copy the linklink copied!1. Towards sustainable land use: key issues, interactions and trade-offs in the land-use nexus

copy the linklink copied!Multiple interlinked challenges and the need for coherent and co-ordinated action

Governments are faced with multiple and overlapping challenges, including improving livelihoods, tackling climate change, mitigating biodiversity loss and addressing food insecurity, shortages and waste. To address these interconnected challenges, governments would benefit from national strategies and plans, institutions and policies that provide coherence between these areas. Looking across these three elements, this report assesses the interactions, potential synergies and trade-offs between climate mitigation, sustainable ecosystems management and food security in the land-use sector1. Drawing on experiences and insights across six countries, the report examines both supply-side and demand-side policies, and aims to identify best practices and options for aligning these issues in the land-use sector.

Land-use systems and management play a crucial role in achieving several of the Sustainable Development Goals (SDGs), including those on ending hunger (SDG 2), clean water (SDG 6), clean energy (SDG 7), climate action (SDG 13), and life on land (SDG 15). Effective land-use management is also critically important for meeting climate goals under the UNFCCC’s Paris Agreement and the Aichi biodiversity targets under the Convention on Biological Diversity (CBD). GHG emissions from the land-use sector are significant, accounting for 17% of total anthropogenic GHG emissions in 2014 (Figure 1.1) (CAIT Climate Data Explorer, 2017[5]). Moreover, approximately 80% of all threatened terrestrial bird and mammal species are imperilled by agriculturally driven habitat loss (Tilman et al., 2017[6]). Agriculture is a major source of nitrous oxide emissions, which is a greenhouse gas and the dominant anthropogenic cause of ozone depletion (Ravishankara, Daniel and Portmann, 2009[7]). Agriculture also accounts for an estimated 70% of total freshwater withdrawal worldwide (OECD, 2018[8]) and is a significant source of phosphorous and nitrogen pollution.

More specifically, CO₂ emissions (and to a lesser extent N₂O) need to peak as soon as possible and then fall sharply to meet the Paris Agreement’s goals. The Paris Agreement calls explicitly for all countries to “take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases as referred to in Article 4, paragraph 1(d), of the Convention, including forests”, and “take action to implement and support” REDD+. The Paris Agreement also recognises the importance of safeguarding food security, and the vulnerability of food production systems to climate change. Even when accounting for food security constraints, REDD+ and reforestation are potentially very important for mitigating CO₂ emissions from land use (Griscom et al., 2017[9]). Grassi et al. (2017[10]) show that full implementation of (Intended) Nationally Determined Contributions ((I)NDCs) submitted by countries for UNFCCC COP21 would turn land use from a global net anthropogenic source during 1990-2010 (1.3 +/- 1.1GtCO₂e/yr) to a net sink of carbon by 2030 (up to -1.1 +/- 0.5GtCO₂e/yr).

Reaching the long-term goals of the Paris Agreement is also likely to require the considerable use of biomass-based energy, as well as sequestration by land-based sinks. For example, the IEA project that biomass energy use would triple between 2015 and 2060, doubling its share of the total energy mix to reach 22% in a scenario that limits temperature increases to two degrees above pre-industrial levels (IEA, 2017[11]). The implications for land use are even more pronounced under the IPCC scenarios to keep global warming below 1.5 degrees, which estimate an additional 0-600 million ha of land will be required for bioenergy crops by 2050 relative to 2010 (IPCC, 2018[12]). The additional land for bioenergy crops is predicted to come from a reduction in pasture areas and represents a significant transformation of land-use systems. The extent to which these scenarios rely on bioenergy crops depends to some extent on the reliance on bio-energy with carbon capture and storage (BECCS) technology. But where increased use of bioenergy is required, it is likely to have significant implications for land use (Creutzig et al., 2014[13])2, and the increased use of bioenergy may increase pressure on land, water, food systems, biodiversity and ecosystems. However, the IPCC notes “there is still low agreement on these interactions”, and there are local niches where different objectives can be successfully balanced (de Coninck et al., 2018, p. 324[14]).

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Figure 1.1. Greenhouse gas emissions by sector (2014)

Source: CAIT (2017[5]), Country Greenhouse Gas Emissions (database), http://cait.wri.org/ and FAOSTAT (2018[15]), Food and Agriculture data (database), http://www.fao.org/faostat/ .

Land use, agriculture and forests are also key to meeting several of the Aichi Biodiversity Targets under the CBD and are also likely to remain important in the CBD’s post-2020 biodiversity framework. Aichi Target 5 for example states: “By 2020, the rate of loss of all natural habitats, including forests, is at least halved and where feasible brought close to zero, and degradation and fragmentation is significantly reduced” and Target 7 is: “By 2020 areas under agriculture, aquaculture and forestry are managed sustainably, ensuring conservation of biodiversity”.

More generally, ecosystems provide an array of goods and services that contribute to human well-being. Land-use decisions alter ecosystems, ranging from minor and reversible changes to complete and non-reversible transformation of natural and human-dominated landscapes (Adams, Pressey and Álvarez-Romero, 2016[16]). Ecosystems provide services such as food provisioning, forage, and bioenergy, and thus contribute to livelihoods. Ecosystems also provide services such as nutrient cycling, water quality, habitat provision for biodiversity, and carbon sequestration. These latter services provide benefits that are more difficult to quantify in monetary terms and therefore frequently underestimated, though the values can be very high. Climate change also affects ecosystems, in various ways, including geographic shifts, changing their composition, and disrupting functioning.

Policies to ensure sustainable land use, therefore, need to account for – and be synergistic with – other nationally and internationally agreed objectives in the areas of food security, climate, biodiversity and forests, amongst others, and contribute to national development goals. Climate change itself will have impacts on the ability of land to store carbon, the productivity of land (in particular, changing levels of water availability are expected to significantly impact on agricultural production) and on the resilience of ecosystems. And projected increasing levels of reactive nitrogen (compounds that support plant growth) will influence the storage of carbon by ecosystems.

Besides competition between different land uses, there may be conflicts between the policy goals of mitigating climate change and reducing biodiversity loss. Certain monoculture plantations, for example, have a greater carbon uptake per hectare than a mixed forest. However, planting monocultures can have negative local impacts, such as reducing biodiversity, or impacting the nitrogen cycle (Smith et al., 2014[17]). If plantations replace tropical forests, they can lead to significant carbon losses, particularly in the short term (e.g. from losses in soil carbon), though a significant fraction of the CO₂ emitted remains in the atmosphere for thousands of years (Archer et al., 2009[18]).

The trends in land-use change and emissions, and their underlying drivers, vary considerably across regions and countries (see Chapter 2). Demand for agricultural land (predominantly for food or livestock feed) places large pressure on forests, notably in developing countries. If demand for bioenergy also rises, this could further exacerbate competition for land. There was a net forest loss globally of seven million hectares per year in 2000-2010 (approximately the size of Belgium and Netherlands combined), and a net gain in agricultural lands of 6 million hectares per year (FAO, 2016[19]). Indeed, despite the continual intensification of agricultural production over the last several decades (FAO, 2011[20]), the majority of deforestation between 2000 and 2010 was driven by large-scale commercial agriculture (40% of the total) and subsistence agriculture (33% of the total) (OECD, 2016[21]). However, according to FAO (2018[22]), the rate of forest loss slowed between 2010-2015.

Almost all deforestation in 2000-2010 was in the tropics whereas forested areas in temperate regions actually increased (FAO, 2016[19]). The loss of tropical forest is significant, as these forests contain proportionally more biodiversity than temperate forest. For example, despite covering only 7% of the Earth’s surface, tropical forests contain around 50% of all animal and plant species. In some countries (e.g. Korea, Portugal), both agricultural land and forests have shrunk since 2000. In contrast, some other countries (e.g. UK, Chile) have increased both agricultural and forested areas (FAO, 2016[19]; UCS, 2014[23]). Where countries have increased both agricultural land and forested areas, this is often the result of converting grassland or bare land, which could have negative consequences for biodiversity (Haščič and Mackie, 2018[24]).

The competition in land use between forest and agriculture will be exacerbated by the projected rise in world population to 9.7 billion people by 2050, the consequent increase in food demand and changing consumption patterns towards more carbon intensive diets (OECD, 2016[25]; United Nations, Department of Economic and Social Affairs, Population Division, 2019[26]). The OECD (2012[27]) projects a continued decline in the area of primary forests to 2050 (Figure 1.2), although the level of total forest area is expected to grow slightly.3 A decline in primary forests would have adverse impacts on biodiversity, carbon storage, lead to significant emissions and negatively impact the welfare of local communities that depend on the forests for primary consumption and other resources.

Competition for land use will be intensified further if land is needed for the production of biofuel (e.g. for transport) or other biomass. The extent of such competition would vary considerably, depending on the type of bioenergy use assumed (IPCC, 2018[12]). Thus, bioenergy land use would be much higher if a large proportion is first-generation bioenergy (produced from crops), than if bioenergy was second generation (produced from agricultural residues and waste or forest residues) or third generation (from engineered energy crops such as algae).

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Figure 1.2. Global forest area change baseline (2010-2050)

Source: OECD (2012[27]) OECD Environmental Outlook to 2050, https://doi.org/10.1787/9789264122246-en.

Emissions from land use, land use change and forestry (LULUCF) play a much larger role in some countries than in others (see Chapter 2). LULUCF was responsible for a particularly large share of total national emissions in some countries, including Indonesia and Brazil.

In the OECD, agricultural production volume increased by an average of 1.6% per year between 1990-2010, while GHG emissions intensity of agriculture declined by an average of 2% per year over the same timeframe (OECD, 2014[28]). This was achieved by switching to cost-effective practices such as more efficient fertilisation and input that reduces nitrous oxide emissions. Technical solutions to address potential risks to agricultural yields from climate change exist, though further efforts will be needed at national, sector and farm level to ensure a productive and resilient agricultural sector (OECD, 2014[28]). Projections to 2050 under a business-as-usual scenario have been developed for terrestrial biodiversity, measured by Mean Species Abundance.4 The projections suggest the decrease in mean species abundance will go from 34% in 2010 to 38%, 43% and 46% in 2050 under three different Shared Socioeconomic Pathways (SSP) scenarios (Figure 1.3).

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Figure 1.3. Pressure on global diversity, under different scenarios, compared to natural conditions

Source: Van der Esch et al (2017[29]), Exploring future changes in land use and land condition and the impacts on food, water, climate change and biodiversity: Scenarios for the Global Land Outlook, https://www.pbl.nl/sites/default/files/cms/publicaties/pbl-2017-exploring-future-changes-in-land-use-and-land-condition-2076b.pdf

Note: MSA is an indicator of naturalness or biodiversity intactness. It is defined as the mean abundance of original species relative to their abundance in undisturbed ecosystems. An MSA of 0% means a completely destroyed ecosystem, with no original species remaining.

copy the linklink copied!Biophysical interactions and their implications

An evaluation of potential synergies and trade-offs between climate mitigation, ecosystems management and food security5 in the land sector is crucial to ensure a coherent response and help policy-makers at both national and sub-national levels to make better-informed policy choices. A first step is to explicitly identify the biophysical interactions between different aspects of this nexus.

Recent literature (e.g. (Bustamante et al., 2014[30]; Power, 2010[31]; Munaretto and Witmer, 2017[32]; The Royal Society, 2007[33]; Cramer et al., 2017[34]; Delzeit et al., 2016[35]; ICSU, 2017[36])) has highlighted different strengths of biophysical synergies and trade-offs, as well as variation in the strength of these synergies and trade-offs in different contexts. Munaretto and Witmer (2017[32]) and the ICSU (2017[36]) assigned scores estimating the direction and strengths of various interactions, based on expert opinion. In some areas, there are no or only limited interactions. For example, a supply-side action such as improving agricultural resource efficiency is unlikely to impact a demand-side action such as reducing food waste. However, in other areas, interactions can be significant – and either positive or negative (see below and Table 1.1). The extent of such interaction can be influenced by site-specific issues, as well as by policies.

For the purposes of this analysis, these interactions are characterised as:

• Strong synergies. For example, maintaining or expanding native forest cover, in some regions6, will maintain or increase carbon stocks and therefore mitigate GHG emissions, prevent a decline in soil quality (soil degradation), and will protect or enhance biodiversity and other ecosystem services provided by forests.

• Either synergies or trade-offs depending on how a particular issue is addressed.7 For example, intensifying food production could either reinforce or impede GHG mitigation efforts. Intensifying livestock farming can help to reduce GHG emissions from livestock by allowing for manure management systems to be put in place.8 In contrast some measures to intensify food production could increase emissions of GHG, e.g. via a higher use of fertilisers and associated N₂O emissions, or increased energy-related GHG emissions from increased use of farming machinery.

Key synergies and trade-offs are presented in Table 1.1. This highlights that there are many win-win synergies in the land-use nexus (i.e. positive scores). It also highlights that in some areas, impacts can range from positive to negative (depending on how the action is carried out), or can just involve trade-off (i.e. negative scores).

Ranges from positive to negative impacts can occur, for example, in the context of efforts to meet the growing demand for food. If this is met via expansion of agricultural land via conversion from forests, this could lead to increased GHG emissions, increased soil degradation, and reduction in biodiversity. Alternatively, efforts could be made to meet increased food demand by intensifying agricultural production, i.e. to further decrease the yield gap. This gap can be considerable for production of key crops in some areas (Fischer, Byerlee and Esmeades, 2014[37]), and reducing the gap may reduce pressures on land conversion, thus leading to positive impacts on biodiversity (however there is still considerable debate on this point - see (Phalan et al., 2011[38])).

Considering the spatial dependence of impacts is key to ensure the delivery of win-wins. Delivering both climate mitigation and biodiversity presents a good example of the spatial dependence of impacts. The biodiversity value of habitat does not scale linearly with area, so large contiguous areas of habitat will deliver greater biodiversity benefits than an equivalent area contained in discontinuous fragments, due edge and other fragmentation effects (e.g. forests, savannah, wetlands) (Haddad et al., 2015[39]). However, carbon sequestration is generally aspatial, thus small patches of land managed for carbon sequestration (such as forest) can deliver similar carbon sequestration to a large contiguous area of the same extent and land cover type, but without providing the same biodiversity benefits (Nelson et al., 2008[40]). Hence, managing land to deliver biodiversity benefits will provide a co-benefit for GHG mitigation, but managing land for GHG mitigation may not provide biodiversity co-benefits (or those benefits will be limited) if the result is an increase in small fragmented areas of forest.

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Table 1.1. Selected synergies and trade-offs in the land-use, biodiversity, climate and food nexus
Note: The ICSU scoring system is as follows:
+ 3: Indivisible: one objective is inextricably linked to the achievement of another
+2: Reinforcing: one objective directly creates conditions that lead to the achievement of another objective
+1: Enabling: the pursuit of one objective enables the achievement of another objective
0: Consistent: no significant interaction, or interactions that are neither positive nor negative.
-1: Constraining: when the pursuit of one objective sets a condition or a constraint on the achievement of another.
-2: Counteracting: the pursuit of one objective counteracts another objective.
-3: Cancelling: progress in one goal makes it impossible to reach another goal.
The table was compiled using this seven-point ICSU scoring framework that identifies causal and functional relations between specific issues. Blank cells indicate no or limited interaction.
1 This category considers actions to protect biodiversity and ecosystems that does not include the expansion and maintenance of forest cover
Source: Authors based on Munaretto and Witmer (2017[32]), Water-land-energy-food-climate nexus: policies and policy coherence at European and international scales, https://www.pbl.nl/sites/default/files/cms/publicaties/WP2_Deliverable%202.1_15nov17_FINAL.pdf and ICSU (2017[36]), A Framework for Understanding Sustainable Development Goal Interactions, https://sustainabledevelopment.un.org/?menu=1300..

copy the linklink copied!The economics of optimal land use

There are strong economic, social and environmental rationales for optimising land use. Globally, ecosystems services were estimated at a value of USD 125-140 trillion (in 2011) (Costanza et al., 2014[41]), higher than the total estimate of GDP in that year. The potential costs of mismanagement in the land-use sector are therefore high. Land degradation9 currently has negative impacts on the well-being of an estimated 3.2 billion people worldwide (IPBES, 2018[2]). The estimated global costs of land degradation vary widely.10 When the costs associated with lost agricultural production, diminished livelihoods, and the lost value of ecosystem services (e.g. clean water and air, erosion prevention and nutrient cycling)11 are included, degradation is estimated to cost up to USD 10.6 trillion every year (ELD Initiative, 2013[42]). This is equivalent to 17% of global gross domestic product.

Landscapes are not static, but rather dynamic systems with significant feedbacks between people and the environment. Therefore, land-use systems must deliver both socially-desirable and environmentally-sustainable outcomes. Understanding the best configuration of land use in a given landscape is challenging from both a technical and policy perspective. Land use should aim to maximise the delivery of ecosystem services, to ensure the maximum societal and environmental benefit is derived from a given landscape. However, trade-offs between the land-uses required to deliver different services mean decisions must be made regarding which services to prioritise in a landscape (IPBES, 2018[2]). For example, maximising food production can negatively impact habitats (and biodiversity), or maximising carbon sequestration can alter the availability of water. While maintaining and enhancing the flows of ecosystem services is important, understanding how to use land to maintain the natural capital stocks which underpin these flows is also crucial (Cowie et al., 2018[43]). Given the increasing impact of climate change on both environmental and human systems, what constitutes optimal land use in a given landscape will change over time, making adaptive management approaches essential for ensuring sustainability.

From an economic perspective, optimal land use entails maximising the net present value of social benefits at global, regional or local scales. However, in practice, measuring the net present value of global social benefits is challenging given the difficulties of comparing market values (e.g. food production) and non-market values (e.g. recreation, habitat provision). Further, the value of social benefits derived from land-use depend on the scale at which they are measured, so the land-use which corresponds to maximum social benefits at local scales may be different to the land-use required to maximize global-scale social benefits (and vice versa). There has been significant progress on incorporating non-market values into economic decision tools, such as cost benefit analysis (for full discussion see (OECD, 2018[44])). However, valuation of non-market goods remains challenging and economic models based on monetary values can fail to adequately account for the societal and cultural values of some ecosystem services.

To address the issue of comparability, multi-criteria decision analysis (MCDA) has been developed to allow the inclusion of data from various sources (e.g. economic, ecological, stakeholder opinions) into quantitative decision making models and has been used extensively for land use (Kaim, Cord and Volk, 2018[45]). MCDA techniques are more flexible that traditional economic decisions methods and can be used to identify win-wins in land use, where economic, social and environmental goals align (e.g. (Dwyer et al., 2009[46]) or where current land use plans could be improved (Kennedy et al., 2016[47]). But, understanding the desired outcomes for land use from social, economic and environmental perspectives (including ecosystem services and natural capital) and how they influence each other at national and local scales is a key prerequisite for using MCDA (Kaim, Cord and Volk, 2018[45]).

Many analyses estimate the environmental or human welfare impact of expected global land use and land cover change (e.g. (IPBES, 2018[2]). While useful for identifying opportunities for optimising land-use at a broad scale, these assessments often do not reflect the variety of land uses nor the local scale biophysical and economic conditions within countries, and thus likely do not reflect land-use realities at a local and landscape level. A comprehensive model is the Global Biosphere Management Model (GLOBIOM) (Havlik et al., 2014[48]), a partial equilibrium model that covers the agricultural and forestry sectors, including the bioenergy sector. Other tools are also evolving, such as InVEST (Integrated Valuation of Ecosystem Services and Trade-offs), from the Natural Capital Project, which enables assessment of trade-offs in ecosystem services at a more local scale.12

copy the linklink copied!International trade

International trade in goods and services is of fundamental importance to land use, climate mitigation, ecosystems and food globally. At the macro level, international trade can, in theory, contribute to positive land-use outcomes through various mechanisms. By allowing the production of forest and agricultural products in the most suitable places, for instance, international trade could potentially increase global production efficiency. Through allocative efficiency, increased competition, and incentives for R&D, international trade can, in theory, contribute to reducing the net environmental impact of a given level of production (Blanco G. et al., 2014[49]), thereby enhancing resource efficiency and the transition to a circular economy. In addition, international trade plays an important role in global food security (Tallard, Liapis and Pilgrim, 2016[50]).

In practice, however, by shifting production sites and patterns, international trade can drive dynamics leading to adverse outcomes at the local level, for at least some dimensions of the land-use, biodiversity, climate and food nexus (henceforth referred to as the land-use nexus). Trade exerts land-use impacts in the case study countries by increasing international demand for land-related products such as agricultural commodities and forest products, which can be produced domestically. Supply-side responses to demand increases drive agricultural expansion (e.g. in Brazil, Indonesia) and agricultural intensification (e.g. in France, Mexico, New Zealand, Ireland). Effective policies for managing land-use domestically are need to prevent the supply side responses leading to increased GHG emissions, biodiversity loss and increased pollution. These impacts often originate from incorrectly priced externalities, undermining the maximisation of global social benefits. These shifts in the production of agricultural goods as a consequence of international trade have resulted in some of the burden of the environmental impacts of production moving from the developed world to the developing world (Krausmann and Langthaler, 2019[51]).

Unless carefully managed at the domestic level, the inherent trade-offs between domestic polices for controlling environmental impacts and the promotion of products for export can result in policy misalignments. Further, exclusive reliance on the internationally agreed method of counting GHG emissions at the point of production (rather than consumption) can mask climate impacts of production systems and consumption choices that are inefficient from a GHG emissions perspective, in particular from induced land-use change. For instance, because emissions embodied in imported intermediate inputs (such as animal feed) are not associated with final outputs (such as beef or dairy), production systems with significant upstream emissions can appear less emissions-intensive than they indeed are (see also Box 2.1).13 At the same time, awareness of consuming countries’ responsibility for nexus outcomes in producing countries, and their impacts abroad that their consumption and policy choices can have, is growing. This is particularly true for national policies relating to global goods such as climate mitigation and biodiversity protection.

copy the linklink copied!The need for coherent frameworks

Coherent land-use frameworks are key for informing the decisions made by governments, corporations and society. Setting up coherent frameworks can be facilitated at key entry points in the decision-making process. One is via the establishment of national strategies or plans, which aim to provide a shared vision and objectives of where a country wishes to transition towards. The institutional framework within a country, and the degree of oversight, collaboration and interaction in policy areas or sectors that have impacts on each other, will also likely impact on how decisions are made. These two elements, national strategies and institutional co-ordination, will ultimately also impact on the policy-making process and the resulting policy instruments that are adopted, or how existing policy instruments are revised, to take account of trade-offs and so as to maximise synergies.

Policies relating to land use, biodiversity, climate and food can impact multiple other areas such as economic development, health, poverty eradication and trade. Many countries have explicitly recognised these interlinkages, e.g. in the “voluntary national reviews” (VNRs) (UNDESA, 2017[52]) prepared to review progress to the SDGs, and are increasing institutional co-ordination as a result. Many countries’ VNRs also recognise the institutional, financial, environmental and other challenges in meeting these challenges.

Multiple types of policies can be used to improve environmental outcomes and policy alignment in the land use nexus. Details of policy design and implementation can exacerbate or mitigate biophysical trade-offs. For example, a country may have in place both incentives for food production from specific crops, and incentives to maintain or expand forestry. The impact of these incentives will depend on their relative level, coverage and ease of access.

Trade-offs and synergies in the land-use nexus are, however, broader than biophysical ones. Indeed, there are synergies and trade-offs at and across varying dimensions, including:

• At the level of an individual farm. For example, increased use of agroforestry systems (when trees are planted in combination with crops) can improve resilience to climate impacts such as drought or extreme heat because of the shade provided by the trees. However, this shade can also reduce crop yields.

• Between different spatial scales (including sub-national and transboundary impacts). For example, increased consumption of water for agriculture upstream can increase upstream agricultural yields, but reduce water availability and agricultural yields downstream.

• Over time. For example, leaving crop residues onsite will reduce the potential for bioenergy production in the short term, but can avoid a reduction in soil fertility in the longer-term.

• Between different groups of stakeholders. For example, if intensifying food production leads to increased nitrate pollution in surface water, then this could negatively affect water quality for downstream populations and ecosystems. However, by increasing food production levels and limiting pressure on food price rises, it could positively affect the population as a whole.

• Between policy goals. For example, a commitment to expand the production of dairy products for export, which can lead to an increase in absolute GHG emissions, and a national commitment to reducing emission under the Paris agreement.

Governments will need to be cognisant of the multiple dimensions of synergies and trade-offs in order to identify and implement appropriate policy responses. The choices made by policy-makers, therefore, should balance different environmental issues (e.g. climate mitigation and biodiversity), different types of stakeholders (e.g. farmers vs consumers), different locations (e.g. within a country, or at a transboundary level), and over time.

Secondary (i.e. indirect) impacts of policies can also be important. For example, production of palm oil in Indonesia has increased GHG emissions via land-use change from the expansion of oil palm plantations. However, the introduction of a levy on exports of palm oil or its derivatives has also helped to strengthen the Indonesian biodiesel market, and thus displace some use of fossil fuels (Wright, Rahmanulloh and Abdi, 2017[53]) (see Chapter 5).14 Whether this displacement of fossil fuel use in Indonesia through increased biodiesel usage, has led to reduced GHG emissions, or increased GHG emission from increased land-use change is unclear.

Thus, the interaction (or lack thereof) of policies in this land use nexus can impact their effectiveness. Identifying potential interactions is important, as action will be needed by a wide variety of stakeholders in order to successfully achieve multiple goals. For example, farm-level mitigation measures will need to be implemented in order for the EU to achieve its GHG mitigation commitment, but these measures will impact food production (European Parliament, 2014[54]). It is also important to ensure that policy messages to specific stakeholders are clear. However, this is not always the case. For example, in Mato Grosso, (a key Brazilian state in terms of agricultural output that produced 31.3% of Brazil’s soybean production in 2009 (Arvor et al., 2012[55]) and where 89% of forest area has been deforested since 2004 (OBT, 2017[56])), there were at least eight separate dialogues on deforestation relevant to farmers (Nepstad et al., 2013[57]).

There are both supply-side and demand-side policy options to reduce GHG emissions from land use (see e.g. Smith et al., (2014[17]); Bryngelsson et al., (2016[58]); Kiff Wilkes and Tennigkeit, (2016[59])), with various challenges associated with each. There are also some technical supply-side measures that could help to reduce emissions from the agricultural sector. For example, some rice production practices such as alternate wetting and drying can help intensify production while reducing methane emissions (CTA, 2013[60]).

Demand-side measures are also likely to have significant mitigation potential in the agricultural sector (Smith et al., 2014[17]). This is partly because the current agricultural system is not efficient, with high levels of food waste (Teuber and Jensen, 2016[61]). Further, some sources of protein (e.g. beef and dairy products) are considerably more GHG-intensive than others (e.g. poultry) (Smith et al., 2014[17]; Popp, Lotze-Campen and Bodirsky, 2010[62]).

A number of policy-related barriers have been identified to improve the ability of land use to address both climate and biodiversity concerns. These include barriers related to (Wreford, Ignaciuk and Gruère, 2017[63]) :

• Institutional structure and co-ordination: a lack of integration between land use, forestry and agricultural policies, as well as climate and biodiversity policies (e.g. some of the long-term mitigation strategies submitted to the UNFCCC do not refer to biodiversity and/or ecosystems), a lack of (or poorly-enforced) land tenure rights may incentivise environmentally-harmful practices, no requirement to manage small plots of land, lack of an investment framework for the AFOLU sector, lack of focus on a “landscape approach” to managing land15;

• Ecosystem valuation: understanding the true value of ecosystem benefits and strengthening policies to account for positive and negative externalities;

• Policy misalignments: e.g. agricultural subsidies that link support to inputs or to specific production levels (Henderson and Lankoski, 2019[64]);

• Consumer behaviour: e.g. current behaviour can lead to large volumes of consumer waste, and consumer preferences for GHG-intensive food sources.

• Information/awareness: the role of stakeholders, including sub-national governments, financiers, farmers, is important in implementing environmentally friendly responses in the agriculture and forestry sectors. However, these stakeholders may not always be aware of possible responses, or the environmental consequences of their actions.

Overcoming these barriers could play a significant role in the transition to more sustainable land use and agricultural practices. Better aligned policies and informed decisions could help to minimise trade-offs between forestry and agriculture, climate and biodiversity. Moreover, although there are some examples of private sector corporate social responsibility initiatives in the context of sustainable land use, efforts are needed to further encourage the private sector to engage in sustainable land-use policies. The recent OECD-FAO Guidance for Responsible Agricultural Supply Chains (2016[65]) outlines the standards required to build responsible agricultural supply chains.

The need for a coherent policy framework for sustainable development to address interactions across sectors and reconciling divergent policy objectives has already been recognised. The SDG Target 17.14 calls on all governments and stakeholders to enhance policy coherence for sustainable development. However, this can be complex in practice in the land-use nexus, given the multiple interactions (Figure 1.4. ). For example, according to the ICSU scoring system, actions aimed at achieving target 2.4 on sustainable and resilient agricultural practices aligned to ecosystem protection would reinforce the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems. In contrast, achieving SDG target 2.1 to ensure access by all people to sufficient food could potentially conflict with achieving SDG target 7.2 to increase the share of renewable energy if food crops and biofuel production compete for the same land or water (OECD, 2017[66]).

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Figure 1.4. Interactions between selected SDGs

Source: Authors

As part of these efforts to encourage policy coherence, the OECD has developed a toolkit in the context of food security (OECD, 2016[25]). This is composed of a six-section checklist to help policy makers to overcome inconsistencies and promote cross-sectoral synergies for achieving SDG 2. The six overarching sections are generalised below, to apply them to the SDGs of most relevance to the land use nexus (i.e. SDG 2, 6, 7, 13, and 15):

• Consider how domestic policies influence the key dimensions of climate, biodiversity, agriculture and food security in the context of land use;

• Identify policy inter-linkages of relevance across these areas (horizontal coherence);

• Reform or remove policies that create negative spill-over effects;

• Ensure coherence of actions at and between different levels of government (vertical coherence);

• Consider diverse sources of finance to improve food security, climate mitigation and enhance biodiversity and ensure complementarities; and

• Consider contextual factors such as socio-economic circumstances and create enabling conditions.

Applying this framework would entail identifying whether national (political) interests and priorities with specific goals and targets are aligned; and whether the government has a good understanding of the many synergies and trade-offs between policy targets relating to food security, enhanced climate action, and the conservation and sustainable use of ecosystems. This would involve considering issues such as subsidies for agricultural inputs or energy use, land availability and carbon sink function of forests, water availability, trade tariffs, technology transfer, biofuel mandates, and biological pest-control. For example, Article 16 of the 2014 Indonesian law number 39 about plantations (Government of Indonesia, 2014[67]) indicates that the company to whom land rights have been given shall cultivate the whole area within six years, or face penalties. While such a policy will encourage rapid development of land, it will also impede plantation owners from setting aside a proportion of their land for conservation purposes. Food security and other policies may also need to be complemented by strengthened social protection services in many countries in particular for vulnerable groups (the poor, women and children) (OECD, 2016[25]).

Landscape approaches aim to balance the social, environmental and productivity goals in regions where there are several competing land uses. Under landscape approaches, the social, economic and ecological functions of an area are considered holistically to develop spatial and development plans that try to ensure development does not come at the expense of broader socio-economic and environmental benefits. Landscape approaches are generally defined as a set of organising principles rather than prescriptive rules and as such are flexible enough to be applicable across a broad range of socio-economic and environmental contexts (Sayer et al., 2019[68]). Consequently, landscape approaches are increasingly being used - for example the landscape approach is a key underlying principle of the World Bank Forest Action Plan (FY16-20) (World Bank, 2016[69]) and the Bonn Challenge.16

However, despite the emergence of landscape approaches, the high-level integration of climate and biodiversity objectives is, generally, not systematic. For example, only a third of country climate-related “nationally determined contributions” under the Paris Agreement include mention of biodiversity and food – although 78% specifically identify the importance of the agriculture sector (FAO, 2016[70]). Moreover, OCED (2012[27]) highlights that even if there is mainstreaming of biodiversity concerns into other national strategies and programmes (e.g. national development plans), this is not always implemented in practice via policies, nor monitored accordingly.

copy the linklink copied!Key findings of the report

Effective land-use management is essential for achieving many national and international goals and commitments, such as the Sustainable Development Goals, the Paris Agreement and the Aichi Biodiversity Targets. Improved co-ordination and coherence between policy areas is needed to achieve effective land-use management given the inherent interconnections, synergies and trade-offs. This report explores which tools and institutions are best suited to achieving effective land-use management consistent with national and international environmental commitments. The report examines six case study countries to draw out common challenges and opportunities to align policy frameworks relevant to the land-use nexus. The report explores alignments and misalignments between different strategies, institutions and policies that can impede effective action on the ground. The areas covered are: coherence across national strategies and action plans, institutional co-ordination and coherence, and policy instruments relevant to the land-use nexus.

The case study countries in this report are Brazil, France, Indonesia, Ireland, Mexico and New Zealand. These countries were selected because they have large greenhouse emissions from the agriculture and/or forestry sectors (in absolute or relative terms), and nearly all host globally important biodiversity. The case study countries moreover represent a selection of OECD member countries and key partner countries which includes two out of the top three land-use change and forestry emitters globally, and two out of the top four agricultural emitters from OECD (CAIT Climate Data Explorer, 2017[5]).

Insights on coherence within and across national strategies and plans were identified by looking at the Nationally Determined Contributions, Long-Term Low Emissions Development Strategies, National Biodiversity Strategies and Action Plans (NBSAP), Agricultural Development Plans, Trade or Export Plans and National Development Plans in the six countries, suggesting that:

• The prominence of land-use issues covered in different national strategies relevant to the land-use nexus, and the degree of coherence between the strategies, varies substantially. Overall, few of the national strategies and plans examined are specific enough to facilitate the multiple Ministries (and other stakeholders) involved to take policy action in a coherent manner. Moreover, only a minority of the national strategies and plans (including the Irish NBSAP) examined identify who is responsible for what action or target to be achieved.

• Ideally, national strategies and plans should be prepared in a consultative manner, with engagement all of the Ministries whose actions are likely to impact on the national strategy in question, as well as by other key stakeholders. While stakeholder engagement is improving (i.e. compared to past policy processes), further efforts are needed to ensure that this is done consistently across the various different national strategies.

• Governments can encourage greater policy coherence by ensuring that medium-term (i.e. 5-10 year) national strategies and plans have clear objectives, actions and targets. This would allow for any misalignments to be more easily identified. Developing indicators against which progress towards the targets can be assessed also provides greater transparency and accountability. Where possible, the targets should be specific, measurable, actionable, realistic, and time-bound (SMART). In most strategies and plans reviewed, however, this is not the case.

• Existing national strategies rarely explicitly acknowledge misalignments between different national policies in an individual country. This is despite specific requests to do so at the international level, e.g. the UNFCCC requests Parties to report on policies that increase GHG emissions, and the Aichi Biodiversity Targets under the CBD include specific targets to identify and address harmful incentives (Target 3).

• National plans and strategies relevant to trade could explicitly recognise and where possible quantify the linkages between trade policy and the land-use nexus. This includes overarching national development plans and strategies. Good practice examples include France, which is developing a national Strategy to Combat Imported Deforestation (i.e. from abroad), and Ireland which includes a specific target in their NBSAP to identify and address the adverse impacts on biodiversity from trade. Mainstreaming the consideration of land-use implications into general trade policy formulation would contribute to improved policy coherence.

The land-use nexus involves multiple issues and affects multiple actors from both the public and private sectors, and at supra-national, national and sub-national levels. Examining the institutional structures in place in the case study countries highlights the following lessons for institutional co-ordination and coherence:

• Stronger institutional co-ordination both at the horizontal level (between different ministries) and vertical level (e.g. between national and sub-national governments) is needed to ensure the necessary degree of linkage across silos, and to facilitate the coherent design and implementation of policies. The establishment of inter-ministerial committees as well as leadership from the top (i.e. the office of the President, Prime Minister or cabinet) are needed to encourage different stakeholders to develop consistent and co-ordinated policies in the land-use nexus.

• The roles and mandates of institutions should be clearly defined, to increase horizontal alignment of land-use policy. Both lack of institutional co-ordination and overly complex institutional arrangements still occur, and can contribute to policy misalignments. For example, in Indonesia at least eight national ministries are involved in land-use decisions, the mandate of different institutions overlap, and the institution responsible for regulating peatland use has no direct authority over peatland areas. However, while good institutional co-ordination is crucial in promoting policy alignment in this nexus, it is not sufficient by itself to ensure that policies are aligned in practice.

• Countries are intensifying co-ordination of relevant policies, in part by intensifying relevant policy co-ordination mechanisms. This includes setting up an over-arching body - often in the context of national work towards the Sustainable Development Goals. Institutionalising such processes can help improve coherence and co-ordination (e.g. as between the French ministries of agriculture and food, and ministry for an ecological and solidarity transition).

• Vertical alignment of policy creation can be challenging as decision-making power in the nexus is often split between national governments, sub-national governments, and private actors. This decentralisation can undermine the implementation of nexus-relevant policies if the vertical co-ordination of goals is poor. Differing institutional priorities and capacities, and opportunity for local corruption due to lack of oversight can also be a problem. However, decentralisation provides an opportunity to develop innovative context specific solutions (especially in large heterogeneous countries), such as state-specific international conservation funds (in Brazil).

• Multi-stakeholder partnerships involving both public and private actors at national and sub-national scale have been an effective mechanism for influencing the land-use nexus implications of global supply chains. A challenge for government institutions is how to engage and coordinate with these initiatives to ensure maximum effectiveness and alignment with national policy.

Assessing policy frameworks and instruments has highlighted the following insights:

• Clearly defined and enforced land tenure is a prerequisite for effective implementation of policies relevant to the land-use nexus. Without clarity on who owns or has the rights to manage which areas of land, incentives for sustainable use are undermined and policy enforcement becomes challenging. Lack of clarity on land rights can also lead to illegal logging, mining and agricultural activities, issues that are still particularly prevalent in Brazil, Mexico and Indonesia. Supporting and intensifying ongoing land reform efforts, such as social forestry and the One Map initiative in Indonesia, is essential for effective land-use policies.

• The negative environmental externalities associated with land-use remain largely un- or under-priced across the case study countries. For example, environmentally related taxes are under-utilised in the land-use nexus when compared other economic instruments (such as subsidies). Greater application of taxes to price environmentally-damaging practices, such as pollution from agrochemical inputs (e.g. fertilisers and pesticides), could enhance the effectiveness of existing regulatory approaches, by providing a price signal to reduce environmentally damaging activity.

• Payments for ecosystem service programmes and agri-environment schemes do compensate land owners for ensuring the provision of certain services (generally water, carbon and biodiversity) in certain regions.17 But the support is less than that available to support food production and the programmes are often too limited in geographic scope (with the notable exception of Mexico) to improve the sustainability of national land-use systems as a whole, as participation is limited. The balance of support for the delivery of different ecosystem services from land (e.g. food, carbon, water, habitat provision) should ensure that the growth in food production – necessary to meet growing global demand – does not compromise the delivery of other services. Paying land-managers for each ecosystem service from the same area of land (also called ‘payment stacking’) is a promising approach for improving the incentives available for sustainable management.

• In contrast, government support for agricultural production is larger than support for other land uses (with the exception of New Zealand). Despite recent progress, potentially market-distorting support which can lead to unsustainable practices and encourage the expansion of agriculture, although highly variable, is still prevalent across the case study countries. In all the case study countries (bar New Zealand), more effort is needed to reform potentially market-distorting and environmentally-harmful agricultural support. In addition, biofuel production subsidies and biofuel blending mandates can lead to increased emissions from land-use change, ecosystem degradation and put pressure on food production (particularly for 1^st generation biofuels), however these impacts are context- and crop-specific.

• Although the SDGs include targets relating to reducing food loss and waste, quantitative, national-level targets for reducing food loss and waste are lacking (with the exception of France). There is a clear economic and environmental rationale for action to address food loss and waste, with many potential synergies across other key national policy agendas, such as climate change and biodiversity. Better and more consistent food loss and waste monitoring at national and sub-national levels is recommended, as without these systems the setting of appropriate targets and monitoring progress is not possible.

• International trade in agricultural and forestry products facilitates the import and export of products generating negative externalities not addressed by domestic policies (e.g. climate mitigation and biodiversity protection). Better assessment of the land-use impacts of trade and supply chains and the disclosure of relevant information are key for effective and coherent polices. Improved assessment of ecosystem services and their integration into cost-benefit analysis and more broad application of life cycle assessment (LCA) approaches are important tools for achieving this.

• A number of policy instruments are available to manage interactions between trade and land use. Product-specific mechanisms, including product-specific trade agreements and memoranda of understanding, can be effective instruments, especially if they cover traded products with major land-use implications and include environmental provisions that are strictly enforced. For example, the EU has concluded voluntary partnership agreements (VPAs) for trade in forest products with a number of countries, one of which is currently in place between EU and Indonesia. Policy measures promoting and facilitating responsible business conduct (RBC) can be an effective tool for improved land-use outcomes, too.

• The range of policy approaches utilised in the nexus is broad and their interactions with each other and wider governance systems are complex. Managing the land-use nexus requires a broad policy toolkit as the dynamic, complex and contextual nature of land-use systems mean the effective policy mix in each country or landscape is likely to vary. Successfully balancing outcomes within this policy nexus requires consistent application and maintenance of many different elements, such as monitoring systems, enforcement agencies, stakeholder engagement processes, otherwise policies will cease to function effectively and previous environmental gains can be reversed. For example, increases in deforestation in the Brazilian Amazon in 2018 highlight how changing domestic political circumstances can undermine previously effective policies.