Credits Where Credits Are Due

January 16th, 2013 BY Meredith Melnick | No Comments

Under the current Kyoto Protocol, forest protection does not earn carbon credits in the international trading market. As such, there is no internationally established financial incentive to curb logging or forest razing. There is, however financial incentive to sell wood and create more farmland. And while credits are offered in exchange for planting new trees (under the Clean Development Mechanism), the ancient forests of the world are left out of the equation. Taken to its logical extension, this reward system encourages razing of current forests to build new ones in a “carbon farm” scenario.

Environment ministers from around the world hope to correct this extreme oversight when they gather for the first of a series of meetings to write a new climate change accord that will go into effect in 2012 following the expiration of the Kyoto Protocol. Many of the countries represented at the meetings, which are to be held in Bali, Indonesia, stand to gain the most in a protected forest marketplace as they comprise the countries with the highest percentage of forested area. These include Brazil, Mexico and Indonesia among others.

The World Bank is enacting a pilot program to explore the functionality of protection credits that will include potential markets in Papua New Guinea, Costa Rica and Indonesia.

And in an increasingly common phenomenon, the interests of business and environment have intersected. The inclusion of protected forests in the carbon credit marketplace appeals to corporations who rely on purchasing carbon offsets to meet their emission caps. Developed nations with emissions problems will surely take advantage of the proposed new system as well. And while a healthy planet requires the decreased carbon-emitting consumption of all countries and for all businesses, surely an expanded carbon credit system is a good start.

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