This post was co-written with Dorjee Sun, the head of Carbon Conservation, a company that works to protect forests in Indonesia from destruction.


Photo: via Flickr

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Bali, Indonesia, is the perfect backdrop for this week’s climate summit. No country better embodies the immense peril of inaction — and the immense opportunity this meeting has to make massive and immediate progress in stemming the climate crisis.

Indonesia is the world’s third largest global warming polluter, behind the United States and China, and just ahead of Brazil. But in Indonesia, like Brazil and the rest of the tropical world, pollution isn’t coming from factories, power plants, or cars like it is in the industrialized world. Instead, almost all of it is coming from the rapid burning of the world’s vast tropical forests to make room for timber, agriculture, and especially palm oil plantations. (Despite its green reputation, palm oil is anything but: a recent study in Science found that palm oil, like other biofuels, produces two to nine times more greenhouse gases than regular old crude oil because of the forests and grasslands destroyed for its production.)

Companies like Starbucks, Procter & Gamble, Cargill and Seattle’s Imperium Renewables are paying top dollar to turn palm oil into food, cosmetics and biodiesel. That global demand has driven the value of a hectare of palms above $1000 (PDF) in some cases — providing a powerful financial incentive to corporations, investors, and farmers to raze the forests, regardless of the consequences to the climate or to the endangered orangutans, tigers, and rhinoceroses – and indigenous people — who need them to survive.

The Bali conference could immediately eliminate that perverse accounting by making sure forests and other wild lands around the world are financially valued for the carbon they store, and not just their potential as timber or agricultural land. The way to do that is to allow polluters to get credit for protecting forests that they can apply against their pollution reduction obligations, an idea called carbon ranching or avoided deforestation.

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Polluters would jump at this opportunity. Protecting forests from destruction can cost as little as 75 cents per ton of carbon dioxide – even at higher costs, it’s a fraction of the price (PDF) of cleaning up most industrial pollution. In the past, some environmentalists criticized carbon ranching for this very reason: they were concerned that if polluters focused their greenhouse gas reduction efforts on forest conservation, that would divert money from necessary clean-ups in industrial pollution. That’s the wrong way to look at it. Because locking up carbon dioxide by protecting forests is so cheap, it means that the world can achieve bigger reductions in global warming pollution faster and for less money. Carbon ranching should be an argument for bigger immediate pollution reductions, from both forests and industry, not a way for polluters to get around their responsibility to clean up their own pollution.

Another concern is what’s known as leakage (PDF): the idea that if you protect one parcel of forest, ranchers, loggers, and biofuel interests will just move their operations elsewhere, resulting in little additional protection. That worry, however, can be addressed if the forest protection project is global in nature, as the Bali conference is considering. If forests and other wildlands everywhere are valued for the carbon they store, it means that loggers, ranchers, and agribusiness everywhere will for the first time have to include environmental costs in their bottom line calculations — and not just move their operations to an area with loose environmental protections. That will have a major side benefit, shifting production into areas where it does the least environmental harm.

Finally, there are concerns about enforcement: how can we ensure that once a polluter gets credit for protecting a forest that that forest stays protected? Many of the tropical countries whose carbon-rich forests will be the initial beneficiaries of the program lack the resources to implement existing environmental protections and are plagued by corruption. In many tropical countries, for instance, it’s common for one underpaid forest ranger to have responsibility for an area of land the size of a small American state. And what happens if a government decides not to honor its international commitments — could they just take a polluter’s money, promise to protect a forest, and then let the loggers in anyway?

Fortunately, the unprecedented resources that carbon ranching will bring to forest conservation will provide the means to solve these challenges. Based on current carbon prices on European markets, a hectare of rainforest would be worth more than $10,000 purely for the carbon it stores. Applying just 1/10 of that amount towards enforcement will provide more resources than have ever before been available for forest conservation. In Indonesia, for instance, it could support more than 300,000 well-paying jobs in forest conservation (or one person for every 200 hectares of forest), while still leaving plenty of money for high-tech satellite monitoring. That would help ensure conservation provides permanent benefits and provides a major boost to the local economy.

Further guarantees can be secured through a system in which polluters don’t receive all of the carbon credit at once for protecting a forest, but only get it on an annuity basis — receiving credit for 1/50 or one 1/100 of the carbon stored in a forest per year. If the forest were destroyed, polluters wouldn’t be able to recoup the remainder of their investment — providing the polluters themselves with a powerful incentive to keep the forests safe.

Carbon ranching is a transformative idea whose time has long since come. Policy wonks and polluter lobbyists have spent the last ten years arguing over its merits and working out the details. In the meantime, the world lost (PDF) a whopping 125 million hectares of forest, resulting in a release of more than 50 billion tons of carbon dioxide into the atmosphere. And the biofuel boom has intensified the threat: in Brazil, agribusiness interests — financed by George Soros, Goldman Sachs, and others — are destroying the wildlife mecca of the Cerrado, at a rate of seven million acres a year. In the Congo, charcoal cartels are turning the living forest into fuel — threatening to push mountain gorillas and other wildlife into extinction.

A decision at Bali to immediately give financial value to intact forests (and not wait until 2012, as some are proposing), would end this destruction (PDF) almost overnight (PDF). The world’s climate — and the forests and their creatures — can’t wait for anything less.