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Saving Rainforests: Low-Hanging Fruit

Dec 16, 2009 - Geoffrey Heal - The Earth Institute

This is the twenty-second of a continuing series of essays and interviews from Earth Institute scientists on the prospects for a global climate-change treaty. Check with us daily for news and perspectives, and to make comments, as events unfold throughout the Copenhagen meetings.
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The climate summit offers an opportunity to agree on two concrete policies that should significantly reduce global warming: incentives to end deforestation, and to generate electricity without releasing greenhouse gases. The initiative to save forests looks like it may be the one major accomplishment at Copenhagen, with yesterday’s announcement of an agreement that may be ready to be finalized by the end of this week. The electricity initiative is far less advanced.

Deforestation generates about 20% of greenhouse gas emissions, and is simple to stop. No major investments or complex new technologies are required: all that is needed is to pay landowners more to keep forests intact than they earn from leveling them. As leveling forests usually fetches a pittance, ending the practice is clearly the low-hanging fruit of climate stabilization.

The proposed mechanism to accomplish this is called Reduce Emissions from Deforestation and forest Degradation, or REDD, and it was first formally proposed at the 2005 world climate meeting in Montreal by the organization that I chair, the Coalition for Rainforest Nations. This week, we finally appear to have an almost complete agreement on REDD. We need to ensure that it is approved.

The central point here is that currently forests are worth more dead than alive; the only way a developing country can make money from its forests is to cut them, sell the lumber and use the cleared land for agriculture. This releases vast quantities of CO2. Capturing and storing that carbon, the main role of an intact forest, is by far a higher-value use than lumber and agriculture, yet it is currently unremunerated.

If the international community pays for REDD, we will simultaneously reduce climate change, redistribute income to some of the world’s poorest countries, and conserve many of earth’s rarest and most endangered species. Both the European Union and the United States are currently spending billions of dollars promoting speculative mechanical carbon capture and storage. It would be ironic if they did not also invest in forest conservation, a proven carbon capture and storage technology older than the human race.

Electricity generation is even more significant, producing 30% of greenhouse gases. With carbon-free electricity, we would be able to electrify ground transportation and the heating and cooling of buildings, making these carbon-free too. Put that together with REDD, all these steps would eliminate about 80% of greenhouse gas emissions. According to the Intergovernmental Panel on Climate Change, that is the proportion we need to keep the change in global temperature to about 2 degrees Celsius, generally agreed to be the most we can safely live with.

Electricity, however, is only indirectly on the national and international agendas, through emissions caps and the cap-and-trade or tax systems. These will provide some incentives for using non-fossil energy sources, but not enough. Pricing carbon speaks to the social costs associated with burning fossil fuels, but not to the problems associated with investing in developing new technologies that will be needed to replace it. Investors’ difficulty in recovering research and development costs, plus reluctance to make costly first moves with these capital-intensive new technologies can prevent progress.

Measures needed to encourage decarbonization include feed-in tariffs (requiring utilities to buy renewable energy at set prices) such as those in Germany and Spain; the related idea of renewable portfolio standards, as used in many U.S. states; tax credits associated with renewable energy; and R&D subsidies, as practiced in many countries. It is critical that these be made long-term and stable, as investments in power generation have horizons of at least three decades. The U.S. experience with production tax credits is one definitely not to be repeated: the on-again off-again history of production tax credits has led to an erratic path of investment, crippling the development of a new industry.

Negotiators both domestically and internationally are stumbling because they are following the wrong path. Instead of looking at very complex international agreements that practically redefine the international economic order, they should be focusing on REDD, and electricity that does not release greenhouse gases. It should be possible in Copenhagen to reach agreements on these less contentious matters. This would put world well on the road to combating climate change and to developing an entirely new clean energy sector.

Economist Geoffrey Heal teaches at Columbia’s School of Business, and its School of International and Public Affairs. He is chairman of the board of the Coalition for Rainforest Nations.


Updated: 2016/06/30

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