Not seeing the forest for the trees

In response to the high levels of deforestation, the provincial government of Garut in Java, Indonesia has begun a new initiative requiring married couples to plant ten saplings. In addition to this, the government is pursuing both social and environmental goals through requiring divorcees to plant fifty trees.

To make effective gains in global climate change efforts, substantially greater resources are required than those falling in and out of love in central Java can provide. The idea behind REDD (Reducing Emissions from Deforestation and Degradation) is that resources can be leveraged from richer nations to reduce the rates of deforestation in tropical nations.

REDD has both equity and efficiency arguments. Richer nations have-in part-become economically developed through clearing forests for agriculture and urban environments. If nations are prevented from deforestation, they may be forced into a higher cost path of economical development. If the global community wishes to close this development avenue to certain economies, then compensation should be provided.

In addition to the above premise of equity, there is the efficiency argument for richer nations funding REDD. At the global scale, reducing carbon emissions in rural areas is potentially cheaper than reducing emissions from energy use in richer nations. If richer nations can develop a mechanism to pay nations like Indonesia and Papua New Guinea to reduce emissions from deforestation and degradation, then global emissions targets can be met at lower cost.

Critics of the inclusion of REDD often miss this point. Such criticisms focus on the potential for carbon prices to fall (and providing a disincentive to invest in green technology) or the “[evasion of] emissions reductions in Australia” . That is, that more firms can afford to pay for emissions reductions rather than lower emissions themselves. What is forgotten at this point is that emissions reductions are being met at the global scale. As the environmental problem is global, the environmental outcomes are equivalent. If trade in emissions is voluntary, and all participants fully informed, then everyone is better off. The global community meets the desired emissions reductions, industry meets obligations at a lower cost and those undertaking the project receive benefits greater than deforestation provides.

For REDD to be successful requires knowledge of the underlying forces driving deforestation. As I’ll be spending the next three years on this problem, I’ll leave my thoughts on this for a later date.