World Bank Eyes Rainforest Investment
11/3/98
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Title: World Bank Eyes Rainforest Investment
Source: Reuters
Status: Copyrighted, contact source to reprint
Date: 11/3/98
BUENOS AIRES, Nov 3 (Reuters) - The World Bank at U.N. climate talks in
Buenos Aires unveiled on Tuesday a plan outlining ways that world forests
could be both preserved and profited from in the battle against global
warming.
Together with the U.S. Nature Conservancy and other scientific and
environmental bodies, the World Bank will counsel U.N. officials
struggling to rein in global hydrocarbon emissions in the next century on
viable investment mechanisms that would harness forests' ability to
absorb carbon dioxide (CO2).
Environment officials and climate experts from around the world have
gathered for a November 2-13 summit aimed at implementing pledges by
developed countries to reduce their emissions by over five percent from
1990 by around 2010.
Part of their plan will likely involve public and private sector
investment in the creation or preservation of world forests, which are
thought to possess nearly as much carbon as the atmosphere.
But questions still loom as to the scientific precision that carbon
absorption in trees can be quantified and how companies would be
reimbursed for the emission cuts their investments achieve.
Some companies have already poured millions of dollars into the
rainforests of Central and South America, optimistic that one day they
will be able to cash in on "credits" allocated in a future emissions
trading regime worked out by the United Nations.
Among them are U.S. energy firms PacificCorp, American Electric Power
(AEP.N) and BP America, which recently entered into a $9.5 million
investment with the Bolivian government to protect around 1.56 million
acres (630,000 hectares) of Amazon rainforest.
The companies hope eventually to pocket dividends from the estimated 15
million metric tonnes of carbon the acreage is capable of absorbing over
the next 30 years, provided the U.N. establishes an international
mechanism to reward its investment.
"These firms are fully aware of the uncertainty this investment
represents, as it is unclear what treatment carbon sinks will be given by
(U.N. negotiators.)," said Tia Nelson, of the Nature Conservancy, a
facilitator and partner in the Bolivia deal.
"But it puts them in the position to be at the cutting edge of a business
which has enormous potential," Nelson said.
Bolivian rainforests stand to gain as lumber company operations in the
assigned acreage have been effectively removed, thus guaranteeing the
safety of the forest's 820 bird, mammals, and reptile species.
But sceptics claim that protection of one forest region will inevitably
lead to industrial use in another, making a true assessment of net removal
of CO2 from the atmosphere near impossible.
Other observers worry that overblown government estimates of carbon
absorption potential could open giant loopholes for countries struggling
to meet their legally binding emissions cuts.
"We can't allow governments to take credit for what mother nature is
already doing to absorb the pollution we are putting into the atmosphere,"
said Alden Meyer of the U.S.-based Union of Concerned Scientists.
"But we do support U.N. efforts to create an incentive for private
companies to make these types of ecologically so investments," Meyer said.
Copyright 1998 Reuters Limited.All rights reserved.