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Press release from the Center for International Forestry Research (CIFOR)
Quote:JAKARTA (5 June 2009)—A new report published today provides compelling evidence that paying to conserve billions of tons of carbon stored in tropical forests could also protect orangutans, pygmy elephants, and other wildlife at risk of extinction. The study, published in the peer-reviewed journal Conservation Letters, is one of the first to offer quantitative evidence linking the drive to reduce carbon emissions from forests with the push to preserve threatened mammal biodiversity.“Our study clearly demonstrates that payments made to reduce carbon emissions from forests could also be an efficient and effective way to protect biodiversity,” said Oscar Venter, a biologist at the University of Queensland in Australia and the study’s lead author. “We now need to see policy discussions catch up with the science, because at the moment the potential co-benefits of linking forest protection to biodiversity are not getting the attention they deserve.”
Researchers from the Center for International Forestry Research (CIFOR), one of 15 centers supported by the Consultative Group on International Agricultural Research (CGIAR), together with scientists from the University of Queensland, The Nature Conservancy and the Great Ape Trust of Iowa, examined the potential role of carbon payments in protecting 3.3 million hectares of tropical forest land in Kalimantan (Indonesian Borneo).
The report, “Carbon Payments as a Safeguard for Threatened Tropical Mammals,” considered the emissions that would be released into the atmosphere as carbon dioxide (CO2) if the forest was cleared for development. Based on prices now being paid for CO2 credits on global markets, they compared the revenues that could be derived from protecting the forest and thus avoiding a large amount of carbon emissions, to the revenue that would be derived from converting the forest to oil palm plantations.
They found that if CO2 credits could be sold for US $10 to $33 per tonne, conserving the forest would be more profitable than clearing the land for oil palm. In addition, forest conservation would prevent 2.1 billion tonnes of carbon from entering the atmosphere and preserve the habitat of some of the world’s most threatened mammal species living in these forests.
The study determined that 40 of Kalimantan’s 46 threatened mammals occur within areas slated for oil palm development. Further, planned oil palm plantations in peat forest areas, where carbon is most abundant (and therefore cheapest) contain almost twice the mammal species density as more expensive areas. In other words, there is a synergy between areas with high levels of biodiversity and areas with an abundance of forest carbon.
Proposals to use carbon payments to conserve forests will be a major topic at the United Nations Climate Change Conference scheduled for December in Copenhagen. Among other issues, negotiators will be discussing the creation of a global framework to Reduce Emissions from Deforestation and forest Degradation (REDD). Under a REDD scheme, countries that reduce their deforestation rates could gain credits for reduced emissions, which would be sold on an international carbon market or compensated through an international fund. Advocates of this approach hope that the co-benefits of these kinds of mechanisms, such as saving endangered species, could boost their appeal.
“REDD offers important win-win opportunities for climate and biodiversity protection,” said Frances Seymour, Director General of CIFOR. “Ultimately our goal is to help fashion an agreement in Copenhagen that will allow tropical forests to become a part of a more comprehensive climate agreement-–one that will reduce emissions, as well as produce co-benefits. There is already a good case to be made for ending the exclusion of existing forests in the next climate pact. This new evidence shows just one of the many benefits that a REDD accord could have.”
Deforestation and forest degradation account for 20 percent of annual greenhouse gas emissions – more than the emissions from the world’s entire transport sector. Forested peat lands are particularly rich with carbon and the region studied in the report, Kalimantan, has nearly 6 million hectares of peat forest land.
The study focused on Kalimantan because of its significance to Indonesia’s oil palm industry, its biological diversity, and its wealth of carbon-rich peat lands. Recently, Indonesia has overtaken Malaysia as the world’s biggest producer of palm oil and Kalimantan is the current frontier for oil palm development, according to the authors of the study.
The authors noted that overall, for the forest areas studied, carbon credits could be made competitive with oil palm if they could be sold on the carbon markets that emerged as part of efforts to comply with emissions targets tied to the 1992 Kyoto Protocol. This agreement expires in 2012. Kyoto compliance markets allow countries and industrial polluters to meet government-mandated limits on carbon emissions by purchasing credits tied to reductions achieved elsewhere. These credits fluctuate in value but currently sell for around $20 per tonne of CO2, or around $73 per tonne of carbon. However, carbon stored in existing forests is not currently traded on the Kyoto markets.
Forest-based carbon credits can be sold today on what are known as voluntary carbon markets, where governments and private companies can voluntarily offset their emissions through the purchase of credits. The price on these markets also varies but is currently between $1 to $2 per tonne of carbon dioxide. Even at this low price, there is so much carbon per hectare in the carbon rich peat forest of Kalimantan, that it would be worth more preserved than developed for oil palm, said Douglas Sheil, a co-author and former CIFOR scientist, who is currently serving as director of the Institute of Tropical Forest Conservation in Uganda.
“This tells us that even a REDD mechanism that sells carbon at a relatively low price could carry benefits for both climate change and biodiversity in some very important areas,’ said Sheil. ‘Now we need to see if these opportunities exist in other regions.”
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About CIFOR: The Center for International Forestry Research (CIFOR) advances human wellbeing, environmental conservation and equity by conducting research to inform policies and practices that affect forests in developing countries. CIFOR is one of 15 centres within the Consultative Group on International Agricultural Research (CGIAR). CIFOR’s headquarters are in Bogor Indonesia. For more information, please visit http://www.cifor.cgiar.org/
About the CGIAR: The CGIAR, established in 1971, is a strategic partnership of countries, international and regional organizations and private foundations supporting the work of 15 international Centers. In collaboration with national agricultural research systems, civil society and the private sector, the CGIAR fosters sustainable agricultural growth through high-quality science aimed at benefiting the poor through stronger food security, better human nutrition and health, higher incomes and improved management of natural resources. For more information, please visit http://www.cgiar.org.
And here, a press release from WWF:
Quote:A survey of investors with approximately US$7 trillion of assets under management has shown significant support for an expanded carbon market mechanism which would address the estimated 20 percent of global carbon emissions due to deforestation and forest degradation.But the 2009 Forest Carbon Investor Survey, conducted by the Brunswick Group on behalf of the WWF Forest Carbon Initiative, found investors looking for initial public financing viable policy frameworks, and more certainty from both international agreements and national legislation, before private funds can be mobilized.
The investment community is looking to December’s UN Climate Conference in Copenhagen to add substance to REDD (Reduced Emissions from Deforestation and Degradation) as the over-arching policy framework for combating forest related emissions.
“Any global deal on climate change must take into account the significant role forests play in combating global warming,” said James Leape, Director General, WWF International. “If strong policies are put in place to ensure real reductions in emissions and real benefits to forest communities, investors can play a key role in supporting REDD.
“Agreement in Copenhagen – coupled with progress on national initiatives – will be a signal to investors that REDD can and will succeed, and will ensure forests are more valuable standing than cut down.”
The key findings from in depth interviews with 25 senior institutional money managers, sell-side analysts and specialist sustainability investors in Europe, the U.S. and Asia-Pacific are:
- There is significant potential for a multi-billon dollar expanded carbon market, however substantial preconditions still need to be met for REDD to succeed
- Agreement at Copenhagen and legislation in key countries including the U.S. are crucial pre-requisites
- Public sector funding will be vital before a market-based approach can take effect
- Problems of verification and monitoring can be addressed if there is a strong political framework in place
- National governments must put in place robust and durable legal frameworks to create certainty for investors
The survey found investors have a high degree of knowledge about REDD and see strong potential in a future carbon market. However, they are also unlikely to invest in the market without clear political commitment, funding and on-the-ground implementation by key developed and developing countries.
The investors also believed that a compliance market in forest carbon would provide powerful incentives to reverse deforestation in forest countries
More than one-third expect a forest carbon market will evolve from a voluntary to a compliance market over the next five to fifteen years if certain conditions for a market-based approach can be met. This will require action from governments, including public sector funding, to lay the foundation for the market and support efforts by forest nations to build legal and technical capacity for REDD.
Key milestones sought by investors are agreement at the Copenhagen climate talks with support from major economies such as China and India, as well as the passage of U.S. climate change legislation. A strong legislative framework in forest countries is seen as core to addressing problems of verification and monitoring that have hampered agreement on REDD in the past.
Investors have a favorable view of proposals on REDD, supported by WWF, which recognize the value of a phased approach including pilot projects.
"REDD is critical to a climate solution, and finance is critical to making REDD work,” said Donald Kanak, Chairman of WWF’s Forest Carbon Initiative. “In the long term, private capital could play a major role, if certain conditions are satisfied. We need governments to step up to create sufficient financing in the near term to support forest countries’ efforts to become REDD-ready."
Kanak presented the survey results (summary attached) as negotiators met in Bangkok in a lead up session to the Copenhagen climate change talks convened by the United Nations Framework Convention on Climate Change (UNFCCC). The survey presentation was followed by an expert panel discussion which included: Prof. Dr. Singgih Riphat of the Ministry of Finance, Republic of Indonesia, and Mr. David McCauley of the Asian Development Bank.
Investors ready for forest carbon market if Copenhagen and countries supply certainty
– from this page, you can download a summary of the survey findings
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