Reuters
Monday 02 July 2007
Singapore - The U.N. is due to report on proposed carbon-trading schemes that would make it more rewarding for countries to preserve their forests rather than cut them down. The report on "Reduced Emissions from Deforestation" (RED) will be presented at a climate change meeting in Bali, Indonesia, in Dec. 2007.
Here are some key facts on RED:
Why Is It Needed?
- Deforestation, especially in the tropics, contributes about 20 percent of man-made global carbon emissions, some two billion tonnes of carbon per year. Trees are 50 percent carbon and release carbon dioxide (CO2) when they rot or burn. Forests soak up vast amounts of CO2 and clearing the land erodes soils that are also carbon stores.
- Forests contribute more to the global emissions tally than the entire transport sector (14 percent) but they are not included under the existing emissions reduction framework, the Kyoto Protocol, which focuses on industrial and transport-related emissions.
- The influential Stern climate change report suggested preventing emissions from deforestation would be cheaper than some other methods of emission reductions. It also predicted emissions from deforestation could reach 40 billion tonnes of CO2 between 2008-2012 if not stopped.
Who Backs the Idea?
- Ex-World Bank chief economist Sir Nicholas Stern. He suggests avoided deforestation measures be included in the post-2012 commitment period under Kyoto. He urged pilot schemes to begin as soon as possible in his Stern Review on Climate Change published in Oct. 2006.
- The World Bank is positioning itself as the lead agency on avoided deforestation. It has proposed a Forest Carbon Partnership Facility to be part of its new NGO and private sector led mega-fund, the Global Forest Alliance, scheduled to start operations in early 2008.
How Would It Work?
- Various schemes propose compensating government, the private sector and forest owners for protecting forests, and giving economic investments to counter economic drivers of deforestation, such as palm oil expansion, industrial tree plantations and conversion to agriculture.
- RED schemes would be run via national carbon accounting and verification, rather than being project-based. Remote sensing technology and "ground truthing" checks would verify reductions and monitor their "additionality" (a net reduction) and "leakage" (man-made damage to forest carbon stores).
What Do Critics Say?
- Schemes are vague about who would be compensated. They could create incentives for governments and business to displace millions of forest peoples to capture carbon funds, further disenfranchising communities by increasing state control of forests at the expense of collective customary land rights.
- Global carbon trading is contradictory and ethically problematic. Its premise, that companies which invest in carbon trading schemes buy the rights to continue polluting elsewhere, can create serious costs to the environment, and indigenous people's well being.
How Much Money Could Be Involved?
- Payments could range from $200 to $10,000 per hectare of forest, the World Bank says. It estimates using avoided deforestation to reduce the annual deforestation rate in developing countries by 20 percent would cost between $2 and $20 billion annually - or $100 billion to halt it altogether.
- The Stern Review estimated it would initially cost around $5 billion a year to protect forests in the eight countries responsible for 70 percent of emissions from land use.
Climate Deals Turn Up Heat in Indonesia's Dark Peatlands
By Gill Murdoch
Reuters
Monday 02 July 2007
Palangkaraya, Indonesia - It used to be malaria that gave people fevers in Indonesia's remote, mosquito-infested peatlands.
Now it is carbon.
Investors around the world are dreaming of the billions the festering carbon-rich bogs could bring in as the world battles global warming. Peat bogs are the new black gold, some say.
Science has long known that Indonesia's 20 million hectares (50 million acres) of dense, black tropical peat swamps, formed when trees, roots and leaves rot, are natural carbon stores, explained University of Nottingham peat expert Professor Jack Rieley.
"They are 50 to 60 percent carbon. Peat stores more carbon than all of the planet's vegetation combined," he said.
Now the dots have been joined between peatlands and the massive amounts of climate change-related carbon emissions they release when burnt or drained to plant crops such as palm oil.
Peat is a potential gold-mine, said Marcel Silvius, Senior Programme Manager of Wetlands International NGO.
"This science was not available before," said Silvius, the co-author of a November 2006 report that found Indonesia's peatlands emit two billion tonnes of carbon dioxide each year - more than the annual greenhouse gas emissions of Japan or Germany.
Years of lucrative deforestation for timber and palm oil plantations has entrenched the practice of burning vast areas of Indonesian land, smothering neighbouring Malaysia, Singapore and Brunei in annual choking smoke clouds, known as haze.
Now, in a sudden reversal, keeping Indonesia's forest cover intact is a hot investment ticket in a warming world, said Silvius.
"(The world's peatlands) emit eight percent of global carbon dioxide emissions, equal to what all the Annex One (industrialised) countries need to decrease (under the Kyoto Protocol). Tens of billions could be invested to achieve this," said Silvius.
Around $30.4 billion of carbon credits - representing 1.6 billion tonnes of CO2 - were bought and sold last year in Europe by companies seeking to trade off business-related carbon emissions for emissions reductions achieved elsewhere.
Already, investors are knocking on doors in towns close to peat swamps, such as Palangkaraya, in Central Kalimantan.
Within the million hectares of the nearby ex-Mega Rice Project peatlands, Rieley's scientists have been offered funding from Climate Care for tree planting and fire-fighting. Shell Canada is bank-rolling NGO-led peat rehydration and the Dutch government has invested 5 million euros ($6.7 million) in dam-building.
"They are all coming to visit the same people in Palangkaraya," said Daniel Murdiyarso of the Bogor-based Centre for International Forestry Research.
"There's so much interest - we are in the eye of the hurricane."
Deforestation Fever
Emissions cuts from forest areas such as peatlands are not yet eligible for trade, because they were excluded from the Kyoto Protocol's first, 2008-2012, round. But many predict they will be in six months' time, after the UN climate meeting in Bali hears a report on Reduced Emissions from Deforestation (RED).
"It has to enter the agenda so that developing nations such as Indonesia can benefit," Environment Minister Rachmat Witoelar told Reuters.
"We are ready. We have a grand plan to identify and restore or conserve our forest areas. We have also prepared the financial side of the deal," he said.
Meanwhile, the voluntary market is "developing rapidly", as investors hope carbon futures will evolve into tradable credits said Jorund Buen, the director of Point Carbon analysis group.
"Discussions on including avoided deforestation are among the most advanced with regards to post-Kyoto commitments," he said.
As home to 60 percent of the world's threatened tropical peatlands, and among the world's top three carbon emitters when peat emissions are added in, Indonesia is in the spotlight.
"While the details are still in the works, the 'big story' is becoming more clear," said Meine van Noordwijk, principal scientist for the World Agroforestry Centre.
"If this stays outside of the international discussions a huge opportunity will be missed ... If accepted in principle, this will become part of the 2012-2017 international regime," van Noordwijk, who is based in Indonesia, said.
However, speculators descending on Indonesia's peat-towns are finding locals less up to speed on the intricacies of carbon trading and peatlands protection, said Murdiyarso.
"It's not easily understood by people - the confusion is overwhelming ... The papers here say, 'Central Kalimantan is clearing up the air of Canada'," he laughed. "The publicity from the local media is appalling."
People Vs. Peatlands?
While RED's exact stakeholders are murky, its plan to help save the planet by making conservation profitable is likely to be nationally based, rather than project-based, and to involve governments, the private sector and NGOs, analysts say.
But stitching up peat swamp carbon deals without involving local communities risks raising real tensions, said Jutta Kill of FERN, the Forests and the European Union Resource Network.
"Because the focus is narrowly on keeping the carbon stored, the incentive to police is increased," she said from Britain. "In Uganda, people have been shot at by forest rangers to defend carbon forestry projects."
This kind of market-led carbon trading is not the only way to safeguard forest carbon, she said.
"Northern countries could do a lot by not pushing deforestation through (expanding) palm oil and biodiesel (developments)".
"It certainly is a big policy incoherence if one part of the climate discussion is to reduce emissions from deforestation, and the other leads to an incentive to deforestation," she said.
Whatever eventuates, if perennial peat land problems such as poverty and fires aren't tackled, Indonesia's forests could go up in smoke, taking carbon traders dreams with them, Rieley said.
"A lot of things are supposed to happen at a high level. The problem is the low level - how are you going to stop fires on the ground?"
"None of these schemes will work if the fires aren't stopped," he said. "You'll not only lose your forest, you'll lose your peat and its ability to function as a carbon store."
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