By Timothy Gardner
"It's a bit of a minefield," Michael Brune, the executive director of nonprofit group the Rainforest Action Network, told the Reuters Global Environmental Summit in New York.
He said there are plenty of opportunities to attract funds to protect key ecological areas, but enforcement of laws to preserve them amid illegal logging and clearing is difficult. "But I would say the benefits outweigh the threats."
Carbon brokers in New York and London have begun working on deals in which greenhouse gas polluters in rich countries would attempt to reduce their carbon footprint by paying communities in developing countries to slow tree felling rates.
They have been spurred by recent data showing that the burning and clearing forests to create everything from pastures to palm oil plantations, in areas from the Amazon to Aceh province in Indonesia, releases nearly 20 percent of the world's greenhouse gas emissions.
A new United Nations climate treaty could make such trade official and greatly raise the value of such deals. Tropical nations could get billions of dollars and huge amounts of carbon dioxide could be saved from reaching the atmosphere, cutting the odds of an increase in everything from stronger storms to droughts.
But there are also many risks, including difficulties in monitoring forest preservation, the planting of forest stands that lack biodiversity, and backlash from local groups.
In Barcelona on Wednesday, an international alliance including 250 representatives from business, trade unions forestry companies, governments and local and indigenous peoples, laid down guidelines for such trade.
They said projects should aim to curb poverty, strengthen land rights, safeguard indigenous peoples, improve forest management and should not be a substitute for deep cuts in industrial emissions of greenhouse gases by rich countries.
PITFALLS AND INCENTIVES
One pitfall is that some of the nongovernmental organizations (NGOs) and companies that are beginning to explore financial trade to preserve forests could be accused by locals of exploiting the resources.
In Brazil, for instance, some NGOs have already been accused of the illegal collection of indigenous biomedical knowledge from forests for production abroad of new drugs and other useful products.
But Carlos Minc, Brazil's environment minister, told the summit such reports have been exaggerated. "There are a few companies and NGOs linked to biopiracy," said Minc, who won the United Nations Global 500 Award in 1989 for his conservation efforts. "But they are the overwhelming minority."
Ross MacWhinney, a broker at New York-based Evolution Market, LLC who works on forestry finance, said making such deals work also means overcoming risks that could threaten the forests, and in turn, investments in them. Such risks include disease, fires and illegal logging.
He said groups such as the Voluntary Carbon Standard are working on improving practices in carbon markets. One method is to create a buffer into which would go a portion of forestry deals. If projects prove over time that they are preserving forests, they would receive funds back from the buffer pool.
"It provides incentives for competent management of the forests," said MacWhinney.
In addition, the U.N. is working with local groups in countries from Bolivia to Zambia on monitoring forest preservation, perhaps with the use of satellites.
(For summit blog: summitnotebook.reuters.com/)
(Additional reporting by Alister Doyle in Barcelona and Raymond Colitt in Brasilia; editing by Tim Dobbyn)