Tropical Forest Aid Planned by Indonesia, Brazil, California

Adam Satariano, Bloomberg 19 Nov 08;

California pledged financial aid for efforts to curb logging in Indonesia and Brazil, aiming to slow deforestation that scientists say adds to global warming.

State officials and governors of the two rainforest nations reached a preliminary agreement that become a part of California's 2006 climate-change law.

Polluting companies in the state would get credit for meeting emissions-reductions rules by investing in forest-conservation efforts, Governor Arnold Schwarzenegger and officials from the two nations said at a climate-change conference yesterday in Beverly Hills, California.

Trees absorb carbon dioxide, the main greenhouse gas, and cutting or burning them down around the world fosters more heat- trapping emissions than does transportation, the United Nations Intergovernmental Panel on Climate Change has said. The agreement pioneers using forest preservation in developing nations to stem global warming, conservationists said at the conference.

``This is the first time policymakers are creating concrete rules and incentives to protect the world's remaining tropical forests,'' said Toby Janson-Smith, director of the forest carbon markets program for Conservation International, in an interview.

California's climate-change law, set to take effect Jan. 1, 2012, calls for the state to slash carbon-dioxide emissions from industry, vehicles and other sources by 2020 back to the 1990 level. Adding forest preservation to the law's regulations, which are yet to be written, may for example allow utilities such as PG&E Corp. or the Los Angeles Department of Water & Power to help meet their pollution caps by investing in anti-logging programs.

`Sending a Message'

Indonesia and Brazil respectively are the world's third- and fourth-largest emitters of greenhouse gases after China and the U.S., the World Bank has said. Deforestation contributes about 70 percent to 90 percent of the two developing nations' emissions, the environmental group Conservation International says. One- fifth of greenhouse-gas emissions worldwide stem from deforestation.

A signing ceremony for the deal was held yesterday evening at the conclusion of the first day of the Governors' Global Climate Summit that Schwarzenegger is hosting at the Beverly Hilton hotel.

Wisconsin Governor Jim Doyle and Illinois Governor Rod Blagojevich also signed the ``declaration of understanding,'' along with leaders from the Indonesia provinces of Papua and Aceh and the Brazilian states of Amazonas, Para, Amapa and Mato Grosso. The six regions account for 60 percent of the world's remaining tropical forests, Schwarzenegger said.

The deal is ``sending a strong message that this issue should be front and center during negotiations for the next global agreement on climate change,'' Schwarzenegger said in a statement.

Challenge to Verify

To be accepted, the anti-logging investment projects will have to meet California standards that regulators will draft, according to the deal. The state's climate-change program already has guidelines for forest management projects within its borders.

The biggest challenges dealing with Brazilian and Indonesian state governments are finding dependable methods to measure, verify and accurately report the levels of greenhouse gases that are saved through the investments, said Michele de Nevers, a senior manager at the World Bank's environment department, in an interview.

``These are governments that have weak institutions to begin with, and this will put those institutions to the test,'' Nevers said in an interview.

`Add Value to Forest'

Amazonas Governor Eduardo Braga said poverty typically drives communities to sell forests to timber companies or convert it for farmland. Anti-logging investments through California's climate change program can provide a good alternative, he said.

``The only way to preserve the rainforests is adding economic value to the standing forest,'' Braga said.

The agreement signed by California, Wisconsin and Illinois may eventually allow investors in the Brazilian and Indonesian forest-preservation projects to earn credits that can be used in emerging regional U.S. emissions-trading programs.

California is devising a so-called cap-and-trade program as part of the Western Climate Initiative along with six other states and four Canadian provinces.

Wisconsin and Illinois are part of the Midwestern Regional Greenhouse Gas Accord. Ten Northeastern states have created a trading system opened earlier this year known as the Regional Greenhouse Gas Initiative.

United Nations negotiators in Bali, Indonesia, last year called for the next global climate-change treaty to reward developing nations for preserving forests. The existing accord, the Kyoto Protocol, expires in 2012 and didn't include deforestation credits. The next rounds of talks are scheduled to be held Dec. 1-12 in Poznan, Poland.

Janson-Smith said remote sensor imagery, satellite photos and on-the-ground verification are methods that can be used to ensure the forests aren't being burned down.

``Everyone recognizes the importance of including tropical forests in future climate agreements, but this is the first time we have concrete action towards that end,'' he said.