Emeritus Professor Nimal Gunatilleke,  University of Peradeniya Courtesy The Island

Natural forests provide a variety of services that include forest products of utility value, water regulation, biodiversity and soil conservation, climate amelioration and a range of socio-cultural benefits to forest-dependent people. In good governance of natural resources such as that of forests, transparency and inclusiveness in ecosystem management planning, monitoring, and equitable sharing of benefits are safeguarded. Increased pressure on natural forest resources leads to land degradation, biodiversity decline and contribute to change in climate. Major drivers of tropical deforestation are economic, governance, technological, cultural, and demographic factors, all of which are interconnected and interactive. Among the governance factors which contribute to forest degradation and deforestation are i) policies encouraging forest conversion, ii) unclear land tenure, and iii) poor enforcement of environmental laws.

All these factors seem to be influencing the current wave of forest degradation and deforestation in Sri Lanka. A forest governance conundrum has emerged recently as a result of seemingly discordant interests in forest conservation vis -à- vie land development planning and implementation in Sri Lanka. This has become even more pertinent in this post-Covid era during which the concept of One Health is being actively promoted. One Health initiative is a collaborative, multisectoral, and transdisciplinary approach linking human, animal and ecosystem health which has a deep-rooted cultural significance in Sri Lanka.

Sri Lanka is a party to the three global environmental conventions related to sustainable development (viz. the Convention on Biological Diversity [UNCBD], UN Framework Convention on Climate Change [UNFCCC], and the UN Convention to Combat Desertification [UNCCD]). All of them have mobilised a strong political commitment as a potential accelerator of ecosystem restoration effort around the world in this United Nations’ Decade on Ecosystem Restoration (2021-2030) which is being advanced as a unified global strategy towards conserving threatened biological diversity, mitigating climate change, and curbing desertification. This has been further strengthened by the commitments made at the recently concluded UNFCCC -COP 26. Over 130 countries, with a coverage within them of more than 90% of the world’s forests, endorsed the Glasgow Leaders’ Declaration on Forests and Land Use committing to work collectively to halt and reverse forest loss and land degradation by 2030. It is said to be backed by the biggest ever commitment of public funds for forest conservation and a global roadmap to make 75% of forest commodity supply chains sustainable.

Sri Lanka has made a conditional pledge to restore 200,000 ha over this decade as its Nationally Determined Contribution to Bonn Challenge commitment, contingent upon the availability of adequate funding. Complementing this international commitment, the Government of Sri Lanka has incorporated in its National Policy Framework – ‘Vistas of Prosperity and Splendor’, a strategy for an increase of national forest cover up to 30% (p.59). Among the proposed activities under this strategy are i) identification and reforestation of suitable lands, ii) restoration and rehabilitation degraded ecosystems and iii) activities related to urban and road-side tree planting. Similarly, in the sub-sector on land utilization in the same document (p. 57), strategies towards i) conservation of sensitive ecosystems to control human impacts on marshy lands and mangroves and ii) restoring barren and abandoned lands for sustainable agriculture and forestry have been proposed.

Despite these national policy proclamations on sustainable environmental governance while, at the same time, complying with international environment-related commitments, recent declarations (in the form of circulars) relating to ‘other state forest lands’ issued by the subject ministries appear to be undermining the laudable objectives in achieving the environmental pledges made by the government. These ‘other state forests’ reclassified in recent governmental circulars as ‘residual forests’ are those located outside the currently declared protected area network. It is estimated to cover about 400,000 ha or more that include fragments of both mature phase forests as well as regenerating forests serving as crucially important biological corridors connecting protected areas mostly in intermediate and dry zone districts.

The closed canopy forests amongst these other state forests are included within the current natural forest cover estimate of 29.2%. The government has pledged to increase this to 30% by 2025 and to 32% by 2030 by restoring degraded forests and deforested lands, mostly found within these ‘residual’ forests. Accordingly, there is a clear government commitment towards expanding the current natural forest cover by 200,000 ha, in honouring these national and international pledges.

However, a disturbing factor that has emerged in recent times is a steep increase of forest offences most of which are encroachments and unlawful extraction of forest products and services. The Forest Department has prosecuted these forest offenders that has steadily increased with over 27,000 court cases since 2006 (especially since 2019), according to the Forest Department records.

On top of this, there appears to be a move to release at least some of these other state forestlands reclassified in recent government circulars as ‘residual forests’ for agricultural expansion (commercial scale?), infrastructure development and human settlements. with a sense of urgency, especially after the Covid-19 pandemic. Government’s thrust towards rapid development in land-use for agriculture, animal husbandry and plantations has put severe pressure on these ‘other state forests’, most of which are located in the Northern, North-eastern and North-central provinces in which only a limited amount of long-term land use planning has gone in since the end of the protracted war in these areas. Therefore, some of the critical areas for conservation in these areas have not yet been included into the national protected areas system.

In such a climate, a series of circulars have been issued since the issuance of the circular MWFC/1/2020 on 04 November 2020 by the Ministry of Wildlife and Forest Conservation rescinding all previous circulars related to administration of these Other State Forests (OSFs) or residual forests to be utilised for development activities. By this new circular, all OSFs, except those that are identified as important for conservation of biodiversity, soil, and water, to be handed over to the provincial and district administration for land development programmes, subject to conditions laid out for proper land use. The subsequent circulars and advisory notes issued by the Land Commissioner General and Forest Conservator General spelt out procedural details in speeding up the implementation process of the MWFC/1/2020 decisions.

This attempt appears to be at variance with the priorities of the National Policy Framework which proposes restoration of barren and abandoned lands to increase national forest cover to 30% by 2025. However, clearing of natural forests or regenerating forests for development-mostly agricultural – without identifying and prioritizing the ecological service value, these attempts may be counter-productive with time creating a forest governance conundrum.

While the Forest Department has identified 389,562 ha of ‘open and sparse forests’ under its jurisdiction in its 2015 Forest Cover estimates, the Land Use Policy Planning Department (LUPPD) has identified a further 373,387 ha of ‘shrub cover’ mostly in the category of other state forests, a total area of open and sparse forest/shrub cover of over 750,000 ha. While a certain level of overlap of these other state forest and shrub cover may be inevitable and hence to be expected, a speedy mechanism needs to be developed to identify these open and sparse forests as well as the shrub cover of LUPPD on the ground.

From amongst them, those which are important for biodiversity conservation, provisioning of ecosystem services, buffer areas for protected forests, riverine/gallery forests and stream reservations, corridors for animal migration and those that are in advance regeneration need to be set aside for increase in forest cover to 30% by 2025 as stated in the National Policy Document – Vistas of Prosperity and Splendor. From a sustainable land development perspective, the remaining degraded lands should be considered for development purposes.

The global priority when it comes to tradeoffs between conservation and development is to conserve relatively intact tropical forests. It has been categorically stated that forest restoration can no way be a substitute for habitat/landscape conservation. Pledges of restoration should not be used to justify forest conversion to other land uses in critical habitats as proposed in the case of construction of Madugeta reservoir near Deniyaya. This reservoir was designed for taking water from Gin Ganga to SE dry zone by submerging a portion of prime rain forest of Dellawa. In this instance, a claim was made to reforest over 100 acres of Hevea rubber as a substitute which was not endorsed by the UNESCO World Heritage Commission. Dellawa forest is in the buffer zone of Sinharaja World Heritage Site and International Biosphere Reserve.

It is clearly evident that Sri Lanka faces a formidable challenge in environmental governance in trading off her critical environmental interests with those of rapid development. This has been further confounded by the lack of employing a proper yard stick in estimating benefits and costs of each competing interest. One of the main impediments in moving along the path of good forest governance in Sri Lanka is our incapacity to estimate a more realistic value of its natural capital including the services the forests provide which can be traded against any proposed developmental alternatives. Valuing natural capital enables governments to account for nature’s role in the economy and human well-being. Estimating the economic value of nature’s benefits, as best as we can using currently available methods, can make the contribution of nature to livelihoods and economies more visible, enabling smarter decisions that account for nature in our economic systems (green economy) and ensuring that it can continue to sustain us.

In this green economic milieu, the green bonds or climate bonds are emerging as innovative financial instruments as the environmental issues are raising high on global investment policy agenda. Green bonds are like conventional bonds, but their only unique characteristic specification is that the proceeds be invested in projects that generate environmental benefits. A green bond could be used to finance or refinance projects that contribute positively to the environment and/or climate. Green bonds can mobilize resources from domestic and international capital markets for climate change adaptation, renewables, and other environment friendly projects.

Green bonds enable governments, corporations and the private sector to borrow capital to fund projects that promote environmental sustainability and a low carbon economy. They are commonly used to finance the following types of projects:

* Natural resources and land management projects,

* Energy efficiency projects,

* Renewable energy projects,

* Pollution prevention and control projects,

* Clean transportation projects,

* Wastewater and water management projects,

* Green building projects.

* Water projects

Some examples of green-bond qualified investment projects in different countries are nature-based solutions such as development of biological corridors, ecotourism projects, certified organic agriculture projects payment for watershed service improvements, and purchase of lands for conservation and restoration purposes and conservation easement projects.

Green bonds are emerging rapidly as key green economic financial instruments at a global scale with over half a trillion dollar investments have already been made during the first half of 2021and ‘1 trillion dollar annual sovereign green bond investment is in sight’ according to the Global Climate Bond monitoring website (https://www.climatebonds.net/).

There are a number of similar attractive opportunities in Sri Lanka to be explored for being eligible for green bond investments. They can even be used for refinancing international debt capital – as debt instruments which is quite appropriate for Sri Lanka at this post-covid state with a heavy burden of international debt. Central and provincial government agencies, municipalities, as well as private organisations, could consider issuing Green Bonds that are focused on biodiversity and sustainable land use, especially in regions that are known for their natural capital and ecosystems (e.g. wetlands in the Weststern Province, watersheds in the Central and Uva province).

The world-renown Sri Lankan agrarian system, the ellanga gammana” or Cascaded Tank-Village system in the Dry Zone, which was designated as a Globally Important Agricultural Heritage System (GIAHS) by the Food and Agriculture Organisation of the United Nations (FAO) may be an ideal candidate for sustainable development. Further expansion of the Wari Saubhagya programme into the LUPPD identified ‘Shrub cover’ and the remainder of the other state forests having carved out the conservation areas first, could be considered in this context for green bond investment projects with community participation.

In the face of this current conundrum, estimation of the value of forest biodiversity and the ecosystem services they render, would pave the way for investing in green bonds that takes into account the natural capital in our economic systems. Since there are strict monitoring protocols in place for these green investments, the governance factors which contribute to forest degradation and deforestation such as policies encouraging forest conversion, unclear land tenure, and poor enforcement of environmental laws would be minimised.