Sunday, March 30, 2008

Save the Climate by Saving the Forests

By Fred Pearce
The New Scientist

22 March 2008 Issue

Kevin Conrad was brought up in Papua New Guinea, the son of American missionaries. He spent his childhood "shooting birds, cutting down trees and burning things". His name might not be familiar, but at the Bali climate conference last December he drew applause and worldwide TV coverage for taking on the US. If it wasn't willing to lead the world in combating climate change, said Conrad, head of the Papua New Guinea delegation, the US should "get out of the way".

There is more to Conrad than those 15 seconds of fame. He is an academic and an investment banker. He is also the founder and director of an organisation called the Coalition for Rainforest Nations, which has almost single-handedly persuaded the world that one of the best ways to tackle climate change is to offer developing countries huge cash incentives to stop destroying their rainforests.

Conrad runs the coalition out of a small office at Columbia University in New York. But it began, he says, in 2005 on a beach in Papua New Guinea. "I went for a walk by the ocean with the prime minister, Michael Somare, who comes from the same home town as me. He talked about how he wanted to save our rainforests, but how we depended on them for our income. We agreed there had to be a way of paying to save the forests. So we set up a group of nations with the same ideas - Deforesters Anonymous, we called them at the start - and got those ideas on the agenda of the climate negotiations."

Two years on in Bali, delegates from more than 100 countries agreed to establish a system of compensation for reducing deforestation. The aim is to have a deal ready for signing at a climate conference in Copenhagen in 2009. If it works, it will cut a source of greenhouse gas emissions that is second only to the burning of fossil fuels.

"Bali achieved more than we ever expected," says Conrad. There is widespread support for the plan, dubbed Reducing Emissions from Deforestation and Degradation (REDD). It extends from green non-governmental organisations and forest scientists to aid experts and a new breed of carbon capitalists keen to make money out of cutting carbon emissions.

No doubt it helps that reducing deforestation is the cheapest way of cutting global emissions. At about $10 per tonne of CO2 it works out at around half the cost of replacing coal with renewable energy.

This is, however, a radical plan. The "good guys" will get nothing. The money will go not to those trying to conserve forests or harvest them sustainably, but rather to bribe the "bad guys" who are destroying them. The most prolific deforesters are already lining up.

Some will find this idea hard to stomach, but with CO2 levels rising fast, the important question is whether REDD will work. Can forest scientists measure how much carbon is locked up in the jungle accurately enough to police deals that hand out dollars in return for keeping it there? Or will REDD be a recipe for corruption that ends up accelerating climate change rather than slowing it?

The world's forests hold 50 per cent more carbon than the atmosphere. According to the UN Food and Agriculture Organization, the net loss of forests releases around 1.1 billion tonnes of this carbon to the atmosphere each year, or more than a seventh of total annual man-made emissions.

At least, that's what the official numbers say. Alan Grainger of the University of Leeds, UK, recently concluded that the UN figures are so poor it is unclear whether tree cover is declining at all. "I'm not saying it isn't declining, just that the data don't prove it," he says. The national forest ministries who compile the data are simply not up to the job and methodologies keep changing, making comparisons difficult.

Luckily, however, the virtual monopoly of governments on forest data is being broken by breakthroughs in remote sensing. Until recently, satellite monitoring relied on the visible spectrum. That meant satellites could only capture occasional glimpses of rainforests through the clouds. Even when the skies are clear these images are poor at revealing the more insidious processes of forest degradation - and resulting carbon loss - as humans invade.

Now satellites such as the Advanced Land Observation Satellite (ALOS), launched in 2006, can use radar to peer through the clouds and assess changes in biomass. "This marks a new era. We can get complete cloud-free observations three times a year from ALOS," says Josef Kellndorfer of the Woods Hole Research Center at Falmouth, Massachusetts.

Such technologies could be used to create an independent World Forest Observatory, says Grainger: "If a global forest monitoring system is to be scientifically credible, it must be non-governmental." Will governments accept its conclusions? That remains to be seen, but the potential returns are so great that they might. Indonesia, one of the countries keenest on REDD, reckons it could earn $3.75 billion a year from the scheme.

The bigger question is whether the scheme really can turn things around. Many other attempts to save the forest have foundered. In 1990, for instance, industrialised nations agreed with Brazil a $1.5 billion rescue package for the Amazon rainforest. Between 1990 and 2004 deforestation rates doubled.

There is one exception: Costa Rica (see Maps). This small country has achieved a dramatic turnaround with a mix of conventional measures - such as creating national parks, banning deforestation and planting trees - and cash incentives akin to those envisaged by REDD. Its expanding forests are now absorbing so much carbon that Costa Rica expects to be carbon-neutral by 2021 - the first country to achieve this.

Can REDD repeat the Costa Rican success on a global scale? Pilot projects are already being launched to test the ideas, but there is no shortage of problems. One of the most obvious is "leakage".

Consider: country X announces a large REDD project in a forest being wrecked by loggers or cattle ranchers. It collects the compensation, gives the cash to the loggers and ranchers, and the forest is saved. But the loggers and ranchers don't sit around doing nothing: they move into a neighbouring area of forest, and plunder that instead. Overall there will be just as much deforestation.

To avoid leakage, says Conrad, countries should only get payments if they can show that the destruction did not relocate. That means working out a national rate of expected forest loss. Only countries that reduce deforestation below this baseline figure will get compensation. "National accounting is essential," he says.

Forest scientists, however, throw up their hands in despair at the idea of working out baselines. The rate of forest loss can change greatly from year to year, depending on the state of the forests, the price of forest products and land, corruption and law enforcement.

In the Philippines deforestation rates are falling fast - because there are not many trees left to cut down. In the Democratic Republic of the Congo, however, rates look set to rise as civil war subsides. And what about Brazil, where the deforestation rate doubled from 1990 to 2004, then fell by two-thirds till the middle of 2007, and is now climbing sharply again as food prices rise?

Here science is likely to take a back seat to politics, especially as countries' involvement in REDD will be voluntary. Rainforest nations could end up determining their own baselines. If the system ends up rewarding countries with rising rates of deforestation, however, it will rapidly fall into disrepute.

Many hope that REDD will at least help the poor inhabitants of rainforests who take the trouble to protect their own forests, as happens in Costa Rica. But the carbon market is unlikely to be that benevolent. Indigenous tribes in the Amazon or central Africa, who have lived in harmony with their forests for generations, will almost certainly receive nothing. They have not been deforesting, so what could they be compensated for?

What about small farmers? There is a great deal of uncertainty about how much real damage to forests is caused by shifting cultivators, who clear forest, farm the land for a couple of years and then move on as soils lose their fertility. Conventional forest surveys blame them for destroying large areas, but much of the cleared land swiftly regenerates.

"Poor people are usually too poor to do much damage," says Frances Seymour, director of the Center for International Forestry Research, a World Bank-backed research agency based in Indonesia. She fears that such farmers will be thrown off their land by entrepreneurs intent on claiming compensation for "protecting" the forest.

Meanwhile, some huge forest destroyers are drawing up plans to get compensation. On the Indonesian island of Sumatra, for instance, giant pulp mills are responsible for vast amounts of carbon being released into the air as they log rainforests and drain peat bogs to plant new trees. One of them, Asia Pacific Resources International (APRIL), wants to set up a REDD pilot project under which it will block the canals that now drain the Kampar swamp. APRIL could receive tens of millions of dollars a year in compensation for protecting the forest and not releasing the peat carbon. The project is genuine and is based on sound science, but the reductions are only possible because the company has been so destructive in the past.

At the national level, too, it is the prolific deforesters who have most to gain. Costa Rica will go penniless, while Indonesia could cash in. And countries that reduce deforestation now, before the baselines are set, could lose out. "Each country will have a direct financial incentive to set deforestation baselines as high as possible, in order to qualify for larger REDD transfers," Seymour says.

Some say we cannot be too squeamish. That there are bound to be failed projects and scams, but any reduction in deforestation is a good thing. If the compensation is paid in cash, then this will be true: REDD should make a difference even if some money goes into the wrong pockets. One way to raise cash, favoured by the European Commission, is through government-to-government aid, perhaps funded by a levy on the growing trade in carbon credits among rich-world polluters.

State aid, however, could be limited. Instead, the rainforest nations want compensation in the form of carbon credits, which they can sell to rich countries or companies that need the credits to meet emissions targets. Economists say this system should be the most cost-effective, with competition delivering the cheapest ways of keeping carbon out of the atmosphere.

However, this could let the developed world off the hook. Preventing deforestation could become a substitute for cutting industrial emissions.

It is also risky. Suppose a power station in the US or Europe offsets its emissions by buying carbon credits from a deforestation project in the tropics. If that project is a failure, then more carbon will have been released than would have happened without REDD.

Another danger in linking REDD to a global carbon market is that the value of carbon credits will depend on supply. As more and more rainforest is earmarked for saving, the market could be flooded with carbon credits, causing a price crash. Cheap credits would provide little incentive to cut emissions or protect more forests.

There are solutions. One is to ring-fence REDD from the carbon market. Another is to dramatically toughen emissions targets in the industrial world, so that the demand for credits rises in line with supply. But there were no signs in Bali that governments have factored this into their calculations of emissions targets.

What's more, many analysts say that REDD is unlikely to save the rainforests unless it is combined with a crackdown on the economic drivers of deforestation. "We have to address the drivers, or it won't work," says Conrad, despite his fervour for market solutions. "That's the big task now."

Seymour agrees. "REDD finance to Indonesia, for instance, must prompt decisions to mothball pulp mills in Sumatra, or to reject proposals to convert forests into oil palm plantations." Yet many developing countries still hope that funds from REDD can be secured without them having to make sacrifices elsewhere in their economies.

And what of Papua New Guinea, birthplace of the plan? While the country is still largely forested, much of it is licensed to loggers. The World Bank estimates that around 70 per cent of current logging in the country is illegal. The government's own audits reveal that politicians are complicit in the illegality and profiting from it. "REDD [will] pour money in one end, and corruption will just siphon the whole lot off," says John Burton at the Research School of Pacific and Asian Studies of the Australian National University, Canberra.

Papua New Guinea's government has already entered into an agreement with a bank called Pacific Capital Limited to lay the groundwork for carbon trading. There have been allegations in the country's parliament that Conrad has received payments in connection with this, an accusation he denies. "I don't benefit personally from any of this. One of the foreign logging companies here doesn't like my ideas, and they have hired people to make allegations about me."

It would not be seemly for an international climate diplomat to have a large personal financial stake in what he is pushing for. But we all have a stake in a stable climate. And, most likely in the modern world, this will only be achieved if there is money to be made along the way.


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