The forest for the trees building a carbon ranching market.

Author:Powers, William

While traveling recently in the thick of Brazil's western Amazon, I spotted a flash of bright color amid the blackened stumps of a vast rainforest clear-cut. It was a painted jochi. This large, guinea pig-like rodent had wandered out into the charred wasteland from the tiny remnant of forest that remained its home. It poked around, looking for food, nibbling on what used to be underbrush. A macaw swooshed overhead, not a nest to be found. As I walked out into the clear-cut, a snake slithered across the hot, dark earth, searching for insects, of which there were none. For a moment, I imagined I was standing in empty sea, drained of its waters, and its creatures--dolphins, herring, rockfish--were helplessly flailing around.

Global deforestation, happening at a rate of about 32 million acres a year, impacts not just flora and fauna, but people, too. Human cultural diversity, like species diversity, gets thicker around the equator. The destruction of forests like the Amazon contributes to what amounts to an ongoing genocide. The world's indigenous people, once hunters and gatherers living in the heart of the rainforests, are becoming "environmental refugees," pushed into conflict with their equally poor rural neighbors, or forced to migrate into Third World urban sprawl. There, they become "pavement Indians," unable to assimilate, begging for scraps on street corners.

These charcoal-black clear-cuts, like the one I walked through, are the literal "black holes" in the international system, the places where Pandora's Box has been opened and apparently cannot be closed. Despite four decades of the international community grappling with deforestation--from the Club of Rome commissioned 1972 book "The Limits to Growth" (which warned that exponential growth negatively interacts with finite resources like forests) to the Brundtland Commission's 1987 report "Our Common Future" (which declared that sustainable development must "meet the needs of the present without compromising the ability of future generations to meet their own needs") to the 1992 Earth Summit's Convention on Biodiversity (which outlined, for the first time in international law, that conservation is "a common concern of humankind")--one startling fact remains: today, an acre of rainforest is razed every two minutes. This is because none of these approaches, conferences, or international debates has adequately addressed the basic existence of a global market failure in the forestry sector. Despite the undeniable global benefit from preserving the forests, I have seen all too often farmers and local governments within developing countries choose to clear-cut the trees because what they understand is cash--and the trees aren't earning them any cash just by being trees. Put in economic terms, deforestation is not internalized in market decisions since it has no opportunity cost. Even if only a small amount of money is earned from, say, a logging venture, that's a lot more than the forest's "existence value" of zero.

But today, as the clock ticks toward December 2009, when the world will meet in Copenhagen to draw up what could be the grandest environmental agreement in history--the climate treaty that will replace the Kyoto Protocol--the global community is looking into these charred clear-cuts and imagining a world without them. But the architects of Copenhagen are not solely interested in the trees themselves, the species driven to extinction, or the indigenous refugees squeezed out of those vanishing forests. They're finally seeing the forest, if you will, for the trees--looking at the world's forests in light of their enormous potential role in what the Stern Review on the Economics of Climate Change, a 700page report commissioned by the British government in 2006, calls "the world's biggest market failure": the release of greenhouse gases that, if unchecked, could unleash global climate catastrophe.

A Resource, Untapped

Tropical forests are the lungs of the planet. They breathe in carbon dioxide and breathe out oxygen. Scientists estimate that 25 percent of all the carbon stored on Earth is held within tropical forests. When they are burned or logged, gargantuan quantities of damaging greenhouse gases are released. Indonesia, for example, has earned the title of the third-largest global greenhouse polluter thanks to deforestation. Private companies, some of them based in the United States, pay top dollar for landowners to clear as much forest space as they can to sell timber or farm cheap commodities such as palm oil, a key ingredient in cosmetics and biodiesel. Destruction of tropical forests is responsible for 20 percent of the world's climate pollution, roughly the same amount produced by the burning of coal (which is already recognized as a major contributor to global warming). In fact, the clearing of about 13 million hectares--an area the size of Nicaragua--each year produces more greenhouse gas emissions than all the cars, trucks, planes, and ships in the world. In short, stemming climate change is a fool's errand unless we solve the deforestation crisis.

Deforestation--the thinning, altering, and wholesale elimination of forests for fuel, shelter, and agriculture--is not a twenty-first century phenomenon. During the Classical and Medieval eras, land clearing became a regular occurrence as agriculture and farming served as the basis for which villages, towns, and eventually nations were established. Enter the sixteenth century, when European imperialists and explorers sailed to the New World, India, Latin America, and even Japan--and brought their affinity for settlements, exported massive quantities of rubber from the Congo, and logged India to build railroads. This lasted well into the twentieth century, when new technologies spurred by industrialization allowed humans to escalate exponentially their exploitation of the world's forests through fossil-fueled industrial agriculture, logging, strip mining, and ranching.

Today, globalization rules the modern world...

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