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Biofuels 200 times more expensive than forest conservation for global warming mitigation

Biofuels up to 200 times more expensive than forest conservation for global warming mitigation

Biofuels 200 times more expensive than forest conservation for global warming mitigation
August 27, 2008

The British government should end subsidies for biofuels and instead use the funds to slow destruction of rainforests and tropical peatlands argues a new report issued by a U.K.-based think tank.

The study, titled “The Root of the Matter” and published by Policy Exchange, says that “avoided deforestation” would be a more cost-effective way to address climate change, since land use change generates more emissions than the entire global transport sector and offers ancillary benefits including important ecosystem services.

“Preventing deforestation, promoting afforestation/reforestation and stopping peatland destruction are some of the cheapest and most effective ways of reducing global greenhouse gas (GHG) emissions,” the authors write. “We propose the introduction of market mechanisms that can ensure investment is directed into these areas and a strategy to make this happen as quickly as possible.”

“The prevention of deforestation and peatland destruction requires no technological development and little capital investment. This method of reducing GHG emissions is dramatically cheaper than all other mitigation technologies currently available—as low as US$0.1 per tonne of CO2,” they continue.

Peat forest logging and draining in Borneo

“The economics is startling — if developed countries spent the same amount of money on preventing deforestation and the destruction of peatlands as they do on biofuel subsidies (US$15 billion), this would halve the total costs of tackling climate change. In addition to this, the protection of these habitats yields a plethora of valuable eco-system services, particularly in the poorest countries.”

The report says that despite the benefits and the low costs, British government policy does not place any value on protecting forests and peatlands. Arguing that this is a mistake, the authors recommend a series of policy actions.

First and foremost, the report urges the British government to abandon its targets and subsidies for biofuels. Not only do biofuels distort food markets, they promote destruction of tropical forests and peatlands, resulting in greenhouse emissions. Further, biofuels are a costly and ineffective means for fighting climate change. The authors demonstrate this by comparing the cost and the emissions savings between potential avoided deforestation mechanisms and the U.K. government’s Renewable Transport Fuel Obligation. They find that the biofuel initiative will save 2.6-3 million tons of carbon dioxide per year at a cost of £550 million ($1 billion), while a similar investment in preventing deforestation and peatland destruction could result in avoided emissions of 40-200 million tons of CO2 per year or a 50 times greater amount of avoided emissions. The savings would be equivalent to 37 percent of all UK carbon dioxide emissions for 2005.

Cost comparison of carbon mitigation options. Biomass, hydrogen fuel cells, nuclear power, biofuels, solar, “clean coal” with carbon capture and sequestration (CCS), all fare poorly from an economic standpoint when compared with avoided deforestation and avoided tropical peat destruction. Courtesy of the “The Root of the Matter”.

Beyond a moratorium on incentives for biofuels, the authors recommend supporting efforts to reduce peatland destruction in Southeast Asia, especially Indonesia, where large tracts of peatlands are being drained and cleared for the establishment of oil palm plantations. The authors say that because of the high levels of carbon storage in peatlands, reducing their destruction is “one of the lowest-hanging fruits of climate change mitigation.” The U.K. should exert political pressure on the drivers of deforestation while simultaneously offering financial carrots for reducing destruction. The report calls on the government to support capacity building — through financial support and technology transfer — in developing countries to prepare for avoided deforestation as well as seed-funding for pilot projects. The authors urge the establishment of a forest carbon market that would provide a “realistic price” for carbon that fully values the ecosystem services provided by healthy forests and provides a financing mechanism for conservation measures. The authors say credits should be generated both by reforestation and reducing deforestation and degradation and asks the British government to push for an international agreement that recognizes the role of avoided deforestation in future climate change mitigation.

“In the UK we can dramatically increase funding for forest and peatland projects domestically and with key partners, especially in Southeast Asia, as well as lobbying at an international level for the right global policies,” Ben Caldecott, editor of the report, was quoted as saying by BBC News. “All this can be done within our current budget, by ending wasteful and damaging biofuel subsidies.”

The Root of the Matter

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