Can Carbon Trading Save Vanishing Forests?

Abstract

emissions target can buy carbon credits from other countries that either have no target (as is currently the case for developing nations) or that produce fewer emissions than allowed. Like any tradable commodity, the price of carbon credits is largely determined by supply and demand. In theory, everyone should win with REDD. Wealthy nations could pay to help slow deforestation as part of an overall effort to meet their emissions target. Protecting an imperiled forest in Peru, for instance, might lead to the same net reduction of carbon emissions—and be considerably cheaper—than retrofitting a coal-fired generating plant in Ohio. In a transaction like this, dangerous carbon emissions are reduced, a biologically rich forest is protected, and Peru gains direly needed foreign revenues. For such reasons several influential studies, such as the widely heralded Stern Report in the United Kingdom, have advocated REDD as a vital and cost-effective strategy for slowing global warming. In any effort to slow harmful climate change, tropical forests are the low-hanging fruit.