Avoiding deforestation the Norwegian way

The Economist blog picks up on the news that Norway will donate $1 billion between now and 2015 to a new Amazon protection fund set up by Brazil (presumably funded with oil revenues..?).

Irony aside, it is widely remarked upon that forest preservation was one of the most important gaps in the Kyoto Protocol, and current climate change policy more generally. Deforestation accounts for about 25% of global carbon emissions (around the same as the entire emissions of the US), and avoiding it, together with reforestation, are widely acknowledged to be amongst of the cheapest ways of cutting carbon. It is certainly a far more efficient use of economic resources than ludicrously expensive biofuel targets.

The question is how to make it work. The ‘son of Kyoto’ badly needs to come up with a solution to forestry – are these funds a good model to go by? They are probably better than using avoided deforestation to generate tradable permits that can be ‘exported’ for use in developed country cap and trade schemes – as has been suggested. A flood of very cheap permits from tropical countries would kill the incentive to reduce emissions in the industrialised world, a problem already seen with the UN Clean Development Mechanism, a scheme which allows polluters in rich countries to buy in carbon offsets from projects overseas that (in theory) cut emissions.

But ‘sustainability funds’ like this one from Brazil do need to be carefully managed and enforced to make sure these large sums of money are ending up in the right hands, and do actually mean less deforestation. It looks like the Norwegians will try to make their funding contingent on the latter condition being met. But it is a tricky business, especially when the authorities in the country concerned may be unable to control (and possibly be complicit in) illegal logging.

It’ll be interesting to see where this goes…