Wednesday, October 21, 2009

Tropical forests, carbon credits and discount rates

There's a good read over at WorldWatch: "U.S. Under Pressure to Protect Tropical Forests".

The short of it:

To meet emissions reduction goals via cap & trade, polluters in more industrialized nations need to purchase carbon offsets.

Reducing rates of deforestation in less developed nations (allowing standing forests to stand) can offset carbon emissions cheaply and effectively.

Now, think about discount rates and incentives ... does this sound like "win-win"?

Note the discussion of risks. Ideas for how to mitigate those possibilities?


Anonymous said...

The risks are losing the forests due to fire or other event. Mitigation measures might include augmenting offsets with a requirement to plant additional forests..a bit like having an insurance policy. The other risk is whether the carbon in the forest equates fairly with the offset. I do not know enough on this specifically, however, it would appear to require good scientific research and validation. The value of the offset should be the actual value of the carbon sequestered in the forest. In this way the externality of the pollution would be accounted for in the cost of the carbon offset.
Derek Alleyne CERMES

Anonymous said...

This does seem like a win-win in terms of discounting and incentives. Poorer nations who have high discount rates (i.e they want money now, and it is worth less in the future) will receive money now from a country like the United States. The incentive here is that the money the US pays to preserve these forests is "returned" in the form of allowable carbon emissions. - Ryan D.

Parker said...

I think this is a good idea, but in practice it may not work as well. A lot of the agencies that would be in charge of protecting the forests in places like Brazil are underfunded and corrupt. Loggers may use scare tactics to keep the forest rangers from enforcing rules and whoever is in charge of enforcing the rules may have too much ground to cover. This may end up not working as well as countries like Brazil plan, because they may not be able to hold up their end of the deal.
A. Parker

Anonymous said...

Under ideal circumstances this seems like it would be a good idea and a win-win situation as the poorer nations that struggle to find the funding to protect their forested areas under pressure to develope would receive the money to do so from out of country. This money would be coming from countries, such as the US, that view the future value of the forested areas as higher than they are worth now, but in reality I think it will work.
I don't see how protecting forests that already exist as a way to truly reduce your emissions. To compensate for increased emissions it seems to me that you would have to actually plant "new" trees rather than just protecting ones already there. Polluting and not cutting down trees seems to be totalling one negative action. Polluting and cutting down trees equalling two negative actions. Planting trees and polluting equaling one negative and one positive. Maybe?
Also, I think its impossible for the example country here, Brazil, to stand a chance in actually protecting its rainforests from the pressures of development in this way. Belize, a nation a mere fraction of the size of Brazil and which has over half of its land protected in parks, can't protect all of its land from developmental pressures of the poor as Guatemalans and some of its own citizens still harvest forest products from protected areas. Thats not even considering how to protect from natural events. If these companies invest in a forest offset and that forest falls to natural causes does that company then have to pay again since its canbon offset is now gone?

hunter hay

Anonymous said...

in that statement above the line should read "in reality i think it won't work."