Carbon Emission Trading Can Bring Worldwide Benefits
New Report Finds Carbon Trading to Be Win-Win Proposition for Poor Villagers, Big Business, and for Slowing Climate Change
Justice-based, free-market solutions to pollution involve making it more expensive to pollute. This can be done by levying taxes on pollution, or by making permission to pollute more scarce so that it gains a market value. More efficient companies that pollute less can then enjoy higher profits, and less efficient companies will be motivated to modernize and cut their own pollution emissions.
Here is a news announcement on this subject from Future Harvest, dated October 18, 2002.
As a major meeting on global climate change opens in New Delhi next week, a potentially controversial report concludes that deals to counteract the carbon emissions of the smokestack industry could benefit more than the environment. It reveals that carbon-trading deals in forestry could sharply reduce poverty among the rural poor, while also providing businesses with an inexpensive way to "off-set" their carbon emissions. The research counters the old view that most carbon-trading deals between industry and tree growers in developing countries would have negative environmental and social consequences.
Carbon trading allows industries in developed countries to off-set their emissions of carbon dioxide by investing in reforestation and clean energy projects in developing countries.
The report's authors are seeking major changes to the carbon-trading rules to be debated in next week's Eighth Session of the Conference of the Parties to the Climate Change Convention under the Kyoto Protocol. In particular, the report suggests these changes will ensure that poor countries become "real players" in the climate change negotiations.
This is the first report to examine whether community tree planting projects are viable contenders for the emerging market in carbon trading. Released by two of the world's leading forestry organizations, the research pools evidence from more than 20 studies of actual forest carbon projects on the ground. The report was authored by researchers at the Bogor, Indonesia-based Center for International Forestry Research (CIFOR), a Future Harvest Center of the Consultative Group on International Agricultural Research, and Washington, D.C.-based Forest Trends. Financial support for this work was provided by the UK's Department for International Development (DFID), the Rockefeller Foundation, Germany's Centre for Technical Cooperation (GTZ), and the United States Agency for International Development (USAID).
The report argues that carbon projects could potentially recover habitat on millions of hectares of heavily populated forest and farmlands. "This would bring social, economic, and local environmental benefits to hundreds of thousands, and potentially millions, of poor rural people in the developing world," said David Kaimowitz, Director General of CIFOR.
"Our report shows for the first time that deals between industry and community tree growers may be one of the least expensive ways for companies to off-set their carbon emissions," said Sara Scherr, Senior Policy Analyst at the Washington, D.C.-based Forest Trends and co-author of the report. "If companies invested in such deals, this could mean a huge number of private sector dollars being invested in poor rural areas."
For example, in the Handia Forest range of Madhya Pradesh, India, 95 very poor rural villages would jointly earn at least US$300,000 every year from carbon payments by restoring 10,000 hectares (24,700 acres) of degraded community forests, if their project succeeds.
"Healthy forests bring all kinds of other benefits too," said Scherr. "In this situation, they would help to protect endangered leopards and monkeys and improve local water supplies. At the same time, villagers—many of whom own no cropland—would earn money from the sale of fuel wood, high-value timber, and tendu leaves used for wrapping cigars."
"Community tree planting efforts have always been thought of as too costly and risky for businesses," said Joyotee Smith, co-author of the report. "However, our report shows that many community-based projects can sell carbon credits at the expected global market price of US$15 to $20 per ton of sequestered carbon."
Forests can reduce greenhouse gases in the atmosphere by sequestering carbon, but many fear carbon-trading deals will spawn vast corporate tree plantations with monocultures of non-native tree species on lands already claimed by local people. "Forest Carbon and Local Livelihoods: Assessment and Policy Recommendations" contends that community tree-planting projects can offer investors the same carbon benefits as industrial tree plantations and at lower risk. Many industries will prefer to buy "socially responsible" carbon credits, as long as the cost is competitive.
"All these opportunities will be lost unless villager-owned tree growing efforts are explicitly supported in the international carbon-trading rules," said Scherr.
Industrial countries can only use deals in lower-income countries to offset a limited portion of their carbon obligations. This still represents a potential private financial flow of US$300 million per year to some of the world's poorest people, however. According to the researchers, this share of investment could more than match current annual flows of official overseas aid for forestry development in poor communities.
The potential environmental benefits of the deals discussed in the report are enormous. According to the researchers, there are 126 million hectares (311 million acres) of low-yielding crop and pastureland. Converting some of these areas to higher-yielding agroforestry would sequester five to 50 tons of carbon per hectare per year. Rehabilitating dry forests in India could double sequestration from 27 to 55 tons of carbon yearly for every hectare of dry forest improved. Using carbon finance to reforest critical wildlife habitat, The Nature Conservancy's project in the unique Atlantic Forest of Brazil, could sequester 60 tons of carbon yearly for every hectare of land converted. In the process, this particular effort will secure water supplies and generate local income from ecotourism as well.
For more information, visit Future Harvest at www.futureharvest.org
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