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As Forest Deal Nears, New Index Maps Profit Potential in Trees

17 December 2009 3:32 pm
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FCI_Score.jpg

One of the major developments likely to come out of the Copenhagen climate talks tomorrow is a global agreement to reduce emissions from deforestation and degradation of forests (REDD). A new index, launched yesterday in Copenhagen, now provides policymakers and investors with information on which of the world’s regions will give them the most bang for their buck when selecting forests for conservation.

“The Forest Carbon Index (FCI) estimates the potential of every square kilometer of terrestrial land to generate carbon credits by either avoiding deforestation or by growing new forests,” said Erin Madeira, one of the architects of the project at Resources for the Future (RFF), a non-profit environmental organization in Washington, D.C. It maps out one-and-a-half-million grid squares, each 85.5 square kilometers in size. (The graphic shown here indicates the Index values for an area of Africa, with sections that represent the best investment for REDD in green).

By compensating developing nations for not cutting down these trees, wealthy nations could cover many billions of tons of their required reduction in carbon emissions by 2020. The Index could help nations focus these efforts. It involves 20 geodatasets on national scales and six on subnational scales. These were mapped out each nation’s potential to attract foreign investment in its forests, based on possible profits and risks.

The results suggest that gains are to be made if early investment is focused on the Amazon of Brazil and Peru, Malaysia and Indonesia by 2020. These are all countries with relatively good governance and major deforestation, giving them a high score on the index for potential investment. The index lays out where in each country developing nations are most likely to profit and for how much.

The cost of reducing emissions from carbon in these forests will be just over half the projected cost of reducing emissions back home in developed nations, the study says. But to fully “unlock these climate solutions and cost savings, global payments for forest carbon will need to be $15-20 billion annually through 2020,” it notes. Over that period, as much as $40 billion could be saved by obtaining the reductions from forests as opposed to renewable energy and shutting down powerplants. “By mapping the theoretical profit potential, the Index identifies some of the most promising places in the world where one could manage forests to mitigate climate change,” says Adrian Deveny, lead author for the Index, in a statement.

“One of the challenges overcome by the [Index] is combining data that are available only at different scales. This is a welcome addition and is nicely complementary with existing work,” said Andrea Cattaneo, a senior scientist and economist at the Woods Hole Research Center in Falmouth, Massachusetts, who was not involved with the effort.

Bernardo Strassburg is a researcher at the University of East Anglia in the United Kingdom and the Institute for Global and Applied Environmental Analysis in Brazil, who published his own work this week arguing that REDD should take biodiversity into account along with carbon content. FCI “is an interesting idea that should be pursued further, but it could use some refinement,” he said. “There could be substantial [REDD] co-benefits with biodiversity to be explored, and I'd love to see an index that captures that too.” Andrew Mitchell of the University of Oxford in the United Kingdom said that the index could be improved by adding variables like “transparency and institutional strength; biodiversity and ecosystem services.”

“Indexes and forest footprint disclosure are key opportunities to attract new businesses into managing down their unsustainable use of natural capital,” said Mitchell. “Those that do will acquire first mover advantage in an emerging 21st century economy, which will increasingly price environmental impacts, such as damaging climate change, into the cost of goods that smart governments or consumers will increasingly demand.”

In other news, it appears as if the higher-level negotiations at Copenhagen are closing in on a REDD agreement. Many sections of bracketed text have been removed, including an issue about indigenous rights. Remaining issues are whether countries can get credit for conserving forests on a project-by-project basis or if they have to report national totals—and the question of adequate finance from developed nations, said Daniel Nepstad of the Woods Hole Research Center, currently in Copenhagen for the COP15 meeting. Another minor point of contention is that Saudi Arabia is now asking why—if tropical nations are being compensated for reducing deforestation—they aren’t being compensated for not pumping oil from the ground. “These issues can probably be resolved,” says Nigel Purvis of Resources for the Future. The question is whether countries will want this to move forward when nearly every other part of the negotiations are unresolved.

Nepstad has been working to develop REDD programs in Brazil. He says that—in readiness for a deal—four states in Brazil have already taken on the formal targets for reducing deforestation by 2020, and there are also signs that ranchers in the Amazon are hanging on to patches of forest waiting to “know if they will be worth more alive than dead.”

Photo Credit: Forest Carbon Index

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