October 9, 2008

Polluters May Pay Tropical Communities For Carbon Emissions

Carbon brokers are devising a plan in which greenhouse gas polluters in rich countries would pay tropical communities in exchange for slowing deforestation.

"It's a bit of a minefield," said Michael Brune, the executive director of nonprofit group the Rainforest Action Network.

Brune added that although enforcing laws would be difficult, "But I would say the benefits outweigh the threats."

Deals between greenhouse gas polluters and developing countries have been encouraged by new data which shows the burning and clearing forests to create everything from pastures to palm oil plantations, in areas from the Amazon to Aceh province in Indonesia, releases nearly 20 percent of the world's greenhouse gas emissions.

Tropical communities could stand to gain billions of dollars if the deal were made official, and large amounts of carbon dioxide could be saved from reaching the atmosphere.

However, some risks are involved, including difficulties in monitoring forest preservation, the planting of forest stands that lack biodiversity, and backlash from local groups.

In Barcelona on Wednesday, an international alliance including 250 representatives from business, trade unions forestry companies, governments and local and indigenous peoples, laid down guidelines for such trade.

The alliance advised that the ultimate goals should include efforts to curb poverty, strengthen land rights, safeguard indigenous peoples, improve forest management and should not be a substitute for deep cuts in industrial emissions of greenhouse gases by rich countries.

One possible problem is has been exhibited in Brazil, where some nongovernmental organizations and companies have been accused of the illegal collection of indigenous biomedical knowledge from forests for production abroad of new drugs and other useful products.

"There are a few companies and NGOs linked to biopiracy," said Brazil's environment minister Carlos Minc, who won the United Nations Global 500 Award in 1989 for his conservation efforts. "But they are the overwhelming minority."

Ross MacWhinney, a broker at New York-based Evolution Market, LLC who works on forestry finance, said such a deal would demand that certain risks be addressed. Risks such as disease, fires and illegal logging could threaten the forests, and in turn, investments in them.

He said groups such as the Voluntary Carbon Standard are working on improving practices in carbon markets. One method is to create a buffer into which would go a portion of forestry deals. If projects prove over time that they are preserving forests, they would receive funds back from the buffer pool.

"It provides incentives for competent management of the forests," said MacWhinney.


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