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Native Forests Public Disclosure Authorized CHILE’S FORESTS Public Disclosure Authorized A pillar for inclusive and sustainable development Public Disclosure Authorized Public Disclosure Authorized CHILE’S FORESTS A pillar for inclusive and sustainable development Acknowledgements This document was prepared by a team led by Stavros Papageor- giou (World Bank) and Carolina Massai (Conaf), in collaboration with an editorial committee formed by José Antonio Prado, Jaeel Moraga, Constanza Troppa, Mariela Espejo, Sergio Aguirre, Wil- fredo Alfaro, Luis Carrasco, and José Manuel Rebolledo. Eduardo Morales Verdugo (technical editor), Humberto Merino Peralta (news editor), and Marisa Polenta (art director) were in charge of the content and editorial production. The team wishes to thank Eduardo Vial Ruiz-Tagle, Patricio Rosas Barriga, Jerónimo Berg Costa, Guillermo Canales Domich, and Charo Gutiérrez for their collaboration. Rights and permits This work is a product of the staff of the World Bank developed in collaboration with staff of the National Forestry Corporation (CONAF) of the Ministry of Agriculture of Chile. The findings, interpretations and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Executive Board, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The borders, colors, denominations and any other information shown on any map in this work do not imply any judgment by the World Bank regarding the legal status of any territory or the endorsement or acceptance of such borders. The material in this work is subject to copyright. Because the World Bank encourages the dissemination of its knowledge, this work can be reproduced, in whole or in part, for non-commercial purposes, provided that full attribution to this work is granted. For all other uses, send an email to: [email protected] © 2020 International Bank for Reconstruction and Development / World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Website: www.worldbank.org Photo credits The owners of the photographs included in this publication have granted all the corresponding usage rights and authorizations. We appreciate the collaboration of the following entities who provided images: CONAF, INIA, INDAP, MINAGRI, CMPC, Fundación Imagen de Chile, and Agencia Vientosur. 4 TABLE OF CONTENTS Chapter 1 COUNTRY CONTEXT / Page 10 1.1 NATURAL AND HUMAN ORIGINS / Page 12 1.2 DEGRADATION OF SOIL AND FOREST RESOURCES / Page 19 1.3 EARLY ENVIRONMENTAL AWARENESS / Page 20 1.4 PROPERTY RIGHTS / Page 22 Chapter 2 THE CONSOLIDATION OF CHILE’S FOREST SECTOR / Page 28 2.1 STATE OF CHILE’S FOREST RESOURCES AND THEIR CONTRIBUTION TO SUSTAINABLE DEVELOPMENT / Page 30 2.2 THE KEYS TO THE SUCCESS OF THE CHILEAN FOREST MODEL / Page 56 Chapter 3 TOWARDS AN INCLUSIVE AND SUSTAINABLE MODEL / Page 72 3.1 THE NEW GENERATION OF FOREST PLANTATIONS / Page 74 3.2 VALUING NATIVE FOREST RESOURCES / Page 78 3.3 CLIMATE CHANGE, DESERTIFICATION, LAND DEGRADATION AND DROUGHT / Page 88 3.4 SOCIAL ACCEPTABILITY / Page 98 3.5 NEW INSTITUTIONAL FRAMEWORK / Page 101 3.6 TOWARDS AN INCLUSIVE AND SUSTAINABLE MODEL / Page 104 5 ACRONYMS AGCID: Chilean Agency for International DLDD: Desertification, Land Degradation Development Cooperation and Drought AIFBN: Association of Forest Engineers for ENCCRV: Chilean Strategy for Climate the Native Forest Change and Vegetation Resources APF: Preferably Suitable for Forestry EPG: Assessment of Government Programs ASP: Wildlife Protected Areas ERPA: Emissions Reduction Purchase BRIDEF: Metropolitan Anti-Corruption Agreement Investigation Brigade FAO: Food and Agriculture Organization of CBD: Convention on Biological Biodiversity the United Nations CERTFOR: Chilean Sustainable Forest FCBN: Conservation, Recovery and Management Certification System Sustainable Management of the Native Forest Fund CIREN: Natural Resources Information Center FCPF: Forest Carbon Partnership Facility CLP: Chilean Peso FIBN: Native Forest Research Fund CMPC: Paper and Cardboard Manufacturing FOB: Free On Board Company FPM: Fine Particulate Matter (PM 2.5) CMSBN: Conservation and Sustainable FRA: Forest Resources Assessment Management of Native Forests FSC: Forest Stewardship Council CNE: Chilean Energy Commission ECLAC: FTA: Free Trade Agreement Economic Commission for Latin America GCF: Green Climate Fund and the Caribbean GEDEFF: Department of Forest CO : Carbon dioxide 2 Development and Promotion CO : Carbon dioxide equivalent 2eq GEF: Global Environment Facility CONAF: National Forestry Corporation GHG: Greenhouse Gases CONAMA: Chilean Environmental GTZ: German Cooperation Agency Commission GWh: Gigawatt hours COP: Conference of the Parties ha: Hectares COREF: Reforestation Corporation HDF: High Density Fiberboard CORFO: Chilean Economic Development Agency INDAP: Agricultural Development Institute CORMA: Chilean Timber Industry INE: National Statistics Institute Association INFOR: Forestry Institute DGA: General Directorate of Water INGEI: Chilean Greenhouse Gas Inventory DIPRES: Chilean Budget Office INIA: Agricultural Research Institute DL 701: Decree Law No. 701 on Forest IPCC: Intergovernmental Panel on Climate Development Change 6 IUCN: International Union for Conservation PES: Payment for Environmental Services of Nature REDD+: Reducing Emissions from IUFRO: International Union of Forest Deforestation and Forest Degradation Research Organizations SAG: Agricultural and Livestock Service LBN: Native Forest Law SBAP: Biodiversity and Protected Areas LDN: Land Degradation Neutrality Service LULUCF: Land use, land-use change and SDG: Sustainable Development Goals forestry SERNAFOR: National Forest Service 3 M sub: Solid cubic meter under bark SFO: Small Forest Owner masl: meters above sea level SIMEF: Integrated System of Monitoring MAIA: Andean Intercultural Environmental and Evaluation of Forest Ecosystems Model SIT: Territorial Information System MDF: Medium Density Fiberboard SNASPE: National System of State MDP: Medium Density Particleboard Protected Areas MINAGRI: Ministry of Agriculture UACH: Austral University of Chile MMA: Ministry of the Environment UCCSA: Climate Change and Environmental MOFIN: Mapuche Intercultural Forestry Services Unit Model UF: Development Unit (Unit of account used MW: Mega Watt in Chile and set according to inflation) NCRE: Non-Conventional Renewable UN: United Nations Energy UNCCD: United Nations Convention to NDC: Nationally Determined Contribution Combat Desertification NTFP: Non-timber forest products UNDP: United Nations Development Program OECD: Organization for Economic Cooperation and Development UNESCO: United Nations Educational, Scientific and Cultural Organization OSB: Oriented Strand Board UNFCCC: United Nations Framework PANCC: Chilean Climate Change Action Convention on Climate Change Plan USD: United States Dollar PANCD: Chilean Action Program Against Desertification UTEM: Metropolitan Technological University PCI: Private Conservation Initiatives VAT: Value Added Tax PEFC: Program for the Endorsement of Forest Certification PGRVTI: Management Plan for Vegetation Resources in Indigenous Lands 7 EXECUTIVE SUMMARY Thanks to a long-term reforestation policy that has allowed the country to re- cover its forests and develop a strong forestry industry in less than four decades, Chile is currently positioned as a leading global player in the forestry sector. From an environ- ment perspective, it is one of the few countries in the world that has managed to reverse deforestation and increase its forest area, ranking third in the list of countries with the largest increase in forest area worldwide between 2010-2015; and among the twelve countries worldwide that increased their forest cover by more than 10% in the last 25 years, in contrast with the global trend of forest cover loss. Today, forests cover 17.9 million hectares of land throughout the country, of which approximately 82% consist of native forests (14.6 million hectares), 17% of planted forests (3.1 million hectares), and 1% of mixed forests (179,125 hectares). In the case of planted forests, the majority (almost 95% of the total area) is used to grow pine and eucalyptus species. The economic success of the Chilean forest industry is also remarkable. While prior to the 1970s the sector had a secondary role in the national economy, today, the forest industry constitutes one of the pillars of the Chilean economy, representing 2.1% of national Gross Domestic Product (GDP). The forest sector is particularly relevant in the south-central parts of the country, where its contribution to the GDP of some re- gions, such as Biobío and Los Ríos, exceeds 15%. The forest industry is also an important source of employment. In 2018, employment in the forestry sector reached 113,769 jobs, which accounts for approximately 1.5% of the national employment rate. The Biobío region features the highest rate of forestry jobs (37.8%) in Chile. This remarkable economic growth has been driven by a significant increase in forestry exports over time, reaching in 2018 a historical record of more than USD 6.8 billion, representing 9.1% of Chilean total exports and placing the forestry sector as the third biggest exporting industry after mining, and fishing & aquaculture. This increase in commercial activity has allowed Chile to position itself among the top 20 major export- ers of forest products in the world, and to become a leading producer of pulp, plywood panels, woodchips and timber. The national
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