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Panama Evs Report Eng.Pdf Published by the United Nations Environment Programme (UNEP), 2014 Copyright © UNEP 2014 Reproduction This publication may be reproduced in whole or in part and in any form for educational or non-profit services without special permission from the copyright holder, provided acknowledgement of the source is made. UNEP would appreciate receiving a copy of any publication that uses this publication as a source. No use of this publication may be made for resale or any other commercial purpose whatsoever without prior permission in writing from the United Nations Environment Programme. Applications for such permission, with a statement of the purpose and extent of the reproduction, should be addressed to the Director, DCPI, UNEP, P.O. Box 30552, Nairobi 00100, Kenya. The use of information from this document for publicity or advertising is not permitted. Disclaimers Mention of a commercial company or product in this document does not imply endorsement by UNEP. Trademark names and symbols are used in an editorial fashion with no intention on infringement on trademark or copyright laws. The designations employed and the presentation of mate- rial in this publication do not imply the expression of any opinion whatso- ever on the part of UNEP concerning the legal status of any country, terri- tory or city or its authorities, or concerning the delimitation of its frontiers and boundaries. We regret any errors or omissions that may have been unwittingly made. Authors: Estelle Midler (BC3), Unai Pascual (BC3) and Silvio Simonit (IUCN) Project Coordinator: Estelle Midler Design and Layout: Printing: Acknowledgement The authors wish to acknowledge the important contributions made by the National Authority for the Environment (ANAM) of Panama, in par- ticular Eric Rodriguez. They further wish to acknowledge the important roles played by UNEP ROLAC staff Gabriel Labbate, Ricardo Montenegro and Emilio Mariscal in data collection and project management. Additional thank goes to Alexis Baules (UN-REDD), Eustorgio Jaen (ANAM), Carlos Gómez (ANAM), Nelys Bosquez (UN-REDD), Irina Madrid (UN- REDD), Ximena San Cristobal (UNEP), Jorge Justavino (ANAM), Iñaki Arto (BC3), Ulf Narloch (The World Bank), Mary Thompson (BC3), Marta Pascual (BC3) and Elena Perez-Miñana (BC3) for their technical and logistical help UNEP promotes throughout the project. environmentally sound practices Finally, the authors thank the reviewers: Rob Tinch (Economics for the globally and in its own activities. This Environment Consultancy, Belgium), Mette Termansen (Aarhus Universi- report is printed on paper from sustainable ty, Denmark), Anil Markandya (Basque Center for Climate Change, Spain), forests. The paper is chlorine free and the inks Eric Mungatana (University of Pretoria) and Ralph Blaney (United Nations Environmental Program World Conservation Monitoring Center). vegetable-based. Our distribution policy aims to reduce UNEP’s carbon footprint. Table of contents Foreword 05 Executive summary 06 o1. Introduction 08 o2. The state of the Panamanian economy 09 o3. The state of the Panamanian forests 10 o4. The contribution of the forestry sector to the Panamanian economy 13 o5. The value of Panamanian forests 18 o6. The potential benefits of REDD+ in transition to a green economy in Panama 31 o7. Conclusions and Policy recommendations 34 References 35 Appendix 37 Foreword As the world works towards defining the This report sheds light on how to develop post-2015 sustainable development agen- public policies that also take into account da and associated Sustainable Develop- the value of the forests and the benefits ment Goals, it is becoming increasingly they provide as driving forces for a Green clear that integrating conservation of the Economy. This approach can lead to tangi- environment into all decision making and ble and sustainable growth, generating a economic planning is essential for long- higher equity by benefiting the most mar- term growth and human wellbeing. Al- ginalized communities in the country. It ready, the natural resources that prop up also provides foundations to stimulate oth- so many economies are under stress, and er important sectors of the economy. climate change will only exacerbate the challenge, particularly in developing coun- This joint effort of the Ecosystem Services tries. Integrating efforts in pursuit of more Economics Unit of the United Nations Envi- sustainable development—demonstrating ronment Programme, BC3 and the ANAM, higher equity, trans¬parency, and respect within the framework of the UN REDD Pan- for cultural values and biodiversity—is a ama joint national pro¬gram, can serve as key task for the global community. catalyst enabling the mobili¬zation of ad- ditional efforts: not just outlining the suc- A significant step towards this sustainable cesses so far, but demonstrating at a coun- future can be taken by integrating the Re- try level how REDD+ can contribute to the ducing Emissions from Deforestation and Green Economy. This report will gener¬ate Forest Degradation in Developing Coun- knowledge and robust tools for a better tries (REDD+) approach with the efforts to understanding of the functioning of valua- prompt a global Green Economy transition. ble natural ecosystems, and thus promote A recent International Resource Panel re- efficient and sustainable management of port, Building Natural Capital: How REDD+ these resources for the benefit of all. Can Support a Green Economy, outlines how an investment of $US30 billion per year in REDD+ can ensure green and sus- tainable growth, as well as mitigate climate change through forest conservation. Ing. Silvano Vergara Many nations are already demonstrat- Minister of the Environment - Panama ing how the sustainable management of forests, achieved through an integrated approach that considers a wide range of ecosystem services, can contrib¬ute to improved conditions and better health in communities dependent on forests—while generating huge benefits to the rest of so- ciety and ensuring the provision of goods and services in the long term. Panama, Achim Steiner working through the National Authority Executive Director - UNEP of the Environment (ANAM) and with the support of the United Nations and other in¬ternational agencies and local organiza- tions, is one such nation. 5 FOREST ECOSYSTEMS IN NATIONAL ECONOMIES AND CONTRIBUTION OF REDD+ IN A GREEN ECONOMY TRANSFORMATION: THE CASE OF PANAMA Executive summary Panama is a country of 3.6 million people which has a sta- ble economy, mostly based on the services sector which comprises around 77% of its gross domestic product (GDP). Economic growth is at an average of 8.8% (between 2005 and 2012) in part due to its geographical position which has allowed the country to develop its service sector around transportation and trade associated with the Canal and the Free Trade Zone in Colón. There are 3,525 million hectares of forest land covering around 47% of Panama, including some of the most biodi- verse terrestrial habitats in the world. This natural wealth has been threatened by deforestation in Panama over the last 50 years. From 1992-2008, the forest area declined by 586,000 hectares (roughly 14%), an area bigger than the Coclé prov- ince. Forest clearing and associated forest degradation has been driven by a variety of factors in different regions, such as growing demand for timber products, land use change to- wards more financially lucrative agricultural cash crops and cattle ranching, and the development of roads and infrastruc- ture. As a result, deforestation rates differ between regions, some being more strongly affected than others. The natural capital of forests contributes to the economy of Panama in several important ways. First, Panamanian forests provide inputs to the economy, including to the ag- ricultural sector, the textile sector, the wood and paper sec- tor, the chemical industry, and the manufacturing and con- struction sectors, among others. These, together with the forest sector, support up to 0.44% of the GDP of Panama. 6 Furthermore, forests also directly and indirectly support this period would have provided net economic returns to other portions of the economy, such as the business sector. Panama. This report estimates that deforestation in Pana- The forest sector is ranked as the most important sector in ma between 1992 and 2012 led to an average net econom- terms of forward linkages. It is estimated that an increase ic loss of about 272 US$ million in the year 2012 only. The in the production of this sector (for instance through an in- total economic losses on this whole period of deforestation crease of one dollar in capital investment) would increase (1992-2012) amounts to 3,700 US$ million. the production generated in the rest of the economic sec- tors in Panama by 3.45 dollars. The total annual value added These estimates call for the attention of the Panamanian generated by the forestry sector in downstream economic society. In order to reduce deforestation rates in Panama, sectors in Panama over the period 2002-2011 reached 80,6 a policy intervention is needed. Such an intervention would million US$, most notably in the financial, trade and trans- require additional investments from both the private and port sectors. the public sectors. In particular, investment by the public sector is necessary to provide forest ecosystem services Panamanian Forests provide significant benefits associated directly (for example, through creation of protected areas) with human well-being both locally and globally, although and to prevent unsustainable forest management (such as some of these impacts are not reflected in standard macroe- controlling illegal logging and compliance with logging per- conomic indicators such as GDP. This is because a substantial mits). Removing existing incentives for deforestation, such share of the value of forests is not reflected in markets. These as indirect subventions to cattle breeding, is also seen as an values are known as ecosystem services and include impor- essential policy intervention to curb forest land conversion. tant benefits to society such as water regulation and carbon storage, referred to as regulating ecosystem services.
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