Rainforests worth $1.1 trillion for carbon alone in Coalition nations

/ Rhett A. Butler

If a coalition of developing countries has its way, there could soon be new forests sprouting up in tropical regions. The group of ten countries, led by Papua New Guinea, has proposed that wealthy countries pay them to preserve their rainforests. The Coalition for Rainforest Nations argues that all countries should pay for the benefits -- from carbon sequestration to watershed protection -- that tropical rainforests provide.




Rainforests worth $1.1 trillion for carbon alone in “Coalition” nations

Rainforests worth $1.1 trillion for carbon alone in “Coalition” nations

Rhett A. Butler, mongabay.com

November 29, 2005 [2006 update]

If a coalition of developing countries has its way, there could soon be new forests sprouting up in tropical regions. The group of ten countries, led by Papua New Guinea, has proposed that wealthy countries pay them to preserve their rainforests. The Coalition for Rainforest Nations argues that all countries should pay for the benefits — from carbon sequestration to watershed protection — that tropical rainforests provide.

Forests play an important role in the carbon cycle. As forests grow, they absorb atmospheric carbon into their tissues via photosynthesis. The opposite occurs when they are cut, thinned and degraded carbon is released into the atmosphere, contributing to global warming. The UN estimates that 20-25 percent of greenhouse gas emissions come from the destruction and degradation of forests, an amount similar to the volume produced each year by the United States. The Coalition will argue that developing countries should be paid for the amount of carbon locked up by their forests.

Focusing specifically on the value of carbon sequestration the coalition could be talking a lot of money. At the current going rate of $20 for a one-ton unit of carbon dioxide, the forests of Bolivia, Central African Republic, Chile, Congo, Costa Rica, Democratic Republic of Congo, the Dominican Republic, Guatemala, Nicaragua, and Papua New Guinea are worth around $1.1 trillion for their carbon sequestration alone. Of course the forests offer a great deal more value through the other, less measurable services they provide including fisheries protection, biodiversity preservation, erosion and flood control, recreation and tourism value, harvest of renewable products, and water services.



Stored carbon value for Coalition for Rainforest Nations

All figures come from the latest Food and Agriculture Organization of the United Nations data.

Country Total
forest area
2005
Change
in forest
00-05*
Primary
forest cover
2005
Change in
primary forest
00-05
Total
forest carbon
2005*
Value of
carbon*
1000 ha land area percent 1000 ha percent M tons $million
Bolivia 58,740 54.2% -2.2% 29,360 -2.3% 5,877 $117,540
Central African Rep. 22,755 36.5% -0.6% N/A 3,008 $60,160
Chile 16,121 21.5% -0.4% 4,142 -0.1% 3,232 $64,640
Congo 22,471 65.8% 0.6% 7,464 -0.4% 5,181 $103,620
Costa Rica 2,391 46.8% 1.8% 180 0.0% 214 $4,280
D.R. Congo 133,610 58.9% -1.2% N/A 32,152 $643,040
Dominican Rep. 1,376 28.4% 0.0% N/A 94 $1,880
Guatemala 3,938 36.3% -6.4% 1,957 -6.4% 572 $11,440
Nicaragua 5,189 42.7% -6.3% 1,849 N/A 795 $15,900
Papua New Guinea 29,437 65.0% -2.3% 25,211 -4.7% 4,710 $94,200
Total 296,028 -1.4% 55,835 $1,116,700

* Total change in forest, 00-05 — negative numbers represent deforestation, positive numbers reflect the growth of plantations and secondary forests.

* Total forest carbon, 2005 — Includes carbon stored in above-ground biomass, below-ground biomass, dead wood, leaf litter, and soils of forests.

* Value of carbon — Figures assume a rate of $20 per ton

For comparison, a recent study by the Pembina Institute for the Canadian Boreal Initiative found that carbon stored in Canada’s boreal forests and peatlands is worth $3.7 trillion, while the annual value of ecosystem services like water filtration, pest-control services, and carbon storage at $93 billion — roughly 2.5 times greater than the net market value of forestry, hydroelectric, mining, and oil and gas extraction in Canada’s Boreal region. The values can be expected to be similar in tropical countries.


Carbon trading

The carbon trading marketplace is expected to grow from a $450 million marketplace today to a $23 billion one by 2010. Currently, most transactions occur on the European Climate Exchange, which so far this year has traded 265 million tons of carbon worth $6.6 billion in credit contracts, for an average of $24.91 per carbon credit.

While developing countries will not be asking for or receiving $1.1 trillion, they will present a strong argument at this week’s United Nations summit on climate change in Montreal. Burdened by poverty, the Coalition nations say they cannot be expected to forfeit income from economic activities that result in deforestation, especially while other countries benefit from forest services.

Deforestation of tropical rainforests has a global impact through species extinction, the loss of important ecosystem services and renewable resources, and the reduction of carbon sinks. Recently a study by NASA found a direct impact that tropical deforestation has on the economies of the United States and Europe. Research shows that deforestation in the Amazon region of South America influences rainfall from Mexico to Texas and in the Gulf of Mexico, while forest loss in Central Africa affects precipitation patterns in the upper and lower U.S Midwest. Similarly, deforestation in Southeast Asia was found to influence rainfall in China and the Balkan Peninsula.



Most “tropical rainforest”, 2005. These rankings are estimates.

    1 Brazil
    2 Congo, Dem Rep
    3 Peru
    4 Indonesia
    5 Colombia
    6 Papua New Guinea
    7 Bolivia
    8 Mexico
    9 Suriname
    10 Guyana
    11 Madagascar
    12 French Guiana
    13 Congo
    14 Ecuador
    15 Thailand
    16 Malaysia
    17 Panama
    18 Guatemala
    19 Nicaragua
    20 Honduras
    21 Laos
    22 Philippines
    23 Côte d’Ivoire
    24 Belize
    25 Kenya

Armed with the knowledge that ecosystems in their own backyards are critical to the global economy, Coalition Nations appear to be in a good position to ask for money to conserve their rainforests. Amid growing consensus that climate change is indeed a real threat, increasing concern over catastrophic environmental events like the devastating 2005 Gulf hurricane seasons, and renewed interest in eradicating poverty, there will be considerable political pressure for wealthy countries to sit down at the bargaining table to hammer out some form of agreement that would protect rainforests in exchange for cash.

Should an agreement be reached it is likely that it would include provisions for the restoration of degraded forests and the development of plantations on deforested lands. Tropical countries would then have an incentive to begin replanting the forests that have so rapidly been lost due to logging, commercial and subsistence agriculture, and other forms of development over the past 50 years. Already, private companies are positioning themselves to cash in on the potential windfall. Several firms, including Carbon Capital in London, are forming trading partnerships with developing countries, while others are establishing plantations in tropics.

The nascent carbon trading market could prove to be a model for financing large-scale conservation while simultaneously providing profit opportunities for private firms. While corporations pursuing commercial interests could end up doing a lot of good for the global environment, poor countries could have a new way to capitalize on their natural assets without destroying them.



Sample comparison of carbon value versus timber value for selected countries

All figures are derived from the latest Food and Agriculture Organization of the United Nations data.

Industrial roundwood, fuelwood,
and non-wood forest products
Total forest carbon* Value of Carbon* Annual value 50-year value
Country megatons $millions $millions $millions
Bhutan 676 13,520 6.43 103
Bolivia 5877 117,540 49.54 790
Brazil 104638 2,092,760 4,032.17 64,339
Brunei Darussalam 50 1,000 3.16 50
Burkina Faso 352 7,040 94.03 1,500
Cambodia 1426 28,520 21.59 345
Congo 5181 103,620 242.64 3,872
Costa Rica 214 4,280 122.12 1,949
Côte d’Ivoire 2673 53,460 298.58 4,764
Ghana 566 11,320 31.27 499
Guatemala 572 11,440 196.82 3,141
Guinea-Bissau 80 1,600 17.00 271
Indonesia 6725 134,500 2,159.68 34,461
Laos 1685 33,700 61.16 976
Madagascar 3321 66,420 75.34 1,202
Malaysia 4036 80,720 2,150.00 34,306
Myanmar 3584 71,680 901.66 14,387
Nicaragua 795 15,900 43.28 691
Nigeria 1597 31,940 2,002.72 31,956
Panama 883 17,660 6.59 105
Philippines 1093 21,860 60.99 973
Rwanda 69 1,380 35.30 563
Senegal 385 7,700 20.12 321
Sudan 1698 33,960 1,153.80 18,411
Suriname 6318 126,360 15.06 240
Viet Nam 1953 39,060 458.87 7,322

*Total forest carbon, 2005 — Includes carbon stored in above-ground biomass, below-ground biomass, dead wood, leaf litter, and soils of forests.

*Value of carbon — Figures assume a rate of $20 per ton

*Annual value, 50-years — Calculated using assuming current rates of production and prices with a annual discount rate of 6% over a 50-year period.


Global tropical rainforest distribution


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Developing countries: pay us to save rainforests

At this week’s United Nations summit on climate change in Montreal a coalition of tropical developing countries plans to propose that wealthy countries pay them to preserve their rainforests. The group of 10 countries, led by Papua New Guinea and Costa Rica, will argue that they should be compensated for the services rainforests provide the rest of the world.

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More figures, charts, and statistics are available at World deforestation rates and forest cover statistics, 00-05

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