Forests “could weaken CO2 markets”

Carbon-market prices could fall by 75% if credits for safeguarding forests are added to markets for industrial emissions, according to a report commissioned by Greenpeace. Issued at climate talks in Bonn, the document said that forest-carbon credits also could slow the fight against global warming and divert billions of dollars from clean-technology investments, Reuters reported.


“Cheap forest credits sound attractive, but a closer examination shows they are a dangerous option,” said Roman Czebiniak, Greenpeace International’s political adviser on forests. He was referring to estimates in the new report prepared for the environmental organisation by Kea 3, an economic modeling group in New Zealand.


The report projected the 75% fall in prices, to 3.9 euros (US$5.16) per tonne by 2020 from a baseline of 16.05 euros used in the report, under current national policies for limiting greenhouse-gas emissions linked to climate change. “Countries like China, India and Brazil could lose tens of billions of dollars for clean-energy investments,” the study said, “if forest-protection measures are included in an unrestricted carbon market.”


Tropical deforestation accounts for 20% of all greenhouse-gas emissions from human activities. Placing a price on intact trees – which soak upon carbon dioxide — could help save the world’s forests from logging and land clearance.

So far, there is no agreement on how to put a price on forest carbon. Suggestions include carbon trading and new taxes in developed nations to raise cash. Greenpeace’s own proposal is to allow industrialised countries to meet a part of their emissions-reduction goals by buying cheaper “tropical deforestation units” as an addition to deep cuts in domestic emissions. These units would not be tradeable on industrial-emissions markets, however.


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