Tuesday, 19 February 2008

Trading in Trees

The Star Online, Malaysia

Trading in Trees

Turning trees into tradable securities can be a way out to preserve the world’s rainforests.

FOR decades, a flood of aid and an army of conservationists couldn’t save Indonesia’s rainforests from illegal loggers, land-hungry peasants and the spread of giant plantations.Now the world is looking at a simpler approach: up-front cash

Whether it was arming forest police or backing schemes to certify legal logs, no tactic could silence the chainsaws or douse the intentional fires that each day destroy another 50sqkm of Indonesia’s rainforests, and an estimated 285sqkm elsewhere in the world’s tropics.

The problem was pure economics: neither local authorities nor the rural poor, in Indonesia and elsewhere, have a material incentive to keep their forests intact.

That could now change because of a decision at December’s UN climate conference in Bali, Indonesia, to negotiate a deal, as part of the next international climate agreement, under which countries would be rewarded for reducing their galloping rates of deforestation, a big contributor to global warming.

The cash might come directly from a fund financed by richer northern nations, or through “carbon credits” granted per unit of forest saved. The credits could be traded on the world carbon market, where a northern industry can buy such allowances to help meet its own required reductions in emissions of global warming gases.

Indonesia and other tropical countries backing the “avoided deforestation” concept hope this carbon price will outpace what landowners could get from logging the forests or clearing them for palm oil, rubber, soybean or other plantations.

“There will be a lot of money going in there,” said Benoit Bosquet, head of a World Bank project to prepare poorer countries to take part in the new initiative, known as REDD, for Reducing Emissions from Deforestation and Degradation.

“You will see actors currently converting forest to plantations and cattle ranches saying, ‘Wait a minute. If I get more money to preserve my forest than to produce beef, then of course I will keep my forest standing.’” – AP