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January 27, 2009 / Mridul

UN Plans to Introduce New Carbon Offsetting Scheme For Saving Rain Forests

The United Nations plans to introduce a new market-based emissions trading scheme which would allow developed nations to buy credits from countries having vast stretches of rain forests. The UN hopes that the new scheme would help reduce deforestation and restore the depleting resource of rain forests.

Called the Reduced Emissions from Deforestation and Degradation, REDD, the emission permits would be traded in a way similar to the Certified Emission Reduction permits. The REDD permits would help raise funds for restoring the fast depleting rain forests in the African, South American and South East Asian countries and in return the developed nations would be able to achieve the set emissions reduction goals. The UN plans to include this scheme in the next climate treaty which would follow the Kyoto Protocol.

But there are several problems with the basic model of the REDD emissions credits which would work principally in the same manner as the Kyoto carbon credits scheme. UN administrators have themselves admitted that the current carbon emissions trading mechanism should be made more transparent and effective. In addition, global banking giants have also slammed the Clean Development Mechanism saying that it is plagued by unnecessary delays and bureaucratic hurdles.

Weak environmental standards for new projects and extensive lobbying by industry giants has resulted in almost no progress as far as preserving the fast depleting rain forests is concerned. Cutting of rain forests for creating land for growing the lucrative biofuel crops is yet another problem which the governments of various nations have been avoiding to solve.

The developing countries having vast tracts of rain forests have already started asking the developed nations for funds to protect the forests from industrial activities like logging, oil exploration and mining. But accountability is a major issue related to the proper use of these funds. Brazil have created an international fund to preserve the Amazon rain forest; and while it appeals to the developed countries to donate to the fund to offset their carbon emissions, the government of Brazil has made it clear that the donor nations will have no say in the utilization of the funds.

Indonesia is one of the biggest polluters in the world not because of widespread industrial activity but because of the illegal logging and cutting down of rain forests for growing palm which is a source of biofuel. Indonesia is the world’s largest palm oil producer and the demand has been increasing steadily mainly from the European Union as it attempts to reduce its carbon emissions through the use of biofuels. There is no doubt that the demand would increase further which could fetch the Indonesian government billions of dollars in revenues. So one has to ask that why shouldn’t Indonesia use those revenues for preserving the rain forests before it starts selling REDD credits.

Another major problem is the loss of jobs due to halting of industrial activities in the forests. For this, the UN must ensure that the funds generated from selling REDD credits is used at the grassroot level, at the local community level so that this scheme generates socio-economic benefits as well. This has been a problem with the Kyoto carbon credits too where multinational companies or their subsidiaries have been able to get their projects sanctioned under the CDM scheme. The REDD credits scheme must ensure an effective and sustainable solution to the problem of unemployment.

Some of the measures that the UN should incorporate in the REDD credits mechanism are:

  • Obligating the developing countries to create a logbook which would contain the gist of the actions taken by the governments to preserve the rain forests – how many acres of the forests were lost and by how much it has been restored.
  • To address the accountability issue related to the funds, the governments must be required to provide reports about utilization of the funds. There should be independent assessment of the usage of these funds at regular intervals.
  • The governments should create and enact tough anti-logging laws. The country which fails to act against illegal logging must be penalized.
  • Continuous review of the system as a whole and plugging loopholes that any of the concerned parties could use to work their way around the stated requirements and procedures.

It is very essential that we stop abusing the rain forests as they are not only the treasures of biodiversity but also a major tool of neutralizing the rising carbon emissions. It is commendable that the United Nations has initiated to preserve this invaluable resource but it is also important that it does not repeat the mistakes of the Kyoto credits scheme. Accountability, transparency, quick action and sustainable benefits to the local people and environment should be the principles of this new carbon offsetting scheme. Working in a positive and determined manner will eventually help us make real progress in reducing our rising carbon emissions.

This article was first posted on Red, Green and Blue.


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