September 30 2022 2:58 PM E-paper Subscribe Sign in My Account Sign out

Financial incentives can limit deforestation—World Bank

Kufr Rakeb  (5)
A photo of a forest in Kufr Raken, in northern Jordan, taken on March 18, 2021. (Photo: Jason Ruffin/JNews)
AMMAN — Although small in surface area, forests in Jordan contribute to local biodiversity, agriculture, ecotourism, and a variety of essential socio-economic systems, experts agree, as an international report called for environmental taxes and agricultural subsidies to help protect local forests.اضافة اعلان

The new report, issued by the Forest Investment Program and the World Bank, recommends the use of fiscal policy to limit forest degradation. In this urgent call to action, environmental taxation and agricultural subsidies are proposed as instruments that nations, including Jordan, can impose to promote forest sustainability. 

The reforms suggested by the report include the taxation of environmental commodities, the transfer of funds to entities with better-preserved forests, agricultural subsidies to reward sustainable management of forests, and tax discounts for companies that meet certain environmental standards. 

A fiscal incentive program in Jordan, as suggested by the World Bank report, is “extremely important as they can bring financial benefits to private land-owners,” said Director General of Royal Society for the Conservation of Nature, Yehya Khaled, in an interview with Jordan News. However, in practice, these programs require planning and collaboration.

“We need negotiations and consultations with different stakeholders in the sector to find the best way to apply this,” Khaled said. Additionally, a detailed information system is essential to implement such a program. “Unfortunately, we do not think that there is a national inventory system for the whole forest to process or analyze the situation,” Khaled explained. 

The report encouraged policymakers to integrate these policies into their local systems. While the report recognizes that standalone fiscal incentives are not a “silver bullet,” when incorporated into existing frameworks they can achieve a “triple win of being good for forests, good for development, and good for the climate.” 

Healthy forests are essential for biodiversity as well as socioeconomic development. According to the Global Forest Resource Assessment, in 2015, Jordan contained 97.5 kilo hectares of forest, covering 1.1 percent of the country. However, the Global Forest Watch reports that between 2001 and 2020, Jordan lost eight hectares of tree cover, equivalent to a 0.33 percent decrease in tree cover since 2000.

The agriculture and energy sectors, in addition to environmental services including climate regulation, erosion prevention, soil fertility, and crop pollination, are all dependent on forest ecosystems. 

Jordan’s agricultural sector, according to the Jordan Investment Commission, is one of the Kingdom’s most competitive sectors. In addition to supplying crops and livestock for local consumption, agriculture products represented nearly 18 percent of Jordan’s exports in 2016. 

Forests in Jordan, however, are facing many challenges. 

“The challenges are either natural such as the impact of climate change on environmental systems, or human-induced, including urban expansion and urban planning,” United Nations Development Program projects coordination specialist Sami Tarabieh said in an interview with Jordan News

The lack of a clear plan for protecting forests is also a problem, Tarabieh explained, “as without a clear and effective framework, these resources are exposed to exploitation and overuse.” 

Ecotourism is an example of a framework that provides incentives for forest protection in Jordan by both governmental and private entities.

“Mechanisms such as ecotourism play a role in conservation as nature becomes a source of revenue and this creates a motive to protect it,” Tarabieh said. 

At a time when COVID-19 lockdowns have created economic instability, especially in emerging economies such as Jordan, the report finds that “implementing the right fiscal instruments can help to meet climate, development, and COVID recovery goals without diverting large amounts of public funds or increasing public debt.”

Currently, most government financial policies in Jordan aim to stimulate short-term economic growth by depleting natural resources, wrote Farah Alatiat for Al-Ghad Arabic daily. Therefore, if applied correctly a fiscal-oriented solution would enable decision-makers to harness the power of incentives to direct development onto a more sustainable path in the long run.