Monday, December 04, 2006

Rainforest saved, but who pays?

Some good news for a change. It has been announced that a large area of Brazilian rainforest is to be protected from commercial logging and agricultural use.

The protected area is vast, and connects rainforest in neighbouring Guyana, Surinam and French Guiana thereby reducing the fragmentation problem associated with deforestation (i.e. that remaining forest cover is broken into small pockets and hence cannot sustain many larger animal species). The map on the left shows the area to be protected.

However, it would seem that this is a largely selfless act by the Brazilian government who will disproprortionately suffer the financial burden of protecting this land. The benefits of protecting rainforest often fall to those in countries other than Brazil - we all enjoy the ecological and climatic benefits associated with rainforest protection and many people in developed countries (in particular) hold existence values for tropical rainforest. These people will therefore reap the benefits of this decision. However, the costs of this decision fall squarely on the Brazilian government and its people. These costs include the opportunity cost of agricultural and timber revenues which could have been earned but will presumably also include a certain degree of protection costs associated with monitoring and enforcing these protected zones.

It would be nice if mechanisms existed whereby countries that benefit from environmental decisions could in some way compensate the countries that make these decisions. Carbon credits would be an obvious place to start and broadly fall within the Kyoto Protocol. Countries with emissions commitments (the developed world) could pay countries such as Brazil to keep their trees. The resulting emissions reduction could then contribute towards the developed country's emissions commitments. As long as these 'sequestration' costs are lower than the cost of abating carbon in the developed country (and the evidence suggests that they are) then everyone's a winner. So why doesn't this happen?

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