In a recent article we talked about the progress of the Bali conference, the adoption of a road map for future negotiations on a greenhouse gas emissions treaty, and the lack of specific targets going forward in these negotiations.
There were two additional agreements announced at Bali, but we ran out of space to discuss them. We thought it worth one more article on Bali to talk about these agreements, one on deforestation and one on an adaptation fund. Then we’ll move on. We promise.
Deforestation presents a major challenge in limiting carbon emissions. Plant growth is the major sink for carbon globally. Mature forests and forest soils store a large quantity of carbon, so preserving forests has to be a priority for any global strategy to reduce or limit greenhouse gas emissions.
The problem is, much of the world’s richest rainforests are found in some of the world’s poorest countries. The economies of these countries are built on natural resource extraction, including timber harvest. How do you sell forest preservation to a country when failing to harvest timber also means ignoring one of few available revenue streams?
This challenge makes the agreement on deforestation announced at Bali remarkable. The agreement was a pet initiative of Indonesia, the conference host and home to some of the world’s remaining tropical rainforests. In a nutshell, the agreement would provide poorer countries with an economic incentive not to harvest timber. Foreign investors could pay stakeholders not to harvest, providing an alternate way to make money from the forest. In exchange, the investors (such as corporations or foreign governments) would receive emissions credits that could be used to offset carbon emissions exceeding regulatory caps.
The other major announcement coming out of Bali was an agreement to establish an adaptation fund to aid countries lacking resources to cope with climate change. The fund will finance projects such as sea walls, early warning systems for extreme weather events, improved water infrastructure, conservation and restoration efforts, and training in sustainable agriculture.
Money for this fund will come from a tax on revenues generated by the clean development mechanism. This scheme, developed several years ago, established a carbon emissions trading market. It allows an industrialized country to buy carbon credits produced by carbon emission reduction projects in developing countries, such as reducing timber harvest as mentioned above. These credits can then be applied against emission targets in the industrialized country.
We believe the Bali conference itself was a limited success, establishing a road map for future negotiations with no defined emission reduction goals. However, we think these two announcements timed to coincide with Bali are real progress and maybe didn’t receive the coverage they deserved.