Alister Doyle
Norway is doubling the price it guarantees developing nations to keep their tropical forests standing, in a step to slow catastrophic losses and encourage big companies to invest far more in nature to combat climate change.
In exchange for boosting the floor price it offers nations to slow deforestation to $10 per tonne of carbon dioxide from $5 — until now the international standard — countries must adopt better monitoring, said Per Fredrik Pharo, director of Norway’s International Climate and Forest Initiative (NICFI).
Norway is the top donor for safeguarding rainforests, ahead of nations including Germany and Britain, and has spent up to 3 billion crowns ($330 million) a year since 2008.
But despite concentrated efforts to curb losses, tropical forests are being cleared at a rate of a soccer pitch every six seconds — and deforestation accounts for about 11 per cent of man-made greenhouse gas emissions each year, according to the UN Food and Agriculture Organization. Trees naturally curb global warming by soaking up carbon dioxide from the air to grow, which makes protecting forests a cost-effective way to deal with climate threats.
US President-elect Joe Biden called in September for the world to mobilise $20 billion to protect the Amazon.
That rainforest locks up an estimated 500 tonnes of carbon dioxide in every hectare — roughly the size of a football pitch.
At $10 a tonne, tropical forest countries could earn $5,000 for every hectare of rainforest they conserve compared to a benchmark of historic rates of losses.
TOUGHER MONITORING
On one side of the chicken-and-egg dilemma, developing nations have found it less profitable to safeguard rainforests — at least in the short-term — than to allow logging or to permit farmers to burn down forests to produce soya, palm oil or beef.
On the other, donor nations and companies are wary of paying to protect forests when their investments may literally go up in smoke. Deforestation has risen in Brazil, for instance, since populist President Jair Bolsonaro took office in 2019. To qualify for the $10 floor price, Pharo said tropical forest governments will have to adopt a rigorous accounting and monitoring system for forests, known as ART TREES, worked out in February.
“What we are saying to countries — like Gabon, Indonesia, Colombia — is that ‘You have our price guarantee. If you deliver tonnes under ART TREES we will pay you $10 a tonne, up to some ceiling’,” he said.
The hope is that compliance tracked by satellites and on-the-ground inspections will make big companies confident enough to invest $10 per tonne or more, allowing Norway to stand aside and act mostly as a back-up.
Western Europe’s top oil and gas exporter, Norway also has helped set up non-profit group Emergent to act as a broker to promote forest investments by companies.
Still, it is unclear if the $10 floor price will be enough to unlock investments. — Reuters
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