Remember ’debt- for-nature’ swaps? How about the hectare of Peruvian forest worth more than a small Toyota or Ben and Jerry’s ’Rainforest Crunch’ ice cream?
Paying people to plant trees or conserve forests to slow global warming makes a little more sense. Even so, a lot of people have unrealistic expectations about the long-term possibilities that carbon markets offer for conserving forests. If the Convention on Climate Change ever manages to put in place a system of international payments to support tree plantations, forest conservation, and reduced impact logging the amount of money involved is likely to be well below the initial optimistic estimates. Moreover, it might last for only a few decades until much cheaper ways of reducing carbon emissions come on line thanks to new energy technologies.
For much the same reason opponents of such payments have probably exaggerated the potential dangers. As long as the amounts of money remain modest, it seems unlikely that companies will plant millions of hectares of large-scale monoculture tree plantations simply to get the subsidies. Legitimate concerns about equity remain, however, since big utilities companies in the developed countries may find it easier and cheaper to make deals with a few large landholders than thousands of small farmers.
This more sober perspective comes from a recent paper by Joyotee Smith, Kalemani Mulongoy, Reidar Persson, and Jeffrey Sayer titled ’Harnessing Carbon Markets for Tropical Forest Conservation: Towards A More Realistic Assessment’. The authors estimate that the size of the total market for forest carbon is unlikely to exceed five billion dollars yearly and could be as low as 300 million dollars. Currently, in many cases tropical forests provide the most cost-efficient alternative for reducing the amount of carbon in the atmosphere but that may change in the next few decades as countries increase their fuel efficiency and switch to renewable energy sources, natural gas, and hydrogen. Many investors consider it difficult to show that protecting or planting a specific forest actually reduces the total amount of carbon in the atmosphere rather than simply leading to another forest being cleared or not being planted somewhere else. Moreover, unlike reducing industrial carbon emissions, most forest projects only delay the release of carbon into the atmosphere, they do not prevent it.
For all these reasons and more, the authors conclude that carbon markets will not provide a ’magic solution’ to forest problems. They probably have a contribution to make but mostly in contexts where they offer a small additional incentive to alternatives that are fundamentally economically, socially, and environmentally sound and a broader set of policies exist that can sustain these alternatives after the payments end.
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