Tradable permits proposed to slow deforestation.

• Author: Herro, Alana
• Position: EYE ON EARTH

Environmental groups are pushing for the use of market mechanisms to address one of the world's largest sources of greenhouse gas emissions: deforestation. Environmental Defense and the Amazon Institute for Environmental Research are among the groups lobbying for the inclusion of one specific economic approach, known as Compensated Reduction (CR), in negotiations for the second phase of the Kyoto Protocol, the international treaty to reduce global greenhouse gas (GHG) emissions.

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Similar to carbon trading, the CR plan would award tradable "credits" to countries that voluntarily reduce their deforestation rates below historical baseline levels. Those countries could then sell the credits to other nations that are unable to meet their emissions reduction goals. By providing a monetary incentive for nations to preserve their forests, the strategy would encourage greater developing-country participation in the Kyoto agreement (which currently only applies to industrial countries), the environmental groups say.

To ensure the validity of countries' claims, compensation would be given only after a specific period of time and after sufficient satellite and...