The Forest Bond Initiative is guided by the four economic principles:
- Profitability
- Inclusiveness
- Cost-effectiveness
- Rights and Freedom
PROFITABILITY: The Forest Bond Initiative offers a solution to deforestation in Thailand through two main mechanisms: raising funds by issuing bonds and establishing commercial forest plantations. The initiative aims to ensure that profits from forest plantations are fairly distributed among all stakeholders, namely forest keepers, loggers, wood industries, savers, and investors. This fair distribution of profitability will deter illegal deforestation and protect the forests. Ultimately, the Forest Bond Initiative will help Thailand restore ecological balance and achieve long-term sustainability.
INCLUSIVENESS: In Thailand, the government has been responsible for forest management for many years. This approach has proven ineffective, as shown by widespread encroachment on forests and the government’s inability to meet the national target for forest coverage. The Forest Bond Initiative suggests a different way to manage forests, proposing that they are best managed through greater public participation. This would involve the public owning forests through holding forest bonds, earning income from forest management, having business interests in the timber industry, or earning income from carbon credits. This increased public involvement, known as “inclusiveness,” will protect the forest from illegal encroachment and corruption.
COST-EFFECTIVENESS: To combat global warming and maintain the temperature within the 1.5-degree target, countries around the world are working towards becoming carbon neutral and achieving net zero emissions. To achieve this, countries must carefully consider their options for reducing carbon emissions. Reforestation is the most cost-effective method of carbon sequestration and acts as a carbon sink. It helps save costs and accelerates the process of decarbonization. Additionally, reforestation will also yield numerous co-benefits, such as climate regulation, water retention, biodiversity, non-timber products, and opportunities for ecotourism.
RIGHTS AND FREEDOM: For several decades, Thailand has implemented strict laws and regulations to protect its forests. However, it has become evident that these measures are not effectively preventing illegal forest encroachment. The Forest Bond Initiative proposes a new approach by shifting forest governance from state control to a free market system. This shift aims to reduce the costs associated with complying with ineffective forest laws and establish a free-market mechanism. This mechanism would enable profitable forest plantations to promote sustainability. The concept is that by allowing people to benefit from forest plantations, the free market will act as a form of forest governance, protecting the forest from illegal encroachment and providing benefits to society at large.
