Global environmental challenges
A market in forests?
Fighters for “No Climate Protection without Forest Protection – last exit Copenhagen ” were in Frankfurt to promote forest conservation ahead of the global climate meeting in Copenhagen at the end of 2009.
Their appeal to investment circles and government institutions in Germany’s business capital was fresh and vigorous. Each year, forests the size of Bavaria disappear, they said. Logging for profit and to open land for arable crops contributes to about 20 percent of worldwide greenhouse gas emissions, and substantial parts are not legal.
Avoid it now to save the planet, they said — is it not weird to be able to look at the world via Google Earth but to be totally powerless when it comes to watching its biodiversity being destroyed?
The event was supported by the David & Lucile Packard foundation and the Global Canopy Programme. They are among supporters of an initiative called Reducing Emissions from Deforestation and Degradation (REDD).
And much more is unclear. Who monitors and polices the avoidance of trees being cut and who pays for it — new asset classes such as forest gilts may make sense. Or there could be market-based forest funds, financed via auction revenues. But nobody knows yet who should get the cash thus generated. And how would one deal with land rights, and with corruption in some of the countries housing forests?
There is even criticism from Greenpeace which has said including forests in established CO2 markets such as Europe’s would flood them and torpedo pricing mechanisms.
Bernd Hansjuergens, co-author of the TEEB report that aims to prove the business case of biodiversity said, “The function of forests is relevant in markets. Consequently they must appear in markets and present a market.”
Is it a market worth having?
(Photos: top left – A truck transports logs cut from Amazon rain forest by workers employed in the Jari Managed Forest Project, February 11, 2008. REUTERS/Jamil Bittar (BRAZIL). Right – A pair of scarlet macaws perch on a tree in Bolivia’s Machia Park in Villa Tunari in the Bolivian Amazon jungle 520 km (323 miles) southeast of La Paz August 17, 2005. REUTERS/David Mercado