Developing nations around the world would be given incentives over the next 100 years to preserve their forests under a new proposal to curb deforestation and slow global climate change.
Speaking after the conclusion of the UN Climate talks in Ghana, Barry Gardiner MP, Chair of the Forestry Dialogue for GLOBE International, and the UK Prime Minister’s Special Envoy on Forestry, said: "I applaud the UNFCCC negotiators for getting forestry onto the agenda and accepted by all parties as a vital part of the climate talks. However, it is crucial we now develop a model which delivers maximum benefits to all countries."
Mr Gardiner has proposed a new system of tree-centered financial markets. The system would allow countries to be issued credits over a 100-year cycle, more closely reflecting natural life-cycles of forests.
Every year a country’s total standing forest would be measured and the country authorized to issue credits corresponding to 1% of measured stock. This means that over the 100 year cycle the total forest cover would be accounted for.
The link between the forest and the credit is both positive and direct, Mr. Gardiner says. Deforestation at a higher rate would result in a lower reward the following year. Afforestation or deforestation at a lower annual rate would result in greater reward.
Restricting the release of credits to 1% also prevents the danger of flooding the market with carbon credits. In addition, credits would be limited to a 10-year life span to avoid traders hedging them long into the future and tightening the opportunities for arbitrage–the older the credit became the potentially less valuable it would become.
"This means creating a market which pays for forests – actual standing stock–and not just avoided deforestation, as is the current model. Politicians must regulate the trading structures so that the financial markets can be used to benefit forests, not structure regulations so that forests can be used to benefit the financial markets."
Under Gardiner’s system, the new credits available would fluctuate each year in proportion to forest cover. Developed countries wishing to offset their carbon emissions by use of these credits would therefore find it less rewarding as forest cover declines but more valuable where forest cover expands. Thus, the market is made to work for forests, not the other way round.
Mr Gardiner has laid out a set of proposals in an article, titled "Paying for Forests," to contribute to GLOBE International’s Commission on Land Use Change & Ecosystems, which will be formally launched at its first meeting to be held in the Mexican Congress in November 2008. One area the Commission will consider is how forestry is currently being addressed within the UNFCCC negotiations.
"It is crucial we begin discussing these alternative models now, before the next UN talks in December. What we have to develop is a system which is fair for all countries, not just those with higher rates of current deforestation. We need to equally incentivise those who have already instituted conservation programmes, not penalise them for protecting their own habitats and forest cover. The system we are suggesting works equally well for the Congo, Gabon or Ecuador as it does for Brazil or Indonesia," Mr Gardiner said.
The article "Paying for Forests" is available online.
GLOBE is the Global Legislators Organisation for a Balanced Environment (www.globeinternational.org). It consists of senior cross-party members of parliament from all G8 countries and the +5 countries of Brazil, China, India, Mexico and South Africa. GLOBE shadows the formal G8 negotiations. It’s objective is to support ambitious political leadership, on issues of environment and sustainable development, from G8 leaders and the leaders of the major emerging economies. This is achieved through the development of high level negotiated policy positions from leading legislators from across the parliaments of the G8 and +5 and informed by business leaders and key international experts.
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