Unlike carbon, tropical forests are not commodities
I’ve been meaning to write something about tropical forests for a while. There is not much doubt that they are worth more standing than cut down, and there is some debate about how to make sure they stay where they are.
Deforestation across the world is thought to be responsible for a fifth of greenhouse gas emissions. Tropical forests also contain half the world’s known species and play important roles in all kinds of ecosystems.
The debate on protecting tropical forests seems to have moved from purchase and retirement of land by wealthy individuals and charitable foundations to how tropical forests can be preserved with carbon money.
Organisations preserving forests would be allocated offset credits that regulated companies in developed countries could buy instead of reducing their own emissions. This is not a good idea for two reasons:
- It’s theoretically zero-sum and probably worse. Preserving forests as carbon sinks is not an accurate way to mitigate carbon emissions. Where offsets are sold into cap and trade schemes, the accuracy of the reduction behind the offset is essential to the integrity of the cap.
- It’s an expensive way to preserve forests. While almost certainly better value than the industrial gas destruction projects that have historically delivered a lion’s share of the CER pipeline, preserving forests does not need to cost 20 euros per tonne of CO2.
So how can the ‘ecosystem services’ that forests provide be valued and paid for, if not through carbon markets?
This is the wrong question. The human ROI of protecting tropical forests is a no-brainer. There is no need to let the market determine the value of forests as CO2 sinks – we just need to find the cheapest way to preserve them.
This is why I favour a fund that would be allocated to organisations preserving forests through reverse-auction type processes.
The current plans for the role of the Global Forest Carbon Mechanism in the post-Kyoto UNFCCC framework are half right – the fund will channel money to forest preservation, but will also allow Annex I countries to buy credits from the forest managers.