Yahoo News 30 Mar 09;
BONN (AFP) – Including forest protection measures in carbon markets would cause carbon prices to crash, and could undo efforts to rein in global warming, according to a Greenpeace report released Monday.
Prices in a future carbon market would plummet by 75 percent, making it cheaper for industries in rich nations to buy deforestation offsets than reduce their carbon output at home, a study commissioned by the green group found.
It would also starve developing countries of investments for clean and renewable technologies, said the report, released on the margins of climate talks under the UN Framework Convention for Climate Change.
"Cheap forest credits sound attractive, but a closer examination shows they are a dangerous option that won't save the forests or stop runaway climate change," said Roman Czebiniak, a forest expert at Greenpeace International.
Negotiators from 175 nations have gathered here to hammer out a climate treaty -- slated for completion by year's end -- to replace the Kyoto Protocol, which runs out in 2012.
Finding a way to reduce emissions from deforestation and forest degradation in developing countries -- an effort known as REDD -- has emerged as a key element in the negotiations.
The continuing destruction of tropical forests accounts for 20 percent of all greenhouse gas emissions, and it will be virtually impossible to curb global warming unless forests are protected, scientists say.
Brazil and Indonesia each account for about one third of forest-related emissions, making them the world's top carbon polluters after China and the United States.
"There is broad consensus now that the post-2012 agreement will include some sort of incentives for tropical countries to reduce their deforestation," said Steve Schwartzman, a forests expert at Environmental Defense, an advocacy group based in Washington D.C.
But sharp differences remain on whether these aims are best achieved primarily through market mechanisms, including a future global carbon market, or various forms of public funding and grants.
"Forests are the wild card in these negotiations -- it could be used to bring us closer to our goals, or to water them down," said Czebiniak.
Currently, the largest functioning carbon market operates within the European Union. The market has proven fragile, and has been hit hard by the economic crisis and the drop in oil prices.
The Greenpeace report argues that flooding carbon markets with offsets would devalue carbon even further, and make it too easy for the industrialised world to avoid making necessary energy reductions.
"Of the many options for forest financing currently on the table, this one ranks as the worst," said Czebiniak.
Forests Could Undermine Carbon Market - Greenpeace
Alister Doyle, PlanetArk 31 Mar 09;
BONN - Carbon market prices could tumble by 75 percent if credits for safeguarding forests are added to markets for industrial emissions, environmental group Greenpeace said on Monday.
A report issued on the sidelines of UN talks in Bonn working on a climate treaty said that a flood of forest carbon credits could also slow the fight against global warming and divert billions of dollars from investments in clean technology.
"Cheap forest credits sound attractive but a closer examination shows they are a dangerous option," Roman Czebiniak, Greenpeace International political adviser on forests, said of estimates by Kea 3 economic modelling group in New Zealand.
About 175 nations are meeting in Bonn from March 29-April 8 to discuss measures for fighting global warming. Among them are ways to slow tropical deforestation, which accounts for a fifth of all greenhouse gas emissions from human activities.
Trees soak up carbon dioxide, the main greenhouse gas, as they grow and release it when they are burnt or rot. Placing a price on intact trees could help save forests from the Amazon to the Congo basin from logging and land clearance by farmers.
"Including forest protection measures in carbon markets would crash the price of carbon by up to 75 percent and derail global efforts to tackle global warming," Greenpeace said.
The report projected the 75 percent fall in prices, to 3.9 euros (US$5.16) per tonne by 2020 from a baseline of 16.05 used in the report, under current national policies for limiting emissions.
CLEAN ENERGY INVESTMENTS
"Countries like China, India and Brazil could lose tens of billions of dollars for clean energy investments if forest protection measures are included in an unrestricted carbon market," it added.
There is so far no agreement on how to put a price on forest carbon under a new treaty. Suggestions range from carbon trading to new taxes in developed nations to raise cash. Governments aim to agree a new UN climate treaty in Copenhagen in December.
A European Commission report last year also said the European Union should not let industry meet its climate goals by funding forest conservation in tropical nations before 2020.
"Allowing companies to buy avoided deforestation credits would result in serious imbalances between supply and demand," it said. It said deforestation emissions were three times bigger than emissions regulated by the EU emissions trading scheme.
And New Carbon Finance analyst Aimie Parpia estimated in a report earlier this month that unlimited use of forestry could cut carbon offset prices by 40 percent by 2020.
Greenpeace's own forest proposal is to allow industrialised countries to meet a part of their emissions reduction goals by buying cheaper "tropical deforestation units" as an addition to deep cuts in domestic emissions.
These units, however, would not be tradeable on markets for industrial emissions.
(Additional reporting by Gerard Wynn and Michael Szabo in London)
(Editing by James Jukwey)
