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South America Ranked Highest for Future Forest Carbon Investment
Washington, DC, USA, 03 December 2009 -- (BUSINESS WIRE) -- Brazil, Indonesia, and nations in the Amazon-Andes and Central America are poised to be key players in an emerging market for forest carbon that could reach USD 20 billion annually through 2020, according to a detailed analysis released today by Resources for the Future (RFF).

The Forest Carbon Index, developed by RFF and Climate Advisers, provides governments, development agencies, nongovernmental organizations, and private investors with geospatial data on global, national, and local forest carbon supply, explicitly taking into account country-specific economic, biological, and risk factors, such as governance and ease of doing business.

The Index brings together for the first time 21 datasets at the national scale and six datasets at a gridded subnational scale, integrated and mapped across approximately 1.5 million locations at a resolution of 85.5 square kilometers.

In its initial findings, the Index suggests a range of short- to long-term strategies by which tropical forests can be instrumental in achieving emissions reduction targets. Based on a rigorous geospatial analysis, the Index recommendations include the following:

  • In the near-term, the focus should be primarily on Brazil, Amazon-Andes, and Malaysian Borneo — countries with relatively good governance, high profit potential, and significant deforestation.
  • Through 2020, forest carbon activities should expand to include Indonesia.
  • Public-sector investments are needed to build capacity in poorly governed regions and to avoid shifting deforestation to areas of large intact forest, such as nations in the Congo Basin in Africa.

“The average price of forest carbon emissions reductions through 2020 will be slightly more than half of projected carbon prices in developed nations saving at least USD 40 billion over this period,” said Nigel Purvis, president of Climate Advisers, RFF Visiting Scholar, and director of the project. “Tropical forests can provide one quarter of needed climate solutions through 2020.”

Deforestation and forest degradation, mostly in tropical areas, account for up to 17% of global greenhouse gas emissions — more than the world’s transport sector. Using the Index, policymakers and businesses can estimate each nation’s potential to contribute to climate solutions through its forest carbon assets. The data are essential to understand the likely supply of international offsets, almost 90% of which are expected to come from tropical forests. For land managers and project developers, the Index illustrates which locations can most cost-effectively participate in forest carbon programs and global carbon markets. The Index also demonstrates the need for public financing, illustrating the areas with large standing forests and low deforestation rates, which would not be able to participate in a carbon market but need to build capacity to protect existing forests and avoid future deforestation.

The Geography of Forest Carbon

By compiling quantitative localized data on biological, economic, and political conditions for every nation — and matching it against expected changes in forest cover in those nations—the Index can calculate likely forest carbon costs and expected revenues. The results are displayed graphically on color-coded world maps under different policy scenarios. The interactive maps can be accessed from the Index Web site at www.forestcarbonindex.org.

“The Index is the first online, geographically explicit tool to show how forests can help mitigate climate warming for every piece of land on Earth,” Purvis said. “This information stands to be a powerful motivator for investors and policymakers as they seek the best places to enter the forest carbon market.”

“Investments will flow to places where the costs of mitigation are lowest, the opportunities for mitigation are plentiful, and local conditions are conducive to success,” said Adrian Deveny, lead author and principle researcher for the Index, “by mapping the theoretical profit potential, the Index identifies of some of the most promising places in the world where one could manage forests to mitigate climate change.”

The authors of a report on the Forest Carbon Index conclude with a number of specific recommendations to guide decisionmakers on how to include forests in climate policy planning. The report highlights key requirements that must be met through public and private funding. It highlights the potential for significant local and “co-benefits” associated with climate-driven forest conservation programs.

“Forests have many values beyond carbon,” Purvis said. “Some contain high biodiversity, and others hold cultural significance, enhance security, reduce climate vulnerability, or make special contributions to poverty alleviation and local livelihoods. Climate policy frameworks must give highest priority to the most important forests, taking into account the full range of societal objectives.” The report also warns that “poorly designed or managed programs could also threaten vulnerable populations, increase corruption, alter access to land, and result in forced migrations.”

The Forest Carbon Index is a partnership between RFF and Climate Advisers. Founded in 1952, RFF is an independent and nonpartisan institution devoted to research and publishing about critical issues in environmental and natural resource policy. Climate Advisers is a consulting firm specializing in U.S. and international climate policy. The Index is part of the Forest Carbon Initiative of RFF’s Center for Climate and Electricity Policy, which is funded by contributions from individuals, corporations, government agencies and foundations.

The center received grants from the Doris Duke Charitable Foundation and the David and Lucile Packard Foundation, the Simons Foundation, and a special gift from the Center for Environmental Markets at Goldman Sachs to support the Forest Carbon Initiative. Support for the dissemination of this research was provided by the United Nations Foundation.


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