UN climate talks: Save the forests -- but how?

Marlowe Hood Yahoo News 31 Mar 09;

BONN (AFP) – Deforestation, one of the main drivers of global warming, has barged its way to the heart of UN climate talks, which resumed in Bonn this week.

But which makes the better incentive for saving the carbon-absorbing tropical woodlands: market mechanisms or public funding?

This question has split nations, divided green groups and tossed in yet another factor to bedevil efforts to agree a pact by year's end for tackling climate change.

Reducing emissions from deforestation and forest degradation -- an effort known as REDD -- emerged last year as a key element in the UN Framework Convention on Climate Change (UNFCCC) negotiations.

It owes its rise to scientists' warnings that destruction of tropical forests cannot be ignored by policymakers, for it now accounts for a fifth of all greenhouse-gas emissions.

Logging and ground clearance are especially concentrated in Brazil and Indonesia. They 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 of Environmental Defense, an advocacy group based in Washington.

"The issue is, what kind of mechanism? And that is where the polemics start," he told AFP.

The United States and a coalition of around 20 small rain-forest nations, led by Papua New Guinea and Costa Rica, are demanding that deforestation "credits" be added to carbon markets, say sources.

Under carbon trading -- an innovation of the Kyoto Protocol that will be superseded by the treaty -- companies in industrialised nations can offset obligations to slash CO2 emissions by funding certified carbon-reduction projects in the developing world.

For this to work properly, the price of carbon has to be high enough to create a juicy enough carrot for investing in clean and renewable technologies.

But many green groups, along with the European Union (EU), fear that an influx of deforestation offsets would cause carbon prices to plummet.

A study commissioned by Greenpeace International, unveiled in Bonn on Tuesday, predicted that introducing forest credits would depress carbon prices by 75 percent, starving developing countries of clean investment.

"Of the many options for forest financing currently on the table, this one ranks as the worst," Greenpeace's Roman Czebiniak told AFP.

"Forests are the wild card in these negotiations -- it could be used to bring us closer to our goals, or to water them down."

Schwartzman couldn't disagree more. "We think it's a terrible idea to preclude the option of creating positive economic value for standing forests," he said.

Protecting forests through other methods is bound to fail, he argued.

Direct grants or carbon levies in rich nations would either fail to generate enough cash or would be vulnerable to mismanagement, poor accountability or corruption.

"There is now a 40-year history of public sector international development assistance in the forestry sector -- in Indonesia, in the Amazon -- which has been entirely unsuccessful in reducing deforestation," he said.

By contrast, Schwartzman contended, a company facing a legal obligation to comply with emission caps has a strong incentive to be sure the carbon credit it is buying corresponds to reality.

For Kim Carstensen, leader of the WWF's global climate initiative, both market and public funding mechanisms are necessary, but not all at once.

"The initial stages need to be funded by public mechanisms, not tradable credits. Markets are not a good option now because in the near term we don't see any credible REDD units coming into existence," he told AFP.

Only five years ago, Brazil opposed any discussion of deforestation at the UN forum.

But in December, it announced a national target to reduce its deforestation by 71 percent by 2017, using a 10-year average up to 2006 as a benchmark.

It has opened a fund to receive international compensation, and has recently received the first 110 million of a one billion dollar pledge -- contingent of continuing progress in forest protection -- from Norway.

The key, argues Schwartzman, is that both donor and recipient nations have to have national emissions caps in place, otherwise they will simply shift the carbon pollution from one location to another.