Politics And Technical Concerns Thwart Efforts To Use Carbon Markets To Halt Deforestation

Carbon credit politics and misplaced technical concerns are impeding efforts to encourage sustainable land use practices in tropical regions—such as better forest management and growing more trees on farms—that could curtail up to 20 percent of global greenhouse gas emissions while also boosting incomes of the rural poor, according to a new analysis by the Nairobi-based World Agroforestry Centre.

"If we want to reduce greenhouse gas emissions as quickly and effectively as possible, we need to do everything we can to encourage the people living in and around the world's tropical forests to adopt carbon-saving and carbon-enhancing approaches to development," said Dennis Garrity, Director General of the World Agroforestry Centre, one of 15 centres supported by the Consultative Group for International Agricultural Research (CGIAR). "One crucial way to do that is to give them the same opportunities to sell their carbon as a commodity in the global market as is encouraged in other sectors."

The analysis will be presented in Poznán, Poland at the influential Conference of the Parties (COP 14), an international gathering of experts working to ensure that the UN Framework Convention on Climate Change (UNFCCC) effectively and fairly discourages activities that boost harmful emissions, while encouraging carbon-saving approaches to development that could halt or at least slow global warming.

The World Agroforestry Centre—also known as ICRAF—advised the COP that efforts to Reduce Emissions from Deforestation and forest Degradation, or REDD, are being unfairly stymied by the fear that officially acknowledging the carbon-saving capacity of forestry and agroforestry would "flood the market" with inexpensive carbon credits.

The market for carbon credits, in which polluters in industrialized countries offset their emissions by paying others for reducing emissions, was valued at $64 billion in 2007, by the energy firm New Carbon Finance. This figure is projected to grow in 2008.

But the credits system is now largely rewarding carbon saved in industrial operations in countries like China and India as policy makers struggle to agree on a plan for accepting carbon saved in tropical forests and agricultural landscapes. In 2008, the World Bank found that Africa accounted for only 1.4 percent of projects in the pipeline of the Clean Development Mechanism, while China took 73 percent and Brazil and India both 8 percent.

The Nobel-prize winning International Panel on Climate Change (IPCC) has estimated that over two billion acres of farmland in developing countries are suitable for more intensive agroforestry, in which farmers cultivate trees or shrubs that provide food, fodder, fertilizer or other valuable products while also removing carbon dioxide from the atmosphere. The IPCC asserts that agroforestry has the potential to remove 50 billion tons of carbon dioxide from the atmosphere, which is equivalent to replacing 1,400 large coal-fired power plants with gas-fired facilities. Meanwhile, ICRAF asserts that allowing farmers to sell that carbon on global carbon markets could generate as much as $10 billion each year for poor people in rural areas.

Industrialized countries are sending mixed signals on the future role of forestry and agroforestry in carbon markets. The European Commission recently recommended against allowing credits for forests in general, though it is not clear what its position will be on agroforestry. The United Kingdom and Norway have been more receptive to the idea of linking developing country forests to carbon markets, as have some influential policy makers in the United States. Influential non-governmental organizations are generally favorable to the inclusion of forestry in future climate regimes, but raise valid concerns about their potential to undermine efforts to devolve rights to forest-dependent people.

The fear that forestry projects would flood the market for carbon credits is one issue blocking the inclusion of agroforestry and other sustainable tropical forestry endeavors in the European Trading System. ICRAF's analysis notes that there are some "legitimate technical concerns" to assigning carbon credits to forest conservation or the conversion of traditional crop lands to agroforestry systems. But ICRAF also contends that the technical challenges are being resolved, and should not be used as an excuse to exclude low-cost opportunities for emissions reduction and emissions offsets that would benefit the poor.

For example, ICRAF has worked with partners to develop a system that uses satellite technology and other approaches to calculate and verify the carbon stored across millions of square kilometers of agricultural land and forests in developing countries.

"Rewarding poor farmers for planting more trees would put money in their pockets while also helping to protect our environment and fight climate change," said Prof. Wangari Maathai, the 2004 Nobel Peace Prize Laureate and founder of the Green Belt Movement International, an ICRAF partner. "These long-term investments would truly benefit the entire global community."

A recent ICRAF study shows that Kenyan farmers who plant an average of 500 fodder trees that provide high-quality livestock feed increase their farm income by $95 to $120 per cow per year. Fodder trees, and other forms of Agroforestry, typically take two to five years to produce a return on investment. Allowing African farmers to sell the carbon trapped by those fodder trees would make the move to agroforestry more financially attractive.

ICRAF also notes that incorporating agroforestry into carbon trading markets offers economic benefits to both industrial countries and poor farmers. For industrial countries, it offers a potentially cost-effective approach to offsetting their carbon emissions.

In addition, a new policy brief by the ICRAF-led Alternatives to Slash and Burn (ASB) Partnership for Tropical Forest Margins shows that agroforestry can help farmers and rural communities to achieve carbon-conserving development. ASB findings reveal that agroforestry systems can store up to 40 percent as much carbon as primary forests, while generating good returns to farmers. Agroforestry development can also reduce pressure to convert primary forests into agriculture, according to ASB.

ICRAF also points out that, overall, placing a monetary value on the carbon stored in forest-rich landscapes has the added benefit of reducing the incentive for practicing destructive land use practices, such as slash and burn agriculture and clear cutting, which waste huge volumes of carbon with little social returns. The right mix of financial and other policy incentives could convince land users to adopt agroforestry systems that not only conserve and sequester carbon but also yield financial returns to poor farmers.

An ASB study found that the local economic benefits of deforestation are extremely low compared to the amount of damage caused, including carbon emissions. The study looked at the financial gains generated by deforestation over the last 10 to 20 years in forest-rich areas of Southeast Asia, Central Africa and the Amazon Basin, and compared them to the value of the carbon that was released. ASB researchers discovered that large amounts of forests cleared for agricultural use earn farmers less than $5 for every ton of carbon dioxide equivalent released, even as low as $0.50 per ton. This is far below what it would have been worth to carbon traders.

"If these forests were being valued for their carbon storage, then it would be clear that cutting them down is not just environmentally destructive, it's bad business," said Brent Swallow, ASB's Global Coordinator. "We understand that pricing the carbon contained in forests and agroforests represents considerable challenges. But it can and must be done. Until land users in developing countries have a real financial stake in the carbon stored in their trees and forests, we will neither halt forest destruction nor deal effectively with global climate change."