Welfare and Forests: Lessons from Assessments of the FIP Co-funded Projects in Lao PDR and Mexico
Forests provide subsistence goods and services to 1.3 billion people, most of them living below the extreme poverty line. Forests can contribute to poverty reduction if the benefits from sustainable management of timber and non-timber forest products and the provision of forest ecosystem services can be reaped by the poor. Forest resources—products and the land—contribute to households’ livelihoods. Forest resources provide numerous goods that allow households to fulfill their consumption needs and to build their shelter. Using Poverty Environment Network (PEN) comparable household survey data on income and consumption products,the report estimated that around 20 percent of household income comes from forests through extraction, processing forest products, wage activities, and other income, with households in the lowest income quintiles having a higher share of forest income.
The Climate Investment Funds (CIF) Forest Investment Program (FIP) aims to achieve the triple win of being good for forests, for development, and for climate, through the provision of funding to developing countries for readiness reforms and public and private investments, identified through national REDD+ readiness or equivalent strategies. Per the 2019 FIP Operations and Results Report, as of December 2018, 1,268,512 people had livelihood co-benefits in eight countries. However, there is little evidence that shows in detail how forestry projects funded by FIP have improved livelihoods.
The objective of this report, commissioned by the CIF Evaluation and Learning (E&L) Initiative, is to explain through which pathways forestry projects can contribute to welfare. Each case study explored (a) the importance of forest products to households’ livelihoods; (b) households’ and communities’ participation in the project; and (c) channels of welfare changes for households and communities. Depending on the project design, welfare was analyzed at the community and household levels, looking at an assets index, access to services, and food security, as well as livelihood diversification, human capital, governance, and natural capital (forest quality).
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