World launches talks on forest payoffs

Michael Casey, Associated Press Yahoo News 4 Feb 08;

For decades, a flood of aid and an army of conservationists couldn't save Indonesia's rain forests from illegal loggers, land-hungry peasants and the spread of giant plantations. Now the world is looking at a simpler approach: up-front cash.

Whether it was arming forest police or backing schemes to certify legal logs, no tactic could silence the chain saws or douse the intentional fires that each day destroy 20 more square miles of Indonesia's rain forests, and an estimated 110 square miles elsewhere in the world's tropics.

The problem was pure economics: Neither local authorities nor the rural poor, in Indonesia and elsewhere, have a material incentive to keep their forests intact.

That could now change because of a decision at December's U.N. climate conference in Bali, Indonesia, to negotiate a deal, as part of the next international climate agreement, under which countries would be rewarded for reducing their galloping rates of deforestation, a big contributor to global warming.

The cash might come directly from a fund financed by richer northern nations, or through "carbon credits" granted per unit of forest saved. The credits could be traded on the world carbon market, where a northern industry can buy such allowances to help meet its own required reductions in emissions of global-warming gases.

Indonesia and other tropical countries backing the "avoided deforestation" concept hope this carbon price will outpace what landowners could get from logging the forests or clearing them for palm oil, rubber, soybean or other plantations.

"For the next decade, the international community and countries that negotiate this convention have tremendous potential, tremendous power in their hands," said Benoit Bosquet, head of a World Bank project to prepare poorer countries to take part in the new initiative, known as REDD, for Reducing Emissions from Deforestation and Degradation.

"There will be a lot of money going in there," he said. "You will see actors currently converting forest to plantations and cattle ranches saying, 'Wait a minute. If I get more money to preserve my forest than to produce beef, then of course I will keep my forest standing.'"

But turning REDD into reality is far from guaranteed, given competing interests among tropical countries, the world's growing demand for plantation products, and its poor track record in controlling deforestation.

The tangled question of forests has dogged climate negotiations for years.

Deforestation was left out of the 1997 Kyoto Protocol because of concerns that tradable credits for saving forests would take pressure off northern nations to reduce their own industries' greenhouse-gas emissions as required under that accord. But scientific uncertainty also muddies the picture.

The carbon dioxide spewed into the atmosphere by the burning and rotting of deforestation is estimated to account for 20 percent of manmade greenhouse-gas emissions. But from Brazil's mahogany trees to Papua New Guinea's thick-trunked kauri, how much carbon is stored in which of the world's forests? How much carbon dioxide is absorbed by which trees?

How will the world fix baselines, judging what a country's "usual" deforestation rate is, in order to gauge rewards for a lower rate? And who's to verify the numbers?

A technical body under the U.N. climate treaty is collecting proposals from governments on how to address such issues. It's the first step toward negotiating a deal by 2009, as part of an overall agreement on deeper emissions cuts to succeed Kyoto when it expires in 2012.

Beyond the technical, however, political disputes will complicate the U.N. talks.

The focus may be on today's deforestation, but India, Costa Rica and others believe they should get credit for having been "good" — protecting their forests over the years. Some rain-forest governments, meanwhile, want commercial tree plantations counted in the mix, a move environmentalists oppose.

Some fear "avoided deforestation" credits flooding the market will drive down the carbon price. That's why REDD's advocates want the next round of emissions reductions to cut much deeper than Kyoto, raising demand for credits.

Brazil, whose energy projects already make it a big player in carbon credits, has opposed extending that market to trees, favoring instead a global fund to compensate rain-forest nations directly for income lost when land sits undeveloped.

The British government's Stern Review of climate economics argued that targeting deforestation is among the cheapest ways to reduce greenhouses gases. It estimated halting 70 percent of rain-forest destruction would cost $5 billion a year in compensation.

Some rain-forest nations, on the other hand, calculate REDD could generate as much as $23 billion a year.

Whatever the amount, into whose pockets would these credits or cash flow?

Over the years, in Indonesia and elsewhere, many initiatives — from arresting illegal loggers to promoting sustainable logging operations — have failed because of widespread corruption. Bribed officials look the other way. Politically connected elites often reap the profits from deforestation. Such problems remain.

Few governments have the means or money to monitor their deforestation. Land-rights disputes leave ownership of much forested land in question. Some environmentalists fear governments might push indigenous people out of newly protected forests — as they did when many national parks were created.

"We need to have clear property rights so we know who owns these forests that we're paying not to convert," said Frances Seymour, head of the Center for International Forestry Research in Indonesia. "We need mechanisms to get (the funds) down to the local level so they are not just skimmed off at the top."

Powerful interests have much at stake. European money is bringing pressure on Malaysia and Indonesia, for example, to clear land to produce biofuels, and Brazil faces demands from China to plant soybean to feed their growing middle class.

"It doesn't stop at national borders," said the World Bank's Bosquet. "What Brazil is doing is supplying more beef and soy to the outside world. You don't control that within Brazil."

The challenge in the Amazon became clear again in late January, when Brazil's government met in emergency session to deal with a sudden burst of deforestation after three years of decline.

Two months earlier, visiting the Amazon, U.N. Secretary-General Ban Ki-moon learned how dying rain forests will feed global warming, and he went on to Bali to urge the world's nations to act. "It is time to wake up," he said.

Cutting through the political tangle to produce the grand plan called REDD — money for doing nothing to forests — will itself prove a challenge.

"There is a hell of a lot to negotiate and many controversial issues," said Christoph Thies, a Greenpeace forest campaigner who observed the Bali talks. "It's a long and difficult road ahead. To be honest, there is quite a good chance of failure."