Paying for Avoided Deforestation – Should We Do It?

Deforestation remains one of the largest sources of global CO2 emissions, constituting around 17% of total emissions (Figure 1; Intergovernmental Panel on Climate Change, 2007a). When forests are converted to agriculture, most of the carbon in biomass is emitted into the atmosphere either through active burning, or through decay. Deforestation is rather common today in tropical regions (Brazil, Africa, Southeast Asia) and results mainly from expansion of agricultural land, including the development of feedstocks for bioenergy. According to the Intergovernmental Panel on Climate Change (2007b), reductions in deforestation could have important near-term greenhouse gas impacts and they could reduce the overall costs of avoiding climate change. The role of deforestation in future climate policy has become a prominent policy issue. At the recent Bali international climate change meetings, countries (including the United States) agreed to keep the question of deforestation on the table during the debate about future policy after the Kyoto Protocol. This article discusses and examines arguments in favor and against the use of credits from reductions in deforestation in climate policy. While reductions in deforestation are an area of intense negotiation in international policy, they could easily become an area of concern domestically if the U.S. moves toward stronger climate policy. Several current legislative proposals explicitly consider importation of international carbon credits, some of which could arise from reductions in deforestation.