Clearing ground for a deal to save forests

Financial Times, 19 November 2009 - One does not have to venture off the beaten track to discover why south-east Asia's biggest economy is the world's third largest emitter of greenhouse gases.

For mile after mile on Sumatra and Borneo, the country's once ubiquitous tropical rainforests, and crucially those growing on the especially carbon-rich peat swamps, are being systematically felled and the peat drained, releasing millions of tonnes of carbon dioxide into the atmosphere. The perpetrators range from wealthy paper and palm oil companies to poor farmers.

In many areas the degraded remains of the jungle are then set alight to accelerate what would otherwise be a costly land clearing process. This results in more emissions as well as areas of up to thousands of square kilometres being blanketed in a choking smog that forces schools to close, cripples regional air traffic and sees hospital admissions soar.

“I know it's bad for my health but I don't have any choice,” says Ardianto, a subsistence farmer, as he struggles to contain the flames on his half-hectare plot of peat swamp near the Kampar peninsula in Riau, on Sumatra.

“I can't afford to clear the land any other way.”

In a reaction typical of many ordinary Indonesians, his face goes blank when asked about climate change.

That may well soon change. At the UN climate change conference in Copenhagen next month, part of the agreement is expected to include the principles of a new scheme where carbon credits will be offered for maintaining standing forests. It is known as Reduced Emissions from Deforestation and Degradation, or Redd. Once fully operational the scheme could be worth billions of dollars a year for major forest nations such as Brazil and Indonesia, although current predictions suggest that this could be a decade away.

In the past three years a growing consensus has emerged that land use change is responsible for almost a fifth of all greenhouse gas emissions. Deforestation-related emissions in Indonesia and Brazil account for about 40 per cent and 33 per cent of that respectively.

“If you could stop only Indonesia's forest fires and peat conversion, you would eliminate about 3 per cent of annual global emissions at a stroke,” says Paul Winn of Greenpeace, the environmental group. That is equivalent to all annual emissions from aircraft.

Most tropical forest nations are developing countries which argue that, since developed countries deforested without hindrance for centuries, environmental concerns should not prevent them exploiting forests that are considered more lucrative cleared than left standing and acting as sinks that trap and store carbon.

That imbalance is largely because officials negotiating the Kyoto protocol on climate change 12 years ago ignored forests as they were divided on issues such as how to measure initial carbon levels and to verify emissions were being saved rather than merely moved elsewhere. The good news – both for Indonesians choking in the smoke and the world beyond – is that, as global warming awareness has increased, such thinking has been superseded.

“[Land use change] is up to 20 per cent of the problem so it's certainly worth dedicating 20 per cent of our efforts to finding a solution,” says Frances Seymour, the head of the Indonesia-based Centre for International Forestry Research.

Implementing Redd will, however, be far from the “quick win” it might appear.

In the past two years, after Redd became part of the Copenhagen agenda, dozens of institutions, ranging from profit-driven international banks such as Merrill Lynch and Macquarie to arguably more altruistic governments and organisations such as the Clinton Foundation, have signed deals to protect large tracts of forest and peatland.

Technological advances in the past decade, particularly in fields such as satellite mapping, mean some of the Kyoto protocol negotiators' concerns about forests are slowly being overcome. But many challenges remain.

Jim Davie, field manager for a Redd pilot project being funded by the Australian government near Palangkaraya in central Kalimantan province on Borneo, says many people in forest countries have not grasped that Redd will require “behavioural change ... that's going to hurt”.

Ms Seymour says Redd activities currently involve few officials beyond forestry ministries, but to be effective they will have to be expanded significantly.

Numerous land disputes will also have to be settled, she says. “You have to have a clearly identified seller of the carbon reductions and in most forest areas you don't have that because you have contested ownership of the real estate.”

CIFOR research in Brazil found projects would be economically viable for half of the threatened forest land but ownership was uncontested on only a quarter of it.

Disagreements remain among forest nations, and between them and donors over how money should be channelled and to whom. But consensus is growing that implementing Redd optimally will require tens of billions of dollars a year and that money will only be available via a market mechanism.

All involved acknowledge that few private investors are going to be willing to put in money until the mechanisms have been agreed and countries can demonstrate genuine emissions reductions.

Current estimates are that the preparation phase will last until about 2015, and will be mostly dependent on public money for funding, then there will be a five-year transition towards a market-dominated system and only thereafter will Redd be a predominantly market system.

Critics of a market-based system, such as Friends of the Earth, say because forests and peat emit so many greenhouse gases but, compared with many other sectors, the credits are relatively inexpensive to generate, the market will be flooded with cheap credits and the price of carbon will collapse. Defenders of the scheme say the credits will still need to compete with other development options or risk not being seen as viable by forested countries.

Back in Riau, Mr Ardianto reflects this point with a layman's clarity. “All I want to do is to be able to feed my family and send my kids to school,” he says. “If this means I have to cut trees I will. If I can make more money by not doing so, then I won't.”

Author John Aglionby Publication Date 19 Nov 2009 Document Type News articles Issue/Topic Ecosystems Energy & Climate Forest Products Source Financial Times Include In RSS Business & Sustainable Development News Energy & Climate News