Rhett Butler – the founder of what is probably the world’s most widely visited rainforest website, mongabay.com – has written a thought-provoking piece on “avoided deforestation” strategies for poor countries. He argues that what is “at stake [is] potentially billions of dollars for developing countries and the future of the world’s climate”.
Unconvinced?
Well, read on. According to Butler, the country that would benefit most under such an ambitious scheme would be…
…Burma.
Its mix of abject poverty and high rates of deforestation means that Southeast Asia’s most widely criticised military dictatorship is seen as a good candidate for an “avoided deforestation” scheme.
Butler writes (my emphasis added):
Its status as a pariah state aside, Burma could earn hundreds of millions of dollars for cutting its deforestation rate under a carbon-trading initiative proposed by a coalition of developing countries and under discussion this week at U.N. climate talks in Nairobi, Kenya.
Burma…has one of the highest deforestation rates in the world…Under a proposed carbon finance initiative, mitigating these emissions could be worth anywhere from $128 million to over a $1.8 billion to industrialized countries.
…By reducing deforestation that would otherwise occur in developing countries, industrialized countries could effectively “offset” emissions limits set under international agreements like the Kyoto Protocol. Money from industrialized countries would flow into forest conservation fund that Burma could drawn upon depending on its success in reducing its deforestation rate. The strategy could help fight climate change at a low cost while, at the same time improving living standards for some of the world’s poorest people, safeguarding biodiversity, and preserving other ecosystem services.
Carbon finance could boost per capita GDP in Burma from 5-20 percent.
Controversial ideas, no doubt, and the type of initiative that would, under current circumstances, put some people in Burma in a very cash-rich position. What Butler overlooks is that almost all logging in Burma happens in the mountainous parts of the States – and in Shan and Kachin areas, in particular. Big and unfathomable questions remain:
- Will the junta share any newfound carbon wealth with ceasefire groups?
- Will it make payments so that its sworn enemies, like the KNU, can profitably disavow logging as a way of making money?
- Who will be responsible for ensuring that the desired “trickle-down” actually occurs?
- Can the Burmese junta legitimately negotiate on behalf of all of the people and firms who actually cause deforestation?
I can accept that this is the type of idea that may, at some abstract level, appear like a worthwhile strategy for environmental protection and wealth creation. Based on my experiences in the areas of Burma where the most logging occurs, and where logging would supposedly be “banned”, I really doubt that a workable scheme, that actually stops logging and leads to improved conditions inside Burma, is possible under current conditions. Logging occurs because it is profitable and strategically desirable for many ethnic groups, gives the junta a massive stream of almost untraceable revenue, and suits the interests and agendas of Chinese firms and the Chinese government.
The whole point of the “avoided deforestation” scheme is to increase per capita GDP. But, in Burma, like many other authoritarian states, per capita GDP is a fuzzy concept at the best of times. Equitable shares of revenue are a fantasy. And in this context, plans to arbitarily increase GDP by between 5 and 20 per cent sound like they come from wonderland. Any such plans need to be made with a full awareness that the Burmese generals, and their business associates, have no track record of wealth redistribution.
Throwing money at the Burmese regime will almost certainly lead to a negligible environmental benefit simply because the most heavily logged areas are those where government control is most tenuous. Does the junta have the capacity to stop other interests in the country (of Shan, Chinese, Wa or Kachin stripes) from doing what they can to make money in their own areas? What about in areas where fighting continues, or where it could start again any other week?
All of the big questions remain – the ecologists and environmental economists can’t avoid them if they want to do business in Burma.
9 responses so far ↓
1 aiontay // Nov 8, 2006 at 11:48 am
While I agree with all of the issues you raise regarding carbon trading, there is another aspect to deforestation in Burma, which is the dependence of the population, particularly in the mountainous areas where the logging takes place, on wood for fuel and construction. One village I visited north of Lashio made almost all of its income off charcoal production; we bought charcoal for our own use when we passed through the village. There was a whole series of kilns dug into the hillsides around the village. Also, many of the Kachin villagers derived part of their income during the down times in the agricultural season by cutting firewood.
Furthermore, what other construction material is there in the villages other than wood or bamboo? Brick, concrete, stone and other building materials are too expensive or just not available for the average person. In the Kachin villages, the only building not made of wood or bamboo that I saw would be the church. Then there are the hoes, plows, bee hive, mortars and pestles, and even the stoppers for the tubs at the hot springs in Lashio that are all made of wood.
Even if the benefits of carbon trading were to be redistributed down from the generals to the local populations (an extremely doubtful proposition, as you note), how could it be used to alleviate the need for wood by the population?
2 frank jotzo // Nov 8, 2006 at 5:28 pm
There does indeed seem a chance that there will be some sort of incentive system for avoided deforestation under the UN Climate Change Convention. The chance was missed under the Kyoto Protocol, and now the talks seem to be moving surprisingly fast.
BUT at a glance, the magnitudes won’t be anywhere near the total potentials that Butler calculates. That’s because…
Carbon payments of the magnitude assumed would only be made for ‘verifiable’, permanent emissions savings. So each country would have to somehow demonstrate that they indeed would have converted a given piece of land, if it hadn’t been for the carbon payments – and then guarantee that the forests will keep standing. That’s difficult or impossible. Certainly sounds difficult for Burma!
An alternative are ‘rental’ payments, where for example each year a small payment is made for forests that still stand. Deals with the permanence problem, but has the same problem of proving that forests would have been converted otherwise. And prices paid will be lower.
A more realistic outcome would be incentive or reward payments for policies and programmes aimed at reducing deforestation rates. Negotiate payments for defined actions, and perhaps (but not necessarily) defined outcomes. Perhaps even administered through the GEF…? Then the payments are likely to be much, much lower than computed in Butler’s price*quantity approach.
At any rate, the question needs to be asked: Will rich countries really be prepared to make financial transfers of tens of billions of dollars per year to tropical forest countries??
3 Nicholas Farrelly // Nov 8, 2006 at 7:48 pm
Thanks Aiontay and Frank -
From your very different perspectives you have both made key points that seem to further undermine Butler\’s argument. These points hold for Burma, and I guess for other places too. Frank shows that rental payments would lead to far lower transfers than Butler suggests and Aiontay shows that many people will still use the forests for the basic goods that sustain life. Thanks for these great contributions.
In my mind, your extra criticisms all beg another big set of of questions. Simply, is there a better approach than the model Butler suggests? Are there other ways of doing what he seeks to do? Or is his unworkable scheme still the best (or only?) option?
In Burma, his plans for \”avoided deforestation\” just seem impossible – at least under current conditions. But are there other potential models that could actually work?
Any thoughts?
Nich
4 New Mandala » Carbon accounting in the Burmese scene // Nov 9, 2006 at 12:31 am
[...] For New Mandala readers keen to learn more about carbon trading and its relationship to logging in Burma, the Australian government’s National Carbon Accounting System website provides a wealth of detailed information. It can, among other things, give you an idea of how carbon accounting calculations can be made, based largely on analysing “land-based sources and sinks”. It shows how some governments are beginning to conceive their place in the global carbon economy. This Australian system, with its national-level modeling, is some years in front of what I imagine is possible for Burma. I don’t think that such detailed modeling has even yet been attempted for the Burmese case. [...]
5 frank jotzo // Nov 9, 2006 at 10:09 am
Nicholas,
thanks for your comments. Incentives for avoided deforestation is a really big topic right now under the UNFCCC (Climate Change Convention) negotiations. Hence the recent World Bank report.
There’s a sizeable research/policy development process going on right now that sheds light on some of the questions. Some of it was discussed at a UNFCCC workshop in Rome in September, see http://unfccc.int/methods_and_science/lulucf/items/3745.php.
My humble self and a few forest policy buffs have a paper on this coming out in the journal Climate Policy – not online yet but happy to send you the paper.
Very little or none of this work is on Burma, I suspect. It’s either generic, or focussed on Latin America, Indonesia and sometimes PNG.
6 New Mandala » Rewarding and regulating the upland poor // Nov 10, 2006 at 9:13 am
[...] Nich Farrelly has raised some interesting questions about the potential economic benefits of preserving Southeast Asian forests in the context of international carbon trading. A similar market-based approach can be seen in relation to Rewarding Upland People for Environmental Services, a “program for developing mechanisms for rewarding the upland poor in Asia for the environmental services they provide.” The goal of the program is “to enhance the livelihoods and reduce poverty of the upland poor while supporting environmental conservation on biodiversity protection, watershed management, carbon sequestration and landscape beauty at local and global levels.” A range of research and discussion papers are available on the RUPES web site. [...]
7 New Mandala » Burma tourism boycott - some questions about “avoided tourism” // Nov 10, 2006 at 10:07 am
[...] That Aung San Suu Kyi has repeatedly asked tourists to boycott the country will still be good enough for many. It will encourage them to stay away, and make them feel like they are making a contribution through “avoided tourism”. But is this much the same as the “avoided deforestation” schemes that I questioned earlier in the week? Is it just as hard to quantify and police? Is it just as hard to identify the winners and the losers? Is it just as easy to get swept up in partisan judgements? [...]
8 New Mandala » Rhett Butler on “avoided deforestation” in Burma // Nov 11, 2006 at 3:35 am
[...] Rhett Butler – the creator of mongabay.com, a rainforest website, and author of the article that originally prompted me to pose some questions about the idea of “avoided deforestation” in the Burmese scene – has written me a short note which he is happy for me to post to New Mandala. [...]
9 New Mandala » Australia protecting Southeast Asia’s trees? // Mar 30, 2007 at 2:47 am
[...] November 2006 I wrote, somewhat skeptically, of a proposal to increase Burma’s GDP by paying that country to stop cutting down trees. Such schemes [...]
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