A Price On Carbon Not Enough To Save Rainforests

Representatives from 190 countries are currently gathered in Poznan, Poland, for the UN-led negotiations on climate change. Reduced emissions from deforestation (RED) is one of the top issues and hopes are high that a climate protocol could help reduce deforestation in the tropics in the future.

Carbon dioxide emissions from tropical deforestation at present account for around 20 per cent of total global emissions, on a par with emissions from the transport sector. Currently there are no incentives for tropical countries to reduce these emissions, although this could change if the emissions are included in a future climate protocol.

"It is argued that this would make forest clearance unprofitable and tropical countries would choose to preserve more of their remaining forests. However, a carbon price will also increase the demand for bioenergy and make forest clearance for agricultural land more profitable," says Martin Persson, researcher at the Department of Energy and Environment at Chalmers University of Technology, Gothenburg, Sweden.

A new study by Martin Persson and Professor Christian Azar shows that clearing tropical forests for palm oil plantations, producing both liquid and solid biofuels, will remain highly profitable even when faced with a price on the carbon emissions arising from deforestation. The current efforts to include tropical deforestation in a future climate regime may therefore not be sufficient to protect the world's tropical forests.

The expansion of palm oil plantations is already an important driving force behind deforestation in South-east Asia, although the proportion of palm oil that goes into biodiesel production is still small. In addition, with increasing profitability there is a risk that palm oil plantations will also start to expand in the Amazon and Congo basins, areas with a large share of the world's remaining tropical forests.

"These results should not be taken as an argument for keeping tropical deforestation out of a future international climate regime. That would only make matters worse. But it implies that in addition to a price on the carbon emissions from deforestation, other and stronger protection measures will still be needed," Martin Persson concludes.

Report abstract: Making Trade-offs In The Greenhouse: Relative Price Changes, Non-CO₂ Greenhouse Gases And Tropical Deforestation In Climate Policy