Capital Markets Could Save Tropical Rainforests:
Going REDD for Green
Aha! Edition 2, Spring 2008 Cover Story
Download Full Publication PDFU2 frontman Bono just might have to concede some space on the world stage with his Project Red health initiative, as a new REDD effort is causing quite a global stir and forests get to benefit. Reports ImageTree CEO Mark Redlus, about the first Carbon Forum America trade show and conference held in San Francisco in February: “There’s great international buzz and excitement about market-based incentives to ‘reduce CO2 emissions from deforestation and degradation,’ which is referred to simply as REDD.”
The Intergovernmental Panel on Climate Change (IPCC), a scientific intergovernmental body set up by the World Meteorological Organization and the U.N. Environment Programme, reportedly estimates that deforestation in the tropics is responsible for 20 percent of global CO2 emissions. Emerging from the United Nations (U.N.) climate talks in Bali at the end of 2007, REDD is a program that pays countries to not deforest, through a voluntary system for reducing emissions. Thus, a native forest is eligible for REDD credits based upon the amount of CO2 it sequesters as measured by converting its total wood volume into metric tons of carbon dioxide.
According to Mongabay.com, a tropical forest Web site, REDD credits could yield billions of dollars for tropical countries. Mongabay. com says that reducing deforestation by 10 percent would conservatively generate between $767 million and $4.6 billion a year at carbon prices ranging from $5.00 – $30.00 a metric ton of CO2. A 20-percent reduction would generate $1.5 – $9.2 billion; and a 50-percent reduction would yield $3.8 – $23 billion annually.
"Forests are now a major part of the global climate-change conversation,” Redlus says, noting that Carbon Forum America was the largest such event ever held in the United States. More than 1,400 companies, consultants and exhibitors representing 30 countries participated, including the World Bank, a large delegation from the U.N., and California utility Pacific Gas and Electric.
The global warming reduction momentum that is driving deforestation prevention via REDD credits, is also evidenced by the fact that there are many bills before Congress regarding a cap-and-trade system in the U.S., says Chuck Anderson, ImageTree vice president of corporate development. “Much of the country is now involved in the U.S. Climate Registry, a collaboration among states, provinces and tribes aimed at developing and managing a common greenhouse gas emissions reporting system,” he says. Regardless of who sits in the Oval Office next year, we are likely to see a cap-and-trade system signed into law.”
Worldwide, according to the International Emissions Trading Association, carbon trading has doubled in the past year to $60 billion, and the U.S. Congressional Budget Office has suggested it could eventually reach $300 billion in the United States.
Eliminating the estimated 1.7 billion tons per year of CO2 from deforestation could provide as much as $50 billion annually, a cash infusion that could have a significant impact on forest conservation,” says Anderson.
Just as Bono has his Project Red critics, this REDD program has its own. But, as Redlus says: “The capital markets are probably the best way to solve the environmental crisis we face. What has been missing from the equation, though, are the right mechanisms for measurement and accountability.”
This is where ImageTree fits in.
Explains Redlus: “Inherent in the REDD system is the need to precisely calculate the carbon that has been sequestered in metric tons of CO2, which is the basis upon which carbon credits can be issued. After a comprehensive baseline forest evaluation, it’s necessary to validate the CO2 that the forest is sequestering year after year, thus authenticating the existence of the REDD credits.
"Because our technology measures the footprint of every visible tree crown in a forest, and, thus, reliably calculates the net change in carbon biomass resulting from trees that may have been removed,” says Redlus, “ImageTree is arguably the only company that can cost-effectively provide the integrity needed to hold forest landowners accountable regarding their claims to carbon credits over time.
"For REDD credits to succeed,” he adds, “capital markets, along with regulators and environmentalists, must have incontestable assurance that forests are being protected so that REDD credits remain valid.
"ImageTree has the patented technology that will enable the REDD market to effectively function and transform the possibility of significantly reducing the 20% of all CO2 emissions from deforestation into a probability,” says Redlus.
Stay tuned.