Carbon Credits Could Help Orangutans, Elephants

June 19, 2009 -- Carbon markets were designed to reduce greenhouse gas emissions. The system could also be a financially feasible way to save tropical forests, according to a new study that estimated how much it would cost to prevent logging in Borneo's forests.

What's more, an established market would help buoy orangutans, pygmy elephants and other threatened species.

"I think it's our best chance we've ever had to conserve forests," said Oscar Venter, a conservation biologist at the University of Queensland in Australia. "There is a big potential positive here for the twin objectives of climate mitigation and biodiversity protection."

Deforestation in the tropics accounts for about 20 percent of global greenhouse emissions -- more than from any other source, including vehicles. Animals that live in native forests suffer as their habitats disappear.

In Indonesia, which emits the most land-generated greenhouse gasses of any country in the world, most forests are cut down to make way for oil palms. The industry is extremely profitable, and it's growing quickly. Palm oil appears in a large number of food products and is used for biofuel.

One idea to prevent palm plantations from replacing ever more tropical forests is to set up a type of carbon market based on payments for reduced emissions from deforestation and forest degradation (REDD). Instead of selling land to be developed, a country could sell carbon credits to an international market. Other countries could buy these credits to make up for exceeding limits set by the Kyoto Protocol or its successor. Purchased credits would guarantee that a certain plot of forest would remain standing.

In order for the system to work, a country like Indonesia would need to make as much or more money from selling the credits as it can make from developing palm plantations. Venter and colleagues wanted to know if that were possible.

First, the researchers looked at the financial reports of oil palm companies to figure out how much money palm plantations were actually bringing in. Those calculations included profits from oil and from the timber that is cut down to make way for the palms.

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Next, they considered all of the carbon produced when land is cleared for oil palm development. The value includes decomposition and burning of timber and vegetation. The team estimated these numbers over the next 30 years for all 808 palm plantations planned for forested areas in Kalimantan, the Indonesian region of Borneo. Overall, that area includes 3.3 million out of the country's 27 million hectares of forest habitat.

To match potential profits from oil palms, credits would have to cost between $10 and $33 per ton of carbon dioxide emitted, the team reported in the journal Conservation Letters. In current markets, prices range between $2 and $30 per ton.

"If this had come out and said we would need to price carbon at $100 to $200 a ton to make this feasible, we would have said, 'Oh crap. This is not going to help us,'" said Peter Kareiva, Chief Scientist at the Nature Conservancy in Washington, D.C. "This was a big deal to us to find out. It means we're going to invest in resources to make sure we do it right."

For wildlife, that investment would be well worth it. Forty of Kalimatan's 46 threatened mammals live in areas that are slated to become palm plantations, the study found. Orangutans are a particularly high-profile example.

The good news, Venter said, is that threatened mammal populations are twice as dense in areas that have the richest (and therefore cheapest) sources of carbon -- in places, for example, where the forest is thick and undisturbed.

"Conservationists had optimism that this carbon market was going to help them solve a lot of problems, but that all depends on where the animals live," Kareiva said. "It turns out that if in fact you go into this carbon business to slow down climate change, you will also get wildlife protection. It's like a free bonus."

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Treehugger.com: Creating a Global Carbon Market

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