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Theme 2: Sustainable production and development

It is important to track progress towards ending commodity-driven deforestation through shifting to sustainable commodity production, especially in light of the GLD commitment to stop forest loss and land degradation by 2030, and the private sector goal to eliminate deforestation and ecosystem conversion within supply chains by 2025.  
Commodity-driven deforestation is defined as permanent tree cover loss due to the production of agriculture, mining, and energy infrastructure. It is measured using estimates both including and excluding fire-related losses. In 2022, 4.2 to 4.8 million hectares (Mha) of forests were destroyed permanently to make room for commodity production, mostly agriculture. This is an increase of 5.6 to 7.7% compared to 2021. The estimate that includes fire-related loss (4.8 Mha) is a slight decrease compared to a 2018 to 2020 baseline; on the other hand, if fire-related losses are excluded (4.2 Mha), then the 2022 value was 7.7% higher than the average loss in 2018 to 2020. Recent deforestation rates indicate that the world is not likely to eliminate commodity-driven deforestation by 2025 or 2030. 

It is important to track progress towards ending commodity-driven deforestation through shifting to sustainable commodity production, especially in light of the GLD commitment to stop forest loss and land degradation by 2030, and the private sector goal to eliminate deforestation and ecosystem conversion within supply chains by 2025.  
Commodity-driven deforestation is defined as permanent tree cover loss due to the production of agriculture, mining, and energy infrastructure. It is measured using estimates both including and excluding fire-related losses. In 2022, 4.2 to 4.8 million hectares (Mha) of forests were destroyed permanently to make room for commodity production, mostly agriculture. This is an increase of 5.6 to 7.7% compared to 2021. The estimate that includes fire-related loss (4.8 Mha) is a slight decrease compared to a 2018 to 2020 baseline; on the other hand, if fire-related losses are excluded (4.2 Mha), then the 2022 value was 7.7% higher than the average loss in 2018 to 2020. Recent deforestation rates indicate that the world is not likely to eliminate commodity-driven deforestation by 2025 or 2030. 

While there are multiple measures that can be effective at reducing ecosystem conversion and degradation, evidence suggests that establishing and expanding the coverage of protected areas is one effective strategy to prevent the conversion and degradation of forests and other land ecosystems and advance forest, sustainable land use, biodiversity, and climate goals. Multiple studies have found that lands designated as protected areas – such as a national parks, wilderness areas, or national monuments – consistently experience lower levels of deforestation and less greenhouse gas emissions. Currently, 16% of the world’s terrestrial ecosystems and inland waters lie within protected areas. 

While there are multiple measures that can be effective at reducing ecosystem conversion and degradation, evidence suggests that establishing and expanding the coverage of protected areas is one effective strategy to prevent the conversion and degradation of forests and other land ecosystems and advance forest, sustainable land use, biodiversity, and climate goals. Multiple studies have found that lands designated as protected areas – such as a national parks, wilderness areas, or national monuments – consistently experience lower levels of deforestation and less greenhouse gas emissions. Currently, 16% of the world’s terrestrial ecosystems and inland waters lie within protected areas. 

The world’s forests and other land ecosystems are under continuous and increasing pressure from the unsustainable expansion of agricultural production, as well as other extractive activities such as mining and logging. One effective way to safeguard these lands is to institute a moratorium on ecosystem conversions. For example, in 2006, a group of large soy traders agreed to avoid purchasing soybeans from areas of the Brazilian Amazon that were deforested after 2008. This was successful in preventing an estimated 18,000 km of deforestation in Brazil between 2006 and 2016, although roughly 4,100 km of deforestation was displaced to nearby forested countries. In 2018, Indonesia also issued a moratorium on new palm oil concessions and in 2019, made another nationwide moratorium on new concessions in primary forests and peatlands permanent, both of which contributed to declines in forest loss between 2018 and 2021. 

The world’s forests and other land ecosystems are under continuous and increasing pressure from the unsustainable expansion of agricultural production, as well as other extractive activities such as mining and logging. One effective way to safeguard these lands is to institute a moratorium on ecosystem conversions. For example, in 2006, a group of large soy traders agreed to avoid purchasing soybeans from areas of the Brazilian Amazon that were deforested after 2008. This was successful in preventing an estimated 18,000 km of deforestation in Brazil between 2006 and 2016, although roughly 4,100 km of deforestation was displaced to nearby forested countries. In 2018, Indonesia also issued a moratorium on new palm oil concessions and in 2019, made another nationwide moratorium on new concessions in primary forests and peatlands permanent, both of which contributed to declines in forest loss between 2018 and 2021. 

Natural and environmental crimes threaten the environment and undermine sustainable development, international security, and the rule of law. Such crimes can include illicit logging, mining, fishing, wildlife trade or land conversion, all of which can be financial drivers for criminal organizations and terrorism. Environmental crimes are costly, amounting to about USD 280 billion in criminal gains and costing governments USD 30 billion in lost tax revenue each year. Public and private institutions should implement Anti-Money Laundering (AML) and Know Your Customer due-diligence regulatory frameworks to uncover and prevent unintended support of environmental crimes and activities.  
The Financial Action Task Force, an inter-governmental body, sets standards to prevent global money laundering and rates countries in terms of the effectiveness of their anti-money laundering systems. According to the Task Force’s 2022 assessment ratings, only 3% of countries have substantial levels of effectiveness to ensure that financial institutions are implementing preventative AML measures and reporting suspicious activities. No countries were shown to have high levels of effectiveness. Although the rating doesn’t specifically address natural resource infractions, countries that have financial institutions effectively applying AML measures are best placed to track environmental crimes. 

Natural and environmental crimes threaten the environment and undermine sustainable development, international security, and the rule of law. Such crimes can include illicit logging, mining, fishing, wildlife trade or land conversion, all of which can be financial drivers for criminal organizations and terrorism. Environmental crimes are costly, amounting to about USD 280 billion in criminal gains and costing governments USD 30 billion in lost tax revenue each year. Public and private institutions should implement Anti-Money Laundering (AML) and Know Your Customer due-diligence regulatory frameworks to uncover and prevent unintended support of environmental crimes and activities.  
The Financial Action Task Force, an inter-governmental body, sets standards to prevent global money laundering and rates countries in terms of the effectiveness of their anti-money laundering systems. According to the Task Force’s 2022 assessment ratings, only 3% of countries have substantial levels of effectiveness to ensure that financial institutions are implementing preventative AML measures and reporting suspicious activities. No countries were shown to have high levels of effectiveness. Although the rating doesn’t specifically address natural resource infractions, countries that have financial institutions effectively applying AML measures are best placed to track environmental crimes. 

Although most tropical primary forest loss occurs in just a handful of tropical forested countries, much of this loss is driven by the production of agricultural commodities for international trade, including beef, soy, palm oil, and cocoa; and products made with these commodities such as leather and chocolate. Demand from wealthier countries, in particular, drives much of this unsustainable production. In 2017, for example, almost 1.3 million hectares (Mha) of deforestation were embodied in internationally traded commodities. The countries with the highest levels of imported deforestation that year were China, India, and the United States, responsible for importing a collective 0.49 Mha of embodied deforestation. 

Although most tropical primary forest loss occurs in just a handful of tropical forested countries, much of this loss is driven by the production of agricultural commodities for international trade, including beef, soy, palm oil, and cocoa; and products made with these commodities such as leather and chocolate. Demand from wealthier countries, in particular, drives much of this unsustainable production. In 2017, for example, almost 1.3 million hectares (Mha) of deforestation were embodied in internationally traded commodities. The countries with the highest levels of imported deforestation that year were China, India, and the United States, responsible for importing a collective 0.49 Mha of embodied deforestation. 

The production of internationally traded agricultural commodities which drive unsustainable agricultural expansion into primary forests – such as beef, soy, palm oil, and cocoa – is also a significant source of greenhouse gas (GHG) emissions. For example, a recent study found that in 2014, 34% of GHG emissions from deforestation were embodied in internationally traded commodities; with developed countries and emerging economies importing larger shares of embodied deforestation. 

The production of internationally traded agricultural commodities which drive unsustainable agricultural expansion into primary forests – such as beef, soy, palm oil, and cocoa – is also a significant source of greenhouse gas (GHG) emissions. For example, a recent study found that in 2014, 34% of GHG emissions from deforestation were embodied in internationally traded commodities; with developed countries and emerging economies importing larger shares of embodied deforestation.