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Rainforest Conservation More Profitable Than Palm Oil Production

June 5, 2009

Writing in the peer-reviewed journal Conservation Letters on Friday, researchers noted that a system of selling credits to reduce carbon emissions in the Indonesian rainforest could provide a feasible method of conservation.

Authors of the new report stated that paying to reduce rainforest carbon emissions could actually amount to more income than initiatives to use the deforested land for palm oil production.

Lead researcher Oscar Venter, from the University of Queensland, focused his study on Kalimantan, a forested region in Indonesia where plans for deforestation for palm oil production have been under scrutiny.

“Our study clearly demonstrates that payments made to reduce carbon emissions from forests could also be an efficient and effective way to protect biodiversity,” said Venter.

“We now need to see policy discussions catch up with science because at the moment the potential co-benefits of linking forest protection to biodiversity are not getting the attention they deserve.”

Palm oil is derived from the fruit and kernels of the oil palm. It naturally contains a high amount of beta-carotene, and is widely used in margarine, soaps and as a feedstock for biofuel.

One proposed method to reduce emissions would involve providing countries with necessary funding or allow them to gain credits for emission reductions. The credits would be sold on an international carbon market to companies that have exceeded their allotted carbon cap, said the Associated Press.

Venter and colleagues found that a system involving credits would be more profitable than the UN’s proposed Reduced Emissions from Deforestation and Degradation (Redd) initiative that involves deforesting the land for palm oil production.

The finding was based on the assumption that credits would be sold for $10 to $33 per ton. The current rate per ton is about $20.

“This is the break-even price if oil palm can only be grown in areas that are at least moderately suitable, or if some oil palm can be relocated to already [deforested] areas. Any price over [that] means Redd becomes more profitable than oil palm,” said Venter.

“Carbon markets, while they fluctuate, are where the price of carbon is currently established. So we compared our prices to prices on major global markets, which at the time were selling carbon for around $30 per ton of CO2.”

“If Redd does become part of the next international climate agreement, it will have the potential to fund forest protection in areas slated for oil palm conversion.”

William Laurance, a scientist from the Smithsonian Tropical Research Institute in Panama, told BBC News: “Tropical forests are disappearing at an incredible pace – the equivalent of 50 football fields a minute, imperiling biodiversity and creating massive carbon emissions that are degrading our global climate.”

“At present prices for carbon, we won’t be able to stop rainforest destruction for oil palm,” he said.

“Redd will only be competitive for slowing destruction of peat forests, which are jam-packed with carbon and become massive sources of greenhouse gases when cleared.”

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