Growing pains

Earth 24 October 1998

IN COSTA RICA, money grows on trees. Thanks to a deal struck by the government, American and Norwegian businesses are about to pay farmers there to plant forests on their land. The farmers do not even have to produce timber – they just have to let the trees grow.

The companies will pay the farmers $10 for every tonne of carbon that their trees absorb from the atmosphere and convert to plant tissue during photosynthesis. In return, the companies will get certificates declaring that they have paid for CO2 to be removed from the atmosphere, or “sequestered”. They are hoping that these certificates, known as carbon credits, will soon become valuable commodities.

The deal will help fulfill the aims of the UN summit on climate change in Kyoto last December, which set targets for industrialised countries to reduce their emissions of CO2 and other so-called greenhouse gases. The Kyoto protocol allows countries to meet part of their targets by planting forests to soak up CO2 instead of making cuts. It also sets the scene for nations and businesses to trade in carbon credits.

The Costa Rican government and its partners, which include the Norwegian industrial giant ABB and a Chicago company called Environmental Financial Products, believe they are in at the start of a multibillion dollar business. Whether or not they are right could be decided next month, when representatives of more than a hundred governments will meet in Buenos Aires to fill out the small print of the deal struck at the Kyoto summit.


Costa Rica has already sold credits for more than 200 000 tonnes of carbon. Many analysts believe that once the system is up and running, carbon credits could change hands for $100 a tonne or more. If so, the companies that are buying credits in Costa Rica today for $10 a tonne could make vast profits. “The price is right,” says Richard Sandor, the chief executive of Environmental Financial Products and a long-standing advocate of trading in environmental resources.

But there is a host of practical problems with carbon sequestration. Most importantly, there is no way as yet to accurately measure how much carbon is absorbed or released by forests as they grow, die or burn. Even the European Union is unsure how much its forests are soaking up. After three years of examining satellite images and measuring the flow of CO2 above 17 forests, the EU’s best guess is somewhere between 120 and 280 million tonnes a year (This Week, 3 October, p 20).

John Lanchbery, who analysed the Kyoto agreement for the Verification Technology Information Centre in London, says it is inherently difficult to estimate how much CO2 is produced or absorbed by biological activity. “The uncertainty can be well in excess of 50 per cent.” For instance, different species grow at different rates. And trees assimilate carbon fastest when they are young and slow down as they get older.

To complicate matters further, the growth rates of trees depend on the climate, itself made increasingly uncertain by global warming. A drought could drastically slow the uptake of CO2, or even put it into reverse if the forest caught fire. Most of the carbon can be released from burning forests within a few days or weeks. And plant diseases, which themselves become unpredictable with climate change, can kill off vegetation, with similar effects.

John Moncrieff of the Institute of Ecology and Resource Management at the University of Edinburgh, who has been carrying out detailed studies of the Griffin forest in Scotland, points to other factors that affect carbon sequestration, such as the forest canopy closing as the trees grow, and the impact of other pollutants. Nitrogen oxides in acid rain, for instance, have a considerable effect on a forest’s capacity for absorbing carbon.

With no way of knowing exactly how much carbon trees take from the atmosphere, a reliable scheme to trade in carbon credits looks impossible. Yet new forests have a big potential as carbon sinks. In optimum conditions, tropical plantations can absorb up to 100 tonnes or more of CO2 per hectare in 50 years. If the UN’s scientific think-tank, the Intergovernmental Panel on Climate Change (IPCC), is correct in its 1995 estimate that a global reforestation programme could cover 350 million hectares – an area slightly larger than the EU – then this would lead to the sequestration of up to 35 billion tonnes of carbon in 50 years. That is equivalent to soaking up around 6 per cent of projected CO2 emissions between now and 2050 (see Figure).

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But ideal conditions seldom exist. And apart from the scientific uncertainty, there are other problems with sequestration. Many conservationists believe that carbon credits could be disastrous for the world’s surviving forests. Adam Markham of the World Wildlife Fund (WWF) in Washington DC fears that foresters will chop down existing natural forests to make way for fast-growing carbon-guzzling trees. In the process, the millions of people who rely on these forests will lose out.

In addition, for maximum impact most carbon-sink forests would have to be in the tropics, where trees grow fastest. But there are huge competing pressures there. The UN’s Food and Agricultural Organization estimates that an extra 90 million hectares of new agricultural land will be needed, mostly in the tropics, within the next decade alone. Carbon credits would have to offer higher profits than cash crops such as rubber and palm oil.

Then there is the problem of what to do with carbon-sink forests once they have matured and are emitting, through decomposition, as much carbon dioxide as they absorb. These trees must then be removed or managed to ensure that the carbon they have locked up is not simply released again into the atmosphere.

Others claim that carbon sinks will allow industrialised nations to simply put off the more difficult task of cutting pollution at home, or to wriggle off the hook of their emissions targets. For instance, foresters might sell carbon credits for forests they had always intended to plant, thereby reducing their targets without the environment gaining anything. Last year, the US government proposed that a scheme to pay Bolivian peasants to grow orchids should qualify for carbon credits on the grounds that it would discourage them from chopping down forests.

Clearly, the rules by which countries can establish carbon sinks will be vital. But the Buenos Aires meeting will have to deliberate in a scientific fog – in June, the Kyoto protocol’s science advisory committee referred crucial questions about carbon sequestration to the IPCC, which will not report until late in 2000.

On the face of it, there is no hurry. The Kyoto protocol’s targets do not come into force until 2008. But countries need to know what they are signing up to – without a clear programme for carbon sinks, the Clinton administration will find it much harder to sell the Kyoto protocol to a hostile Congress.

Despite the uncertainties, the Kyoto protocol is already having a major influence on the shape of forests, says Nigel Dudley, editor of the WWF forest conservation newsletter. Many corporations are starting to plant trees and seek partnerships with conservation organisations. Strong environmental and social guidelines are urgently needed, he warns. Without them, countries and businesses will pour money into projects that are at best useless, and at worst harmful.

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