Today, a historic opportunity appears to present itself. This is the chance to link the stabilization of the global climate with the financing of tropical forest conservation. The effort to link these two key parts of the "Global Commons" into a conservation and financing program was a key agenda item at the Copenhagen Conference, COP-15, held in December 2009. The proposal, called Reduced Emissions from Deforestation and Degradation (REDD), envisions creating marketable carbon offset rights representing the carbon content of tropical forests. These offsets would be sold to firms in the industrial world operating under emissions caps. This system would create incentives to preserve the forest, along with the funds needed to ensure implementation. Investing in natural tropical forests, under existing economic and social conditions, is generally not attractive. In most tropical nations, poor governance and contested property rights are barriers to investment. Future population pressures are also likely to intensify. Western Europe has had experience in managing complex, highly fragmented, and poorly documented forest rights: the forest use rights of medieval times. The fact that adjusting them to modern needs took centuries and generated severe conflict reminds us how difficult massive changes in customary rights can be. Thoughtful study of this experience could generate ideas for managing transitions in tenure rights in the tropical world. From a legal standpoint, a sale of a carbon right in a forest is an exceptionally complex transaction in real property. The frustrations of at Copenhagen reflect the bedrock fact that saving tropical forests is complicated. The prospect REDD can deliver early progress on saving tropical forests should be viewed as an untested hypothesis. Achieving REDD-readiness is likely to be a work of decades if not generations.
ABSTRACT I. INTRODUCTION II. CARBON RIGHTS AND TROPICAL FORESTS A. What Is REDD? B. Setting: The Tropical Forest Figure 1: Forest Area (2005) Figure 2: Percent of Natural Forest Sustainably Managed, as Estimated by International Tropical Timber Organization 2006 1. Economics of Tropic Forest Management 2. Economic Challenges and Population Pressures Figure 3: Population Pressures on Forest 3. Governance Challenges Figure 4: Failed States Index Rank, 2008 Figure 5. World Forest Area 2005 C. Delivering a Marketable Carbon Credit: Compliance Market 1. What Is a REDD Project? 2. Carbon Credit as Real Estate Transaction: Who Owns the Carbon? 3. Who Owns the Land? 4. Contracting Carbon for a Century III. LESSONS FROM COMMONS THEORY AND HISTORY A. Theory of the Commons and Its Management 1. Atmosphere as a Commons 2. The Tropical Forest as a Commons B. Learning from Ancient Parchments: Medieval Europe IV. COPENHAGEN AND REDD A. What Happened--and Didn't Happen--.at Copenhagen B. Policy Learning and REDD: Programmatic Puzzles C. Informal Observations on the Major Policy Challenges V. CONCLUSION "Going up that river was like travelling back to the earliest beginnings of the world, when vegetation rioted on the earth and the big trees were kings. An empty stream, a great silence, an impenetrable forest." (1)
--Joseph Conrad, Heart of Darkness
At the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development, General Assembly president, Dr. Ali Abdussalam Treki, urged his listeners to consider:
[T]he Earth's biosphere as the common heritage of all life, with humanity as its guardian. It belongs to the common good of humanity and the Earth, as stated at the 1972 United Nations Conference on the Human Environment ... The same can be said of forests, especially tropical and sub-tropical forests, where the greatest biodiversity and humidity necessary to Earth's vitality are concentrated ... (2)
That the atmosphere is a Global Commons is self-evident. There exist no property rights to the atmosphere. (3) No national claims, other than overflight rights, are asserted by individual nations, and these claims are based on land boundaries only. The forest, however, is not obviously a Commons. Instead, over history, forests have been treated in law and policy as simply another form of real estate, as property subject to ownership by sovereigns, institutions, individuals, communities, or corporations, as local cultures and situations warrant.
Today, many are joining Dr. Abdussalam in asserting that the remaining tropical forest should be treated as a Global Commons. (4) Recent events have generated extensive press interest in climate issues and the potential role of forests. (5) Governments of major tropical nations, however, have not always welcomed this perspective. Instead, many saw it as a form of neo-colonialism designed to control their resources and bar them from developing employment, industry and trade. They found it especially galling, since many of the industrial nations describing tropical forests as a "global heritage" had only recently finished destroying much, if not all, of their own primary forest.
These two Commons are linked. They are linked because the world's forests contain more carbon than does the atmosphere. (6) The forests and marshes of the past gave rise, following millions of years of geological conversions, to the oil, gas, and coal that fuel the modern industrial age. Today, the clearance of tropical forests is believed to contribute about 12% of total carbon emissions to the atmosphere every year. (7)
This essay breaks no new theoretical ground. Rather, it explores some major challenges and barriers to implementing programs to preserve and manage the tropical forest as a common heritage of humankind. In particular it focuses on what is required to retain tropical forests. Section II sketches the current forest conditions in the tropics and discusses why sustainable management is not being achieved. Section III appeals to history and economic theory for ideas. Accepted criteria for success in managing common property resources are compared to the concrete conditions now existing in most tropical forest nations today. This turns out to be a sobering exercise. It next looks to experience in Medieval Europe in managing forest use rights that resemble customary rights in existence in many tropical forest areas today. This excursion into past history illustrates how long it takes and how difficult it is to remodel complex and fragmented systems of use rights. Section IV offers general observations about the Copenhagen Climate summit and major policy problems to be faced, as well as a listing of what may be termed the programmatic puzzles to be addressed.
The concluding Section V closes with the assertion that the feasibility of a program like REDD remains an untested hypothesis. Unless dramatic and rapid policy learning is accompanied by equally dramatic governance and tenure reforms, the chances of the hypothesis working out favorably in practice are low. The obstacles lie primarily in the massive economic and social challenges of achieving REDD-Readiness in these nations.
CARBON RIGHTS AND TROPICAL FORESTS
What Is REDD?
REDD, which is an acronym for Reduced Emissions from Deforestation and Degradation, (8) refers to a program under development by the signatories to the Kyoto protocol. (9) This initiative was proposed by rainforest nations to link forest preservation with the global carbon cycle. The concept is that by conserving tropical forests, the CO2 contained in them can be retained in place, and prevented from further increasing the carbon content of the atmosphere. (10) proposals to provide incentives for tropical forest preservation have been discussed for some time. (11) Industrial nations considering carbon caps have an additional reason for interest in avoided deforestation projects: research has suggested that carbon offsets based on REDD projects will be cheaper to purchase than will emissions allowances in cap and trade systems. (12) Hence, use of such offsets can reduce the cost of achieving a given level of emission reductions for emitters in industrial nations. (13)
The term REDD initially addressed only retaining carbon stored in forests. More commonly today, the concept has been expanded to "REDD +," which addresses social issues and sustainable development. The concept of "REDD ++" is now emerging, embracing entire rural landscapes including agriculture. (14)
As the Kyoto Protocol was originally being negotiated, using carbon rights in tropical forests as offsets to emissions in developing nations was considered impractical. (15) One reason was that European nations doubted the credibility of long-term carbon storage by such means. Major tropical nations were opposed to international direction concerning the retention of their forests. They considered this a question of their own sovereignty and economic development. Brazil was one example.
In recent years, attitudes have shifted: many tropical nations have become aware of the benefits from retaining forests, and the costs of losing them. Costs of losing tropical forest cover a wide range of impacts from losing sources of fodder, food crops and medicinals, to losing fuelwood supplies, to damaging important watersheds, to destroying areas important for their religious or cultural values. (16) Further, the possibility of compensating them for opportunity costs of forest conservation out of revenues from selling carbon credits became more appealing. The development of REDD as a serious policy option was pushed forward when a group of nations, led by Papua New Guinea and Costa Rica, formed the Coalition of Rainforest Nations. (17) They urged the United Nations to amend its previous decision not to include Avoided Deforestation as an eligible carbon offset. At its late 2007 Bali meetings (COP-13), the UNFCCC members adopted a "Bali Action Plan" that mandated working groups to develop a program to use carbon...