Greenpeace: Forests Could Drop Carbon Market Prices
The environmental group Greenpeace said on Monday that carbon market prices could drop by a staggering 75 percent if credits for safeguarding forests are added to markets for industrial emissions, Reuters reported.
A flood of forest carbon credits could also slow the fight against global warming and divert billions of dollars from investments in clean technology, according to the report issued on the sidelines of U.N. talks in Bonn working on a climate treaty.
Roman Czebiniak, Greenpeace International political adviser on forests, said of estimates by Kea 3 economic modeling group in New Zealand, that cheap forest credits sound attractive but a closer examination shows they are a dangerous option.
The Bonn meeting on March 29-April 8 will bring together some 175 nations to discuss measures for fighting global warming.
Topics will include ways to slow tropical deforestation, which accounts for a fifth of all man-made greenhouse gas emissions.
Trees absorb the main greenhouse gas, carbon dioxide, as they grow, releasing the gas when they are burned or rotting. Placing a price on intact trees could help save forests from the Amazon to the Congo basin from logging and land clearance.
Greenpeace claims that forest protection measures in carbon markets would crash the price of carbon by up to 75 percent and derail global efforts to tackle global warming.
The report projected the 75 percent fall in prices to $5.16 per ton by 2020 under current national policies for limiting emissions.
The report also went on to say that countries like China, India and Brazil could lose tens of billions of dollars for clean energy investments if forest protection measures are included in an unrestricted carbon market.
So far, regulators have failed to reach an agreement on a new treaty that would put a price on forest carbon. Theories ranging from carbon trading to new taxes in developed nations have been suggested.
Governments aim to agree on a new U.N. climate treaty in Copenhagen in December.
However, the European Union should not let industry meet its climate goals by funding forest conservation in tropical nations before 2020, according to a European Commission report last year.
The report said that allowing companies to buy avoided deforestation credits would result in serious imbalances between supply and demand, saying deforestation emissions were three times bigger than emissions regulated by the EU emissions trading scheme.
A report earlier this month by New Carbon Finance analyst Aimie Parpia estimated that unlimited use of forestry could cut carbon offset prices by 40 percent by 2020.
However, Greenpeace’s forest proposal hopes to allow industrialized countries to meet a part of their emissions reduction goals by buying cheaper “tropical deforestation units” as an addition to deep cuts in domestic emissions.
Although, such units would not be tradable on markets for industrial emissions, the environmental group said.
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