Rich to pay the poor to preserve forests?

As the new term begins and preparation for Environmental Economics lectures starts again it is time to dust off the debate on whether rich nations should pay poor nations to preserve their forests. Logically it makes sense but the coordination and free riders problems will undoubtedly prove too great.

Some of the numbers in this article should give pause for thought. The Greenpeace plan has some merit but numerous, potentially insurmountable, hurdles remain.

The new "Green Inc" blog of the New York Times reports:

How Pollution Might Help Preserve Forests [Green Inc]

There is a growing group of campaigners and business leaders who say the rich world should pay people in poorer countries to preserve their forests and jungles.

Those in favor of such a wealth transfer say there’s a global imperative behind paying our neighbors in tropical regions a fair price to be good custodians of their trees. Tropical forests pay a crucial role in absorbing carbon dioxide — the main greenhouse gas. Chopping down trees releases large amounts of such gases.

If current rates of deforestation continue in Brazil and Indonesia, that would cancel out 80 percent of the cuts in emissions made by countries that meet their targets under the Kyoto climate treaty, according to Robert Glasser, the secretary general of CARE International, an aid organization.

Mr. Glasser, speaking with me on Wednesday in Brussels, said CARE is involved in efforts to put a price on forests because there is growing evidence of a link between climate change and poverty, particularly in cases of higher incidences of drought and disruptions to agriculture.

The question now is how to pay the bill.

The environmental group Greenpeace says it has the solution: An initiative called Forests for Climate that would aim to raise as much as $15 billion per year to cut emissions from deforestation in half. (A PDF overview of the proposal is here.)

Greenpeace wants governments agree to direct some of the money they raise from selling and giving away pollution rights — such as the allowances issued by European governments that permit companies to emit an annual quota of CO2 — and put that money into a new fund to pay other countries to save forests.

Greenpeace says its fund would be open to all countries with tropical forests, preventing the timber industry from shifting from one country to the next.

Other people say those kinds of initiatives, which require governments to forgo some potential revenues, are important but insufficient.

“Important aspects of preserving forests and planting new trees will be much more effective through markets,” said Virgilio Mauricio Viana, the director general Amazonas Sustainability Foundation, a non-profit group founded by the Brazilian state government of Amazonas and Bradesco Bank.

Mr. Viana is working with Glasser of CARE, a group called the World Agroforestry Centre, and a company, Sustainable Forestry Management, to ensure that European Union lawmakers adopt rules that encourage the growth of new markets for “carbon credits” derived from forests.

That, of course, would expand the opportunities for rich countries and rich-world companies to offset their emissions from dirty coal and inefficient cars by buying credits on international carbon markets.

One potential hitch, as I see it, is that those markets still are in their infancy and have been strongly criticized for failing to push up the price of polluting to levels where companies and citizens responsible for most of the planet’s harmful emissions actually change their behavior.

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