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On 17th and 18th April Uganda launched a prototype national Forest Account system at events targeting decision makers and technicians within key Government ministries.

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The Forest Account system, developed with UN-REDD National Programme support, is designed to benefit the Ministry of Water and Environment (MWE), Ministry of Agriculture Animal Industries and Fisheries (MAAIF), Ministry of Tourism, Wildlife and Antiquities (MTWA), Ministry of Finance, Planning and Economic Development (MFPED); and other ministries, private and civil society. The system builds on a study undertaken by the Government in collaboration with UN Environment Programme and UN Development Programme, on economic valuation of Uganda's forests and their contribution to the national economy, including through ecosystem services. The study shows that total annual losses in forest ecosystem services for the whole country due to deforestation alone was estimated at 812,755 million UGS in 2015. This indicates that the current level of logging and land-use change results in a net loss to the economy of Uganda when taking into consideration other values of the forest. The Forest Account describes the value of the vital ecosystems services to the country and Uganda is the 8th out of the 54 African countries to develop such an economic and political tool.

Director of Environmental Affairs, Mr. Paul Mafabi, noted at the launch that the Ministry of Water and Environment has initiated a review of the Forestry Policy and the Tree Planning and Forestry Act, which represents an opportunity to integrate some of the recommended policy instruments.

From 1990 to 2015, Uganda experienced a severe rate of deforestation with a decrease in forest cover from 4.9 million ha to less than 2.0 million ha. This corresponds to an annual average forest cover loss of 120,000 ha (estimates by Uganda’s National Forest Authority (NFA)).

The drivers of this deforestation include the harvesting of fuelwood and construction timber, and land conversion for agriculture due to economic incentives. However, what might be immediate financial gains come at a cost over the medium and long-term both for the economy and for human well-being. Uganda’s forest and natural ecosystems are important production factors to various economic sectors. Long-term effects from deforestation and forest degradation include risks such as reduction in ecosystem resilience and ultimately the loss of natural capital to future generations.

Currently, the short-term immediate incentives for deforestation outweigh the long-term value of ecosystem services. This is because the loss of ecosystem services are borne elsewhere in the economy and because ecosystems service values are not internalized in Uganda’s economy. The country therefore needs to develop policy instruments that appropriately reflects the full value, beyond logging, of forests to the economy.

Some of the essential key messages from the study are:

  • The contribution of forests to Uganda’s economy is underestimated in the national accounts;
  • The key forest ecosystem services at risk include sustainable harvests of timber and non-timber forest products, genetic resources, eco-tourism, water regulation, water purification and waste assimilation, sediment regulation and climate regulation; 
  • Changes in these ecosystem services affect the economic production in the following economic sectors: agriculture, fishing, hydropower generation, the water sector, public administration, the health sector and various sectors comprising the tourism economy.  Therefore, the loss of ecosystem services indirectly results in losses in GDP;
  • The study shows that the value of the forest ecosystems services, apart from timber logging, adds another, and highly significant, 800% to carbon value;
  • The total losses in forest ecosystems services for the whole country was estimated at 812,755 million UGS in 2015. The total marginal value of these ecosystems services plus the sustainable timber harvest and non-timber forest products collections, was equivalent to 491,000 UGS/ha.

Logging represents the single largest ecosystem value at 1,315,892 UGS/ha in 2015. This rate of timber harvesting is unsustainable and comes at the expense of other very important ecosystem services.

Estimates of these other ecosystem services include: 

  • Gathering of non-timber forest products (NTFP), carbon losses and habitat provision at 149,000, 513,000 and 710,000 UGS/ha respectively;
  • Health service, resulting from preventing malaria incidence is as large as the timber provisioning service at 1,131,000 UGS/ha[1];
  • The other, still highly significant services display values below 13,000 UGS/ha (these include water provisioning, water yield available for hydro-power generation, effects on aquaculture and inland fishing, and natural disaster mitigation by tropical forests).

Combined, these figures represent a net loss to the economy of Uganda.

The study that lead to the establishment of the prototype Forest Account was conducted in Uganda to provide decision-makers with scientific information and insights on the cost-benefit of undertaking alternative management actions of forests versus business-as-usual (BAU) status quo. It uses internationally recognized and validated techniques for accounting and valuation of natural capital.

In addition, the study makes significant progress towards designing and testing policy instruments to address Uganda’s deforestation problem and seeks to create connections between landholder decision-making and national economic impact by creating incentives for sustainable forest management.

The study recognizes that the short-term benefits of deforestation, for the most part, still far outweighs the long-term benefits of carbon capture and, therefore, a carbon mechanism on its own is not sufficient to change behavior.

However, the value of the other forest ecosystem services adds a highly significant 800% to carbon value. When all these values are considered, and assuming that suitable payments for ecosystem services measures could be found, the fact that forest conservation is more valuable could provide sufficient incentive to change deforestation behavior.

The Government of Uganda launched its draft national REDD+ strategy in November 2017, which contains plans and options for management of forests to reduce carbon emissions and maintain valuable ecosystem services such as biodiversity, water supply, soil protection and wealth creation for improved livelihoods.

Article by Thierry de Oliveira, Chief Economist at the Science Division, UN Environment and Anne Martinussen, Regional Technical Advisor, Climate and Forests, UNDP. 

[1] Deforestation increases the incidents of malaria because it creates favorable conditions for the Anopheles mosquito.

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