Building on Forest Governance Reforms through FLEGT: The Best Way of Controlling Forests’ Contribution to Climate Change? Kate Dooley and Saskia Ozinga Illegal logging is a major problem in the forestry sector, and legislation to combat it has recently been introduced in both the United States and the European Union (EU) – two of the world’s largest importers of timber. Non-governmental organizations (NGOs) and the timber industry have urged governments to use trade incentives to control illegalities, and this has been instrumental in the development of these laws. The Lacey Act, an American conservation law revised in 2008 to include illegal timber, requires businesses to demonstrate that their purchasing policies and mechanisms effectively avoid sourcing timber from illegal sources. Because tackling the problem depends on cooperation between importing and exporting countries, the EU has been working since 2002 on a comprehensive plan to control illegal timber imports: the EU Action Plan for Forest Law Enforcement, Gov- ernance and Trade (FLEGT). This Action Plan has led to new legislation to control illegal timber imports and help timber-producing countries to improve forest governance. It is hoped that in this way FLEGT will also contribute to keeping forests standing, thereby mitigating climate change. However, it is feared that World Bank and United Nations initiatives on Reduced Emissions from Deforestation and Forest Degradation (REDD) may undermine the FLEGT initiative if they do not recognize the need to begin with forest gover- nance reforms. INTRODUCTION Illegal logging is a major problem worldwide, causing enormous damage to forests, forest peoples and the economies of producer countries. There are no exact figures, but a large percentage of tropical-timber imports into the European Union (EU) are believed to be illegally sourced. The World Bank estimates that the illegal timber trade may comprise over a tenth of a total global timber trade worth more than US$150 billion a year. 1 Concern about the extent of illegal logging around the world has grown significantly in past years, leading to new legislation in the EU and the United States. This concern has arisen from a variety of factors: growing evidence of the link between forest destruction and the loss of government revenues, the increasing emphasis on ‘good governance’ in international policy, and growing recognition of the role that consumer countries play in fuelling demand for illegal products. This has led to the development of the EU’s Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT). There is also greater awareness of the link between what happens to the world’s forests and the issue of climate change. Forests can play an important part in mitigating climate change, but forest loss contributes to 12–17% of annual global carbon dioxide emissions. 2 This has led to the initiative on Reducing Emissions from Deforestation and Forest Degradation (REDD), spearheaded by the World Bank, among others. The basic concept behind REDD is simple: governments, companies or forest owners in tropical forest countries should be rewarded for keeping their forests instead of cutting them down. For the EU FLEGT and REDD initiatives to be success- ful, two key issues need to be addressed: clarification of who holds the rights to forest land; and improving forest governance. This is well recognized in the FLEGT process. However, recognition of the importance of these issues is advancing only slowly in connection with REDD. There is an urgent need for REDD to build on the FLEGT model for addressing forest governance if both of these initiatives are to have a positive impact on solving the forest crisis. THE PROBLEM OF ILLEGAL LOGGING: ON WHAT SCALE? Although exact figures are impossible to obtain, given the illegal nature of the activity, reliable estimates 1 Organization for Economic Cooperation and Development (OECD), OECD Environmental Outlook (OECD, 2001), at 122. 2 G.R. Van der Werf et al., ‘CO2 Emissions from Forest Loss’, 2 Nature Geoscience (2009), 737. Review of European Community & International Environmental Law RECIEL 20 (2) 2011. ISSN 0962 8797 © 2011 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. 163