Climate Change and Forests: Emerging Policy and Market Opportunities

Chapter 16. Compensated Reductions: Rewarding Developing Countries for Protecting Forest Carbon

Tropical forests store 200 billion tonnes of carbon (200 petagrams [Pg] C) globally.1 Deforestation is releasing these stocks into the atmosphere, and both regional and global feedbacks could cause massive carbon emissions, contributing to global warming and the collapse of the ecological equilibrium of tropical forest ecosystems.2 In Amazonia, for example, one-third of the forest could be transformed into savanna.3 Although greenhouse gas (GHG) emissions from the burning of fossil fuels are the principal cause of global warming, tropical deforestation causes approximately 18 percent of annual global emissions of carbon dioxide (CO2).4 A consensus now exists in the international community that to avoid “dangerous interference” in the global climate system—the primary objective of the United Nations Framework Convention on Climate Change (UNFCCC, article 2)—tropical deforestation should be greatly reduced.5 The Kyoto Protocol, although an important step for reducing GHG emissions, has no means of addressing tropical deforestation. In order to ensure that atmospheric CO2 concentrations remain below 450 parts per million by volume (ppmv) by 2100 and to avoid “dangerous interference,” annual global emission reductions must be greater than 2 percent per year starting in 2010.6 Given the inertia of global power consumption and costs of changing the energy matrix, it is likely for both developed and developing countries that large emission reductions (>2 percent per year) from fossil fuels will be Compensated Reductions: Rewarding Developing Countries for Protecting Forest Carbon stephan schwartzman and paulo moutinho 16 227 unrealistic in the short term. Reductions in tropical deforestation, however, may be a bridge to technological transformation, offering a viable, cost-effective means by which to begin reducing GHG emissions before the technology needed to transform the energy and transportation sectors globally is developed. In this chapter we present a brief analysis of GHG emissions from deforestation in Amazonia and describe “compensated reduction,” a mechanism for addressing deforestation in the context of the UNFCCC. Through this mechanism, developing countries, in which most standing forests are located, could be compensated through international emissions trading for emission reductions from avoided deforestation below historical baselines.7 Amazon Deforestation and GHG Emissions During the 1980s, deforestation in Latin America alone produced a net carbon flux into the atmosphere on the order of 0.3 Pg C a year. This amount rose to 0.4 Pg C a year through the 1990s as a result of additional deforestation of more than 4 million hectares a year. Of this total, 0.2 Pg C resulted from deforestation in Brazilian Amazonia. Real emissions were certainly higher, because emissions from forest fires and logging were not included in the calculation.8 The estimated contribution of forest fires to GHG emissions from the Brazilian Amazon during the 1998 El Niño was 0.2 Pg of carbon. In that year, 30 percent of the forests in the region were at high risk from fire; 1.3 million hectares of standing forest burned in the state of Roraima, and another 2.5 million hectares were affected by fire in southern Pará and northern Mato Grosso. More recently, Asner and colleagues estimated that 0.1 Pg C a year is released by logging activities in the Brazilian Amazon, although there is still no clear idea of carbon volumes absorbed by regeneration of vegetation after selective logging.9 In addition, deforestation may be eliminating part of the carbon sink function of the forest. Deforestation emissions in regions with large areas of remaining tropical forest are expected to continue at current rates or to increase in coming decades. It should not be assumed that once currently accessible forest regions are deforested, emissions will decline, because currently inaccessible regions will become accessible with frontier expansion. Over the next 100 years, between 80 and 130 Pg C will have been released into the atmosphere by tropical deforestation, an amount equal to or higher than, for example, the entire carbon stock stored in the Amazon forest.10 In the Brazilian Amazon, annual deforestation rates increased 30 percent from 2001 (18,165 km2 ) to 2002 (23,266 km2 ) and 2004 (23,750 ± 950 km2 ), generating net emissions on the order of 0.2 Pg C a year (3 percent of the global total) or more. Despite recent reduction (2005–07) of deforestation rate, Brazil is 228 stephan schwartzman and paulo moutinho among the top five or six GHG emitters globally, and 75 percent of the country’s emissions...