Tropical Deforestation and Climate Change [16/11/2006 16:35]

Written by Paulo Moutinho, from the Ipam (Institute for Environmental Research of the Amazon Region - Instituto de Pesquisa Ambiental da Amazônia), Stephen Schwartzman, of the Environmental Defence Fund (EDF), and Marcio Santilli, of the ISA (Socioenvironmental Institute - Instituto Socioambiental), the text discusses the introduction of a connection between forest and weather into the climate change agenda. The feature is fostered by a group of tropical countries led by Papua New Guinea. The Brazilian government will present an important proposal at the Conference of the Parties, to take place in November in Nairobi, Kenya, for the compensated reduction of deforestation. The idea is to create an appropriate mechanism to handle the feature of the forests in the context of climate change, despite the American effort to deter negotiations and hinder the efforts to limit greenhouse effect gas emissions into the atmosphere.

October 2005, Amazon region: a desolate image of a boat washed up where there once was a river

The global phenomenon known as the warming of the earth’s atmosphere, which until some time ago was only a theory, has become today an observable reality. Only recently has the current scientific trend recognised a gradual change, with palpable effects in the medium term. More and more scientists are finding that the signs of climate change are manifesting themselves in hurricanes, in the melting of the polar ice caps and in the Amazon draughts. It is estimated that, if the current emissions trend persists, in 2100 the average temperature will rise between 4º and 7º C, with potentially catastrophic social and environmental consequences, including the rising of ocean levels, flooding of coastal cities and large scale transformations in the ecosystem.

Scientific consensus led an absolute majority of the world’s leaders to adopt the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, setting mandatory goals for the reduction of emissions in the Kyoto Protocol of 1997 for developed countries (those included in Annex I of the Protocol – see list of countries at the end of the text). 

The Kyoto Protocol imposes on industrialised nations mandatory limits for the emission of carbon dioxide – the cause of global warming – aiming to reduce it between 2008 and 2012 by 5.2% in relation to the 1990 levels. The Protocol was signed by 166 countries and has been in effect since February 2005. (Read here the complete Protocol). 

In 2005, CO2 emission reductions in the European carbon market reached 2.2 million tons per day. Thus, the first international market of ecosystem services was opened, creating a positive economic value for environmental protection. The good that this market can do for the global environment is potentially huge. This alone would show that Kyoto is working. Progress is evident even where actions are obscured by national policies. For example, California, the largest state in the United States, has vouched to reduce CO2 emissions in the energy and transport sectors, and is being followed by others. In June 2005, the American Senate approved a resolution demanding a mandatory limit on national emissions. 

However, there are serious threats to an international course of action that would promote more effective reduction in emissions. The present US administration, displaying a remarkable cynicism even for diplomatic standards at the top echelons of power, repudiates the Kyoto Protocol, calling it inadequate and offers no reliable alternative. Accordingly, it strives to obstruct negotiations and hinders all efforts to limit emissions. Most nations agree with the principle of mutual and differentiated responsibilities recorded in the UNFCCC – but the feature of when and how large developing countries such as Brazil, China and India will be part of the efforts of international reductions remains vital, as it has the potential of damaging negotiations. Neither the Convention nor the Protocol offer any resources to deal with a source of emissions of approximately the same level as the USA – tropical deforestation, which corresponds to 20% of global CO2 emissions. 

The continuity and effectiveness of the Kyoto Protocol will depend on the adoption of additional goals on the part of the countries in Annex I to reduce emissions after 2012 with regard to those agreed upon for the first period of the agreement. To that end, it will be necessary to install mechanisms that foster a wider participation of developing countries in the efforts to reduce global emissions. 

The concept of “compensated reduction” of tropical deforestation – the idea that tropical countries may reduce national deforestation according to a historic level, so that it allows for financial compensations of internationally marketable carbon – emerged from the polemic debates on forests between the Kyoto and the Marrakech agreements. According to our understanding and analysis, all perspectives in this debate point to considerable growth of the link between forest and climate, as attested by a number of international scientists and specialists. 

There is widespread consensus on a few features until recently considered controversial or unclear. The importance of handling emissions and tropical deforestation as separate from the carbon “sink” sequestration is widely accepted. Scientists, legislators and environmentalists all agree that reducing tropical deforestation is a vital part of any international procedure to reduce emissions – in other words, if the concentrations of atmospheric CO2 should remain below the often motioned level of 450 ppm. It is widely accepted that tropical nations need some sort of economic incentive to reduce deforestation, and that developed countries should compensate those who control it. More importantly, a group of tropical nations led by Papua New Guinea have introduced deforestation in the agenda of the 11th Conference of the Parties and are demanding the means to handle the feature within the context of the UNFCCC. 

Even more important is the Brazilian government’s initiative to present its own proposal at the COP-12 (which is taking place this November in Nairobi) for compensated deforestation reduction. As a consequence, Brazil, which, in addition to being the planet’s largest forest potential, is also its deforestation champion, greatly fosters the international discussions towards an appropriate mechanism to finally manage the feature of the forests in the context of climate change. Even though the Brazilian proposal prioritises the creation of a fund instead of a market mechanism, which would make this compensation more viable, it legitimises and accelerates international negotiations and doesn’t exclude other, more viable,  alternatives. 

Much of the controversy surrounding the forests and sinks since Kyoto has arisen from the fact that the quantitative reduction goals were negotiated there before they came to an agreement on the means through which they might be reached. Therefore, to include sinks and arable lands meant to reduce the goals already negotiated. Handling tropical deforestation within the context of emission reduction goals post 2012, on the other hand, adds to the total emission reduction and benefits the atmosphere. 

Negotiators should start a comprehensive assessment of how the reductions of all sources may be reached. If the countries in Annex I increase their goals and deforestation is also reduced, the atmosphere will benefit. In point of fact, tropical countries could drive greater reductions through compensated deforestation reduction. A group of tropical nations would offer the countries in Annex I compensations and emissions for the second period of the commitment proportionally increasing the level of goals in Annex I. Through these measures, tropical countries would obtain significant rewards, and Annex I would set larger goals creating greater benefit to the atmosphere. 

It is very probable that allowing reduced deforestation in the carbon market might produce initially modest, though not insignificant, compensations. The amounts allowed for sales could be limited through the negotiation. Even though not formally limited, deforestation compensations will not flood the market with a depreciation of carbon prices. For a number of reasons, any effective program of compensated reductions must, initially, be a national program. Furthermore, in all large areas of existing tropical forests, or in potential future areas, governments will need to make important long-term investments in governance structures (monitoring and capacity to keep deadlines, organisation of land ownership, allocation of property rights) before carbon compensations may become an economic alternative for individuals and companies. Neither forest protection nor equitative allocation of carbon rights will take place in deregulated areas with free access.  

Above all, compensated reductions would help governments to control devastating, unproductive deforestation, that is low in value, and to support preservation. It will it be possible only at a later stage to determine up to what point carbon might be an attractive economic alternative for individuals and companies in tropical forests. Since reductions must refer to the basic national line, only nations (national governments) may benefit from the compensation. 

Climate change is already affecting tropical forests, with draughts caused by El Niño sparking forest fires in the Amazon and Indonesia. A few weather models forecast large scale savannization in the Amazon. The perspective of carbon compensation based on deforestation has increased concern on the permanence of the reduction of this activity. Modelling exercises that show large scale savannization are, however, based on projections of trend emissions – if reduced deforestation helps directly or indirectly to lower emissions, the trend will change. 

Besides, living forests have multiple interactions with the climate system well beyond its carbon content. The Amazon, for instance, the world’s largest extension of tropical forest, releases about 7 trillion tons of water per year into the atmosphere through evapotranspiration providing the vapour that keeps the regional weather wet and rainy. The conversion of water into vapour also cools the air. Protecting forests will preserve these stabilising interactions of the climate, as well as reduce slash and burning. 

Fundamentally, however, the risks of using reduced deforestation for carbon compensations must be weighed against the cost of not doing anything – or of waiting for the official assistance programs that have never reached the necessary scale to impact deforestation rates to rise suddenly and expressively. The largest official program intended to handle deforestation in Brazil, the G7 Pilot Program, was originally estimated to cost $250 million dollars along five years (even though, in reality, the program invested that amount over ten years). If Brazil reduced deforestation to 10% below the annual average of the 80’s in the five years between 2008-2012, and were then capable of selling these reductions at the current market prices in the European Union for the reduction of certified emissions, it would make $2.47 billion dollars. 

However, this potential gain would only mean that the international community would play a more significant part in the high cost that the country has paid for deforestation. In order to go on producing commodities which usually are geared towards the international market, Brazil has been losing a great deal in biodiversity and with the potential value of the devastated forest resources, as well as paying for the control actions and social impacts arising from deforestation, such as, for instance, the grave damage burning has caused to public health. 

The largest obstacle today for the progress of the climate negotiations is the refusal of the present US administration to join in, based largely on the allegation that Kyoto has done nothing to reduce large emissions by developing countries. If the international community adopted a principle such as compensated reductions, this objection would be exposed as a pretext for the US, and the momentum for meaningful American action might increase. 

Stopping or reducing deforestation may contribute to the continuity and strengthening of a powerful and widespread international course of action to reduce post-2021 emissions and vice-versa. Nothing could do more to preserve the planet’s biologic diversity. More dangerous for the global climate system than any leakage features or permanence of compensations for reduced deforestation is the perspective of failing to sustain a mandatory international system of emission reduction and a prosperous market for ecosystem services, as well as failing to incorporate a growing number of nations into it. As a voluntary mechanism that offers substantial incentives for the largest developing countries to reduce emissions through the means of their own choice, deforestation compensated reduction suggests a means among many that will be necessary to help revert the global climate crisis while there is still time. 

ISA.