A Deal to Save the World's Forests—and Create a Multibillion-Dollar Industry

Kentucky rain forest

Three billion people burn wood for fuel every day. Trees fall in the Amazon for cattle ranching and in Indonesia for palm oil plantations. The death of forests is the second leading cause of global warming and an ecological disaster in itself. After several years of negotiation and speculation, the UN is set to reach an agreement this week that would put in place a market-based solution—allowing poorer countries to be compensated by richer ones for choosing to spare their forests. This means creating a new kind of carbon credit: "Reduced Emissions from Deforestation and Forest Degradation," or "REDD+."

The logic of carbon credits or offsets doesn't sway everyone. A would-be REDD project must prove that the tree they're "saving" would otherwise be cut down, ensure that saving one tree won't lead to two trees being cut down somewhere else, and that a tree being "saved" one year won't burn down the next. In the few years since this idea first got bandied about, innovative financial instruments have lost some of their luster, and the REDD program faces protests from the left in Cancun, where the UN convention is meeting.

The bigger problem is that a mandated trade in carbon credits is dead for now in the U.S., causing the collapse of voluntary carbon markets in its wake, which makes it hard to see how any such a scheme could get off the ground.

At the same time, $4.5 billion in forest donations is already on the table from countries like the U.S. and Norway, to countries like Brazil and Indonesia. Fast Company reported on the types of companies that are poised to take advantage of a trade that could eventually reach $25 billion annually. These global entrepreneurs are strange combinations of foresters, financiers, and development experts. In order to dissuade the rural poor from cutting down trees in their own villages, it's necessary to give them something else productive to do for a living, not to mention a better way to boil their water, cook their food and heat their homes. Hence the growing movement for cleaner stoves in the developing world. An infusion of REDD+ money, whether in the form of credits or straight-up donations, could go a long way toward paying for these improvements.

[Image by Nastia]

Add New Comment

0 Comments