Reducing deforestation rates 10% could generate $13B in carbon credits under REDD
Reducing deforestation rates 10% could generate $13B in carbon trading under REDD
mongabay.com
February 25, 2008
|
|
Cutting global deforestation rates 10 percent could generate up to $13.5 billion in carbon credits under a reducing emissions from deforestation (“REDD”) initiative approved at the U.N. climate talks in Bali this past December, estimate researchers writing in Philosophical Transactions of the Royal Society B. But the researchers caution there are still substantial obstacles to overcome before carbon-credits-for-rainforest-conservation becomes a reality.
Reviewing the potential for REDD, Johannes Ebeling and Mai Yasué warn that the climate change mitigation strategy will face numerous challenges, including overcoming difficulties with implementation and poor governance in tropical countries; ensuring permanence of emission reductions; addressing international “leakage”, whereby forest conservation in one country drives deforestation in another; establishing baselines for determining past rates of forest loss; and providing sufficient incentives to end deforestation. Ebeling and Yasué note that carbon markets alone will not save forests — the underlying drivers of deforestation and forest degradation must be addressed. Still the authors are hopeful that REDD “could help achieve substantial co-benefits for biodiversity conservation and human development.”
 Scenarios for potential global market value of RED credits at variable carbon prices and reductions in deforestation rates. Bars display global potential market value, and diagonal lines represent the contributions of Amazon countries. Carbon price €/tCO2: open bars, €5; grey bars, €15 and black bars, €30. |
They write that the effectiveness of REDD will hinge on “how successfully a market-based RED mechanism can contribute to climate change mitigation, conservation and development will strongly depend on accompanying measures and carefully designed incentive structures involving governments, business, as well as the conservation and development communities.”
Given a scenario, Ebeling and Yasué estimate that REDD in the Amazon — which accounted for 26 percent of global deforestation and 46 percent of related global carbon emissions between 1990 and 2005 — could generate vast sums for forest conservation.
For a 10 percent reduction in the annual deforestation rate, Ebeling and Yasué calculate that Amazon forest countries could see $1-6.2 billion (€690m-4.2b) in carbon finance, depending on the price of CO2 credits (the authors use a range of €5-30 [$7.50-45] per ton of CO2). A 50 percent reduction could generate $5.2-31 billion (€3.5-20.7b) in annual finance. Globally the authors project a 50 percent reduction could yield $11.3-67.5 billion (€7-45 billion) in carbon trading volume each year.
“Linking RED to international carbon markets could create a real opportunity to tackle an important source of GHG emissions at comparably low costs and could overcome the funding constraints that have hampered forest conservation for many years,” they write. “While it is important not to raise unrealistic expectations about RED, overcoming the current challenges offers a historic opportunity of saving the remaining tropical forests while mitigating climate change.”
Johannes Ebeling and Mai Yasué (2008). Generating carbon finance through avoided deforestation and its potential to create climatic, conservation and human development benefits [FREE OPEN ACCESS]. Phil. Trans. R. Soc. B, DOI: 10.1098/rstb.2007.0026
Related articles [Breaking carbon finance articles]
Amazon deforestation could be eliminated with carbon priced at $3
(12/4/2007) The Amazon rainforest could play a major part in reducing greenhouse gas emissions that result from deforestation, reports a new study published by scientists at the Woods Hole Research Center, the Instituto de Pesquisa Ambiental da Amazônia, and the Universidade Federal de Minas Gerais. At a carbon price of $3 per ton, protecting the Amazon for its carbon value could outweigh the opportunity costs of forgoing logging, cattle ranching, and soy expansion in the region. 2008 certified emission-reduction credits for carbon currently trade at more than $90 per ton ($25 per ton of CO2).
|
|
Could the carbon market save the Amazon rainforest?
(11/29/2007) The global carbon market could play a key role in saving the Amazon from the effects of climate change and economic development, which could otherwise trigger dramatic ecological changes, reports a new paper published in Science. The authors argue that a well-articulated plan, financed by carbon markets, could prevent the worst outcomes for the Amazon forest while generating economic benefits for the region’s inhabitants.
Carbon offset returns beat forest conversion for agriculture in Indonesia
(11/21/2007) Conversion of forests and peatlands for agriculture in Indonesia has generated little economic benefit while releasing substantial amounts of greenhouse gases into the atmosphere, reports a new study from the the World Agroforestry Centre (ICRAF), the Center for International Forestry Research (CIFOR) and their Indonesian partners.
Is the Amazon more valuable for carbon offsets than cattle or soy?
(10/17/2007) After a steep drop in deforestation rates since 2004, widespread fires in the Brazilian Amazon (September and October 2007) suggest that forest clearing may increase this year. All told, since 2000 Brazil has lost more than 60,000 square miles (150,000 square kilometers) of rainforest — an area larger than the state of Georgia or the country of Bangladesh. Most of this destruction has been driven by clearing for cattle pasture and agriculture, often in association with infrastructure development and improvements. Higher commodity prices, especially for beef and soy, have further spurred forest conversion in the region. While drivers of Amazon deforestation are stronger than ever, mounting concerns over climate change and the effort to reign in greenhouse gas emissions may provide new economic incentives for landowners to preserve forest lands through a concept known as “avoided deforestation”.
Indonesia’s peatlands may offer U.S. firms global warming offsets
(8/29/2007) The following is modified version of a letter I’ve used to pitch U.S. companies on the concept of carbon finance in Indonesia’s peatlands. Discussions are slow and the critical December U.N. climate meeting is fast approaching, so I’m posting this as a tool to help you get American firms interested in avoided deforestation offsets. Please feel free to use, modify, and distribute this letter widely.
Could peatlands conservation be more profitable than palm oil?
(8/22/2007) This past June, World Bank published a report warning that climate change presents serious risks to Indonesia, including the possibility of losing 2,000 islands as sea levels rise. While this scenario is dire, proposed mechanisms for addressing climate change, notably carbon credits through avoided deforestation, offer a unique opportunity for Indonesia to strengthen its economy while demonstrating worldwide innovative political and environmental leadership. In a July 29th editorial we argued that in some cases, preserving ecosystems for carbon credits could be more valuable than conversion for oil palm plantations, providing higher tax revenue for the Indonesian treasury while at the same time offering attractive economic returns for investors.
Low deforestation countries to see least benefit from carbon trading
(8/13/2007) Countries that have done the best job protecting their tropical forests stand to gain the least from proposed incentives to combat global warming through carbon offsets, warns a new study published in Tuesday in the journal Public Library of Science Biology (PLoS). The authors say that “high forest cover with low rates of deforestation” (HFLD) nations “could become the most vulnerable targets for deforestation if the Kyoto Protocol and upcoming negotiations on carbon trading fail to include intact standing forest.”
Reducing tropical deforestation will help fight global warming
(5/10/2007) Scientists have lent support to a plan by developing countries to fight global warming by reducing deforestation rates. Tropical deforestation releases more than 1.5 billion metric tons of carbon into the atmosphere every year, though in some years, like the 1997-1998 el Nino year when fires released some 2 billion tons of carbon from peat swamps alone in Indonesia, emissions are more than twice that. Writing in the journal Science, an international team of scientists argue that the Reducing Emissions from Deforestation (RED) initiative, launched in 2005 by the United Nations Framework Convention on Climate Change, is scientifically and technologically sound, and that political and economic challenges facing the plan can be overcome.
Amazon rainforest locks up 11 years of CO2 emissions
(5/8/2007) The amount and distribution of above ground biomass (or the amount of carbon contained in vegetation) in the Amazon basin is largely unknown, making it difficult to estimate how much carbon dioxide is produced through deforestation and how much is sequestered through forest regrowth. To address this uncertainty, a team of scientists from Caltech, the Woods Hole Institute, and INPE (Brazil’s space agency), have developed a new method to determine forest biomass using remote sensing and field plot measurements. The researchers say the work will help them better understand the role of Amazon rainforest in global climate change.
Avoided deforestation could send $38 billion to third world under global warming pact
(10/31/2006) Avoided deforestation will be a hot point of discussion at next week’s climate meeting in Nairobi, Kenya. Already a coalition of 15 rainforest nations have proposed a plan whereby industrialized nations would pay them to protect their forests to offset greenhouse gas emissionsm. Meanwhile, last month Brazil — which has the world’s largest extent of tropical rainforests and the world’s highest rate of forest loss — said it promote a similar initiative at the talks. At stake: potentially billions of dollars for developing countries. When trees are cut greenhouse gases are released into the atmosphere — roughly 20 percent of annual emissions of such heat-trapping gases result from deforestation and forest degradation. Avoided deforestation is the concept where countries are paid to prevent deforestation that would otherwise occur. Policymakers and environmentalists alike find the idea attractive because it could help fight climate change at a low cost while improving living standards for some of the world’s poorest people and preserving biodiversity and other ecosystem services. A number of prominent conservation biologists and development agencies including the World Bank and the U.N. have already endorsed the idea.
Scientists endorse plan to save rainforests through emissions trading
(5/19/2006) The Association for Tropical Biology and Conservation (ATBC), the world’s largest scientific organization devoted to the study and wise use of tropical ecosystems, has formally endorsed a radical proposal to help save tropical forests through carbon trading. Under the initiative proposed by an alliance of fifteen developing countries led by Papua New Guinea and Costa Rica, tropical nations that show permanent reductions in deforestation would be eligible to receive international carbon funds from industrial nations who could purchase carbon credits to help them meet their emissions targets international climate agreements like the Kyoto Protocol.
Carbon trading could save rainforests
(4/12/2006) A new rainforest conservation initiative by developing nations offers great promise to help slow tropical deforestation rates says William Laurance, a leading rainforest biologist from the Smithsonian Tropical Research Institute in Panama, in an article appearing Friday in New Scientist.
Rainforests worth $1.1 trillion for carbon alone in Coalition nations
(11/29/2005) 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.
Developing countries: pay us to save rainforests
(11/27/2005) 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.