Forests and Carbon Trading

Forests and Carbon Trading

11 February 2008

published by CNN

Global — Cutting down trees is pretty much one of the worst things you can do when it comes to climate change. Deforestation, by varying accounts, contributes anywhere from 20 percent to 30 percent of all carbon dioxide (C02) emissions — around 1.6 billion tons.

When you cut down trees you get a double whammy. First of all, they are not called the lungs of the Earth for nothing — we clearly need trees so that we and other animals can breathe. Trees also are in the front line against pollution, breathing in millions of tons of greenhouse gases a year that they store in their trunks.

According to the United Nations’ Environmental Programme (UNEP), trees store a staggering 283 gigatons of carbon in their biomass. When that is combined with the carbon found in the surrounding deadwood and soil, the result is 50 percent more carbon than is currently found in the atmosphere. When those trees are felled or burned — trees that are comprised of 50 percent carbon — that carbon is then released into the atmosphere.

According to the Council of Foreign Relations, the 2007 forest fires in the United States — a relatively minor incident on a global scale — contributed as much as 6 percent of North America’s total greenhouse gas emissions that year.

But burning trees isn’t always a phenomena directly controlled by humans. Many believe that global warming is exacerbating the rate of naturally occurring forest fires around the world.

“Natural variation suggests the Amazon should have serious drought-led fires at 400- to 700-year intervals, but today, they are happening every five to 15 years,” the Independent recently reported. “It’s a vicious cycle: cutting back the forests causes more global warming, which then burns up more forests, which causes more global warming, which burns up the forests even more, and on and on.”

There are currently around 10 billion acres of forest in the world, covering 30 percent of the Earth’s land area. The world’s forest cover is at least one-third less of the size it was before the earliest days of agriculture.

Nations consider ‘carbon trading’

According to the U.N.’s Food and Agricultural Organisation (FAO), around 32  million acres of forests disappear every year, most of it in the tropics. The main reason for forest clearing hasn’t changed in 10,000 years. As much as 80 percent of all deforestation is done because of the need to clear land for agriculture. The WWF is now warning that if nothing is done 60 percent of the Amazon rain forest could disappear by 2030.

A recent UK study on the environment, the Stern Report, reached the conclusion that many others are coming to: If the world wants to curb emissions cheaply and quickly then it has to simply stop cutting down so many trees.

One way to do this is to make it more economically visble for the countries hosting these rain forests to preserve them.

Carbon trading was introduced as part of the Kyoto Protocol’s goal to reduce certain industrial nations’ greenhouse gas emissions to below 1990 levels by 2012. The idea was that countries whose emissions fall under the emissions cap — the permitted level of carbon dioxide equivalent emissions per year — could then sell those carbon credits to countries who are not able to meet their own caps.

The caps are supposed to fall over time with the price of the carbon credits, therefore rising due to scarcity levels. Proponents of carbon trading envisage a new global investment market based on emissions trading, where companies and countries have incentives to invest in developing world projects due to the highly coveted carbon credits they receive for doing so.

With regard to forests, the idea is basically they should be worth more than they are. And countries (generally poor ones) who have the rain forests should be compensated for protecting them, particularly when they are under so much economic pressure to open them up to mining companies. Indonesia and Brazil now find themselves in the top four of the world’s top polluting nations as a result (around 80 percent of Brazil’s greenhouse gas emissions tally comes from deforestation).

The economic argument goes that you make it more financially appealing to countries not to allow their forests to be cut down.

“It’s insanity that a single service company, Google, has a market value of $200 billion, while all the services of all of the world’s great forests are valued at nothing,” Hylton Murray-Philipson, head of Rainforest Concern, recently told the Independent newspaper.

On a per ton of carbon basis, countries such as Indonesia can earn between $1 and $5 to destroy the trees, according to a recent article in the Guardian — or they can earn around $30 (the market price of carbon credits in Europe at the time the article was written) for protecting them. Equally, a 2006 study on deforestation by the British government said that without action on this issue, each ton emitted could cause $85 of damage to the global economy.

Can interests of both rich, poor be served?

The real concern, however, is that carbon trading only really serves rich nations; the issue being that carbon trading could put the vital resources of the developing world in the hands of nations that can use carbon credits as a way to counter, or delay, reductions of their own greenhouse gas emissions at the same time.

At the U.N. climate change conference held last December in Bali, Indonesia, the World Bank launched its Forest Carbon Partnership Facility (FCPF), a fund financed by the UK, Germany, the Netherlands, Australia, Japan, France, Switzerland, Denmark and Finland (with The Nature Conservancy also chipping in).

The $160 million fund, the World Bank says, will be used to “support programs targeting the drivers of deforestation and develop concrete activities to reach out to poor people who depend on forests to improve their livelihoods. It will also help developing countries build the technical, regulatory, and sustainable forestry capacity to reduce emissions from deforestation and degradation.”

There has already been some confusion over the exact role the World Bank is trying to play in all of this. The World Bank says it wants to reduce global deforestation by 10 percent by 2010. But its critics claim the World Bank has traditionally been a proponent of deforestation.

There has also been concern over the impact of the forest carbon trading scheme on local forest communities that earn a living from the forests.

In the Democratic Republic of Congo (DRC) the World Bank is facing opposition from Pygmy groups and local communities which rely on the Congo basin, the world’s second-largest virgin rain forest, for their livelihoods, following a leaked report on the Bank’s activities there. The report came from the Bank’s own inspection panel, and it accused the Bank of encouraging commercial logging practices “based on exaggerated estimates of the export revenue to be reaped,” while discouraging sustainable forestry and conservation at the same time, reports the Inter Press Service.

The report has also found that the financial benefits of logging have gone to foreign firms, not local ones. The Pygmy groups and others are asking for these industrial logging practices to stop immediately and are asking for more assessments of the environmental impact of logging. (Logging was actually banned in DRC back in 2002; since then more than 100 new logging contracts have been issued).

Environmental groups have responded to the World Bank’s FCPF with extreme caution. A joint statement signed by more than 80 environmental organizations around the world in response to the the program queried its intentions, accusing the Bank of continuing “to undermine its own climate change mitigation efforts by persisting in funding fossil fuel industries on a global scale and enabling deforestation.”

They have also sounded their alarm about why the program has been pushed through too quickly with little consultation with affected communities.

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