Washington, DC, 1995); J.A. McNeely and W.P. Weatherby, “Innovative Funding to Support Biodiversity Conservation” International Journal of Social Economics (vol. 23: 4,5,6, 1996)
224 E. O’Hallaran and V. Ferrer, “The Evolution of Cameroon’s New Forestry Legal, Regulatory and Taxation System,” draft paper (World Bank: Washington, DC, January 1997).
225 United Nations, “Kyoto Protocol to the United Nations Framework Convention on Climate Change,” Article 12.
226. For guidelines on establishing a monitoring system, see A.B. Rosenfeld et al., Reinventing the Well: Approaches to Minimizing the Environmental and Social Impact of Oil Development in the Tropics (Washington, DC: Conservation International, 1997).
