(Republished today Jan. 24, 2023 and made more clear …from Oct. 30, 2022, before Lula was re-elected.)
Opinion on an opinion by Mathew Carr (CarrZee)
I’m not surprised, yet slightly amazed at the extent of the bias of The New York Times.
In a video opinion piece the NYT favours Lula de Silva because rival candidate and incumbent Jair Bolsonaro is apparently “destroying the basis for life on earth” for allowing the logging of the Amazon, the world’s biggest forest.
The NYT (pretty much) conveniently ignores that the rich world has already destroyed much of the forest on its own land.
This forest destruction and rampant polluting by about 1 billion people * means poorer countries with about 7 billion people and with big forests have been partially removing the heat-trapping gas from the atmosphere produced by wealthy nations … for free — ever since industrialisation started 200 years ago in England.
[*To be sure it’s really mainly the richest of the 1 billion]
The creation of the UN Framework Convention on Climate change three decades ago should have meant that countries with big and small forests would be financially rewarded for processing the heat trapping gas out of the atmosphere for the rich countries producing it.
But, because of sheer greed (and the global complexity of the negotiations), that reward has still not appeared.
Next month, at climate talks in Egypt, the world has its 27th chance to repair that injustice, at climate talks called COP27.
Will it? Given the parlous state of global geopolitics, I doubt it.
Yet, there’s a chance the talks will succeed, after failing for so long.
I’m not calling him a climate hero quite yet, but the reason for that chance is down to Bolsonaro’s hard-ball negotiation tactics.
After the world agreed the Paris climate accord in late 2015, something weird happened in response.
In 2016, deforestation surged.
See this chart.
Cutting Deforestation to Zero by 2030
Source: Forest Declaration Assessment — see notes, below
What the chart shows (in crude terms, according to me) is this: if the Paris climate deal continues to fail to incentivize tree protection, deforestion could almost double to 11 million hectares a year (2016) from 6 million (2015). It was about 6 million tons still in 2021.
This related chart below from the same report shows South America (Latin American countries), to be sure especially Brazil, was a major contributor to the surge.
On the surface, this surge in deforestation seems crazy. It appears to go completely against the spirit of Paris.
Yet, the Paris deal included a section that allows collaboration between nations to save the climate. The deal gave countries 5 years to set the Paris deal’s rules. It should have been done by 2020, but the wrangling continues and the hard ball is harder than ever.
U.S. president Donald Trump’s election seems to be part of the hardball.
He literally made coal great again and now in 2022, the USA is getting record revenue from selling natural gas and crude oil. Even if US domestic emissions have fallen the past several years, America is winning like never before from production of heat-trapping gas.
Bolsonaro’s response has been to expand Brazil’s agricultural and industrial landscape, to boost its ability to create wealth in a similar way to that used by the US, Europe, Japan, Canada and (my home country Australia) during the past three decades.
Scientists link the destruction of the Amazon to drought in the USA. The US agriculture industry is one of the biggest beneficiaries of the Amazon.
If President Joe Biden hasn’t gotten the message, then it’s not Bolsonaro’s fault.
The NYT and the US (using an outdated colonial-era playbook) is turning victim Brazil into the villain. It’s classic gaslighting.
What the NYT ignores is that Brazil has now shown in certain terms why the world should indeed place a higher value on existing forests.
If the Egypt talks fail again to value existing trees, expect another surge in deforestation.
There’s a good chance that failure might happen. So, if you are a tree. Watch out.
Russia’s related climate hardball, in response to the US and NATO’s bullying hardball, is either making it more likely or less likely. I’m not sure. That’s another story, yet related to Brazil’s tension-filled tale.
Until elected (and self appointed) politicians around the world agree market rules (or non-market rules) that value forests (and Russia has the most land in the world), the chance of saving the climate continues to lessen dramatically.
Live Policy
That rule making is live. (I provide some details below, for convenience.)
Indeed, it’s so alive, the various rainforest countries are apparently competing to win the climate finance needed for forest protection.
The self-destructive standoff between countries that have deforested and those that haven’t yet is also why carbon markets don’t work so well … so far at least.
How can carbon dioxide allowances and voluntary emissions credits be given a high value when some countries (the USA I’m especially looking at you) still allow oil companies to keep sending heat-trapping gas into the atmosphere for little or no cost?
(Because the hardball negotiation tactics prevents rational policy making, there is almost zero demand for carbon credits from the US.
Therefore those carbon credits and allowances pretty much cannot enjoy a high value because of the artificially low demand – though some regions, including the EU, have succeeded in part.)
How can expensive carbon capture and removal and storage projects be rewarded at a high price say $200-$600 a ton, when countries already providing that service using trees are doing it for free (as their climate crumbles because of the rich)?
Rainforest countries struggle to get $10/ton.
Again, the answer is — because of hardball negotiation tactics — direct air capture can’t be made viable by carbon markets because the demand is still artificially low..
Bolsonaro’s hardball shows why the climate solution needs to be global — it needs to be credible and probably under the UN and / or at least the G20) and it needs these additional pro-forest incentives to be effective.
Right now, the Paris climate deal remains a bare-bones structure.
Flesh is needed to grow muscle (and regulatory teeth).
Much of this policy work has been going on during the past seven, fraught years — largely behind the scenes of stupidity that have included huge increases in fossil-fuel output and use, the destruction of nature, Brexit, hardman national leaders, war that’s killed 14,000 or so, schoolyard demonization, distracting culture wars and namecalling (not to mention the deadly snowballing climate calamities).
Hopefully, it’s finally coming to a head.
Two elections
Which brings us back to tomorrow’s Brazil election and another one a week later.
Even if Bolsonaro loses, I predict de Silva will continue to play hardball until a globalish deal is done.
So the choice is not as clear as the NYT says it is. Far from it.
One thing seems clear to me. The greedy US (and it’s apparent proxy the NYT) prefers it when the deprived poorer people of the world fail to stand up for themselves.
Or at least those are the optics we are being presented with.
Exposed by its shrill language and biased context that ignores history, the NYT seems to think de Silva will be softer on the US. I don’t think he will, if he wins.
What might be nice is if Biden explains some of this climate context to his voters and potential supporters, the public generally in the US and globally — ahead of the Nov. 6 midterm elections in the USA.
He has one week to go where his former boss Barack Obama disappointedly failed to. The name of his political party requires it of him.
(Made some of the language clearer on Jan. 23, 2023)
NOTES:
SECTION OF THIS REPORT — UNEDITED SNIP REPRODUCED BELOW FOR CONVENIENCE AND FULL REPORT FOR DOWNLOAD. Excuse the formatting issues.
The Forest Declaration Assessment is a continual and collaborative process achieved collectively by civil
society organizations and researchers, known as the Forest Declaration Assessment Partners. Previously
the NYDF Progress Assessment, the Forest Declaration Assessment has since 2015 published annual
updates on progress toward global forest goals. All assessment findings undergo a rigorous peer review
process conducted by experts across the globe. To learn more about the Forest Declaration Assessment,
please visit www.forestdeclaration.org/about/assessment.
This report belongs to the public domain. Users are welcome to download, save, or distribute this report
electronically or in any other format. A digital copy of this assessment, along with previous progress
assessments, are available at http://www.forestdeclaration.org.
- Have private companies made finance flows consistent
with forest goals?
2.1 Sustainable investments in forest protection and conservation, commodity production,
and resource extraction
Private finance has considerable leverage power to steer commodity production onto a sustainable trajectory and
enable forest protection and conservation. This section assesses the extent to which private investment is being
directed into activities that increase the sustainability of commodity production and forest management, whether
through targeted green investment or by adding forest safeguards to financial flows. A 2016 estimate from Vivid
Economics states that it would take USD 160-233 billion in direct investment and trade finance each year to make four
of the major forest-damaging commodity supply chains—cattle, soy, palm oil, and pulp and paper—deforestationfree.28
The limited data that are available suggest that the magnitude of private green finance reaches several
billion USD, a fraction of what is needed. In our 2017 report, the Assessment Partners estimated the
cumulative private sector investment in forest-related subsectors amounted to USD 3.3 billion over the
period 2009-15.29 A more recent estimate suggested that the private sector now spends an average of USD 7
billion per year on sustainable supply chains alone.30 Other private funding is also being channeled into
sustainable land practices through public-private partnerships, with an estimate from 2020 suggesting these
partnerships account for at least USD 683 million globally.31 On the philanthropic side, of the average annual
USD 1.3 billion channeled to climate change mitigation between 2015-20, only around USD 95 million
annually was dedicated to direct forest activities.32
Private finance flowing to grey investments is equally hard to quantify. Anecdotal evidence suggests that, as
with public investment, it dwarfs green finance flows. Non-profit Global Canopy reported that the top 150
financial institutions included in their 2022 Forest 500 assessment provide USD 7.1 trillion to the 350
companies with the greatest influence in forest-risk commodity supply chains.
o,33 It is worth noting that
given the limited scope of this estimate, comprehensive figures are likely to be of much larger magnitude.
Another report indicates that between 2015-20, global meat and dairy companies—some of the largest
contributing industries to tropical deforestationp—received over USD 478 billion in financing from private
financial entities.34
Most of the major financial institutions exposed to deforestation do not have any deforestation safeguards
for their investments.q In 2021, this represented more than USD 2.6 trillion in investments in high
deforestation risk commodities that are not covered by a forest conservation policy.35 - Are carbon markets contributing to forest finance?
Private sector actors have multiple opportunities to invest in nature conservation and restoration, including
market-based options such as participation in carbon markets with forest-based credits, and non-market
options such as support for implementation of jurisdictional or landscape-scale sustainability activities. In the
absence of data on private sector direct investments in jurisdictional and landscape approaches, we are
unable to assess those contributions. However, data is available for finance flowing through carbon markets;
therefore, this section assesses progress toward leveraging carbon markets for forest goals.
o Global Canopy identifies and assesses the 150 financial institutions providing the most finance to the 350 companies with
the greatest exposure to tropical deforestation (as identified by the Forest 500 assessment). This figure includes
shareholdings, loans, underwritings, and bondholdings.
p Cattle rearing alone has been estimated to account for 36 percent of tree cover loss associated with agriculture occurring
between the years 2001 and 2015. See WRI (2018) Global Forest Review: Deforestation Linked to Agriculture. Available at
https://research.wri.org/gfr/forest-extent-indicators/deforestationagriculture?utm_medium=blog&utm_source=insights&utm_campaign=globalforestreview. q In Global Canopy’s 2022 Forest 500 assessment, 93 of the 150 financial institutions most exposed to deforestation do not
have a single deforestation policy covering their investments in companies in the highest forest-risk commodity supply
chains.
3.1 Leveraging voluntary carbon markets for forests
The voluntary carbon market (VCM) allows companies, private entities, and governments to purchase carbon credits
generated by a wide range of emissions mitigation projects, certified by an array of crediting standards and programs.
While decarbonization through direct emission reductions in company and institutions’ own value chains should be
prioritized, carbon credits can—according to net zero frameworks such as the SBTi36—be used for compensating or
neutralizing residual emissions that cannot yet be mitigated or to finance additional climate mitigation beyond their
science-based emission reduction targets. Using a carbon price that includes the social and environmental costs of
emissions, purchasing high quality credits can finance additional reductions while contributing to and supporting
future climate solutions.37 With adequate levels of ambition, integrity and strategic alignment, carbon credits can
provide a source of funding to support the development of jurisdictional REDD+ programs and to catalyze
implementation and results at scale.
Finance flows generated by the VCM still remain miniscule compared to the (up to) USD 460 billion per year
in finance needs estimated for the protection, restoration, and enhancement of forests globally.38 The
numbers are however growing quickly with the values traded in just the first half of 2021—USD 544 million—
equating to more than double the 2020 total.39
Demand for nature-based carbon credits from project-scale and jurisdictional-scale activities has grown
significantly in recent years. The volume of carbon credits traded in the VCM exploded in 2021, reaching a
total of more than 354 megatons CO2-equivalent (Mt CO2e), 89 percent more than in 2020.40 This growth was
primarily driven by the increasing number of companies using carbon credits to meet their net zero
commitments or to contribute to mitigation beyond their targets. Alongside voluntary net-zero
commitments, a variety of sectoral- and non-governmental organization (NGO)- led initiatives have emerged
in recent years to support companies in the limited use of certain credits to offset residual emissions, in line
with SBTi.r Increased interest in jurisdictional REDD+ means that the issuance of credits may further increase
in coming years. Issuances elsewhere are already rising to meet—and possibly exceed—current demand,
with Gabon set to issue over 90 million REDD+ credits, and Belize a further 6 million in the coming year.41
Forestry and land use carbon credits have gained considerable prominence in the VCM, accounting for over
45 percent of all credits issued in 2021.42 Of these credits, approximately 56 percent were generated from
avoided deforestation projects, 27 percent from avoided conversion, 13 percent from afforestation and
reforestation, and 3 percent from improved forest management projects.s,43 Forest carbon credits were
transacted nearly 2.7 times more than in 2020, amounting to a total 160 MtCO2e over the full course of the
year.44
The average price at which such credits were sold in the VCM during 2021 was estimated at between USD 4.7
and USD 15 per ton of CO2.
45 This price is far below the cost range economists recommended for meeting the
Paris Agreement’s 1.5-2 degree C target, which ranges between USD 50 and 250 per ton of CO2.
46 Cheap
forest and land use carbon credits are unlikely to cover the true cost of impactful conservation and
restoration activities; nor can they generate adequate levels of income for implicated communities on the
ground.
r Examples include the UNFCCC’s Race to Zero initiative, which now hosts 5,235 company commitments, and the Glasgow
Financial Alliance for Net Zero, a coalition of financial institutions representing around 40 percent of global banking assets
that have now made such commitments.
s The remaining 1 percent were related to carbon sequestration in agriculture, reduced emissions in agriculture, and
wetland restoration.
Credits in the land and forest sector have historically been criticized for issues related to additionality,
permanence, baselines for measuring emission reductions, and adverse impacts on IPs and LCs. Skepticism,
not just around forest and land use credits, has spurred the development of integrity initiatives in recent
years. These initiatives aim to help projects meet quality standards, such as demonstrating clear
additionality, and robust baselines to accurately quantify emission reductions or removals. Examples include
the Integrity Council for the Voluntary Carbon Market, which is currently developing guidelines to promote
higher quality and standardization of the market; and the Voluntary Carbon Markets Integrity Initiative
(VCMI), a multi-stakeholder platform developed to drive credible, net-zero aligned participation in the
market. Credits from the land sector remain attractive to voluntary market buyers with net zero targets that
depend on removals to neutralize emissions that cannot yet be mitigated through direct measures. For
example, energy sector companies—primarily large oil and gas companies—continue to be the biggest
purchasers of forest and land use carbon credits, responsible for approximately 70 percent of all carbon
credits purchased between January and September 2021.
3.2 Using compliance markets for mandatory emission reductions to support forests
Similarly, compliance markets allow entities covered by mandatory emission reduction commitments to buy carbon
credits to meet their obligations. This includes national obligations under international agreements such as the Paris
Agreement; obligations imposed by certain sectors such as the Carbon Offsetting and Reduction Scheme for
International Aviation (CORSIA); and obligations imposed by domestic laws, such as a national emissions trading
scheme (ETS) or carbon tax.
The overall contribution of compliance schemes to forest finance is small and is likely to remain so in the
near future. Only 10 percent of the carbon credits issued globally in 2021 came from schemes that allow
carbon credit use from forests. 47 The carbon crediting mechanism for the aviation sector, CORSIA, is often
cited as a potential driver for future carbon credit demand. Yet, in light of a decision to set the baseline at
2019 emissions only rather than the average of both the years 2019 and 2020, it is likely that demand for
(nature-based) carbon credits from CORSIA will remain low.48
New rules for international carbon markets under the United Nations Framework Convention on Climate
Change (UNFCCC) were defined at COP26 in 2021, potentially opening opportunities for channeling forest
finance in the long term. COP26 saw the finalization of the Paris Agreement Article 6 rulebook, which
provides clarity on how compliance markets can contribute to meeting NDC goals as well as enhance
climate ambition through voluntary cooperation. The rulebook sets the conditions for the international
trading and transfer of emission reduction units by enabling two market-based mechanisms (Article 6.2 and
Article 6.4). Regulations outlined so far suggest these mechanisms will be relatively accommodating for
forest and land use (FLU) projects. Unlike the Clean Development Mechanism (CDM), they do not explicitly
exclude emission reductions from avoided deforestation and avoided forest conversion. Some uncertainty
remains, however, over the eligibility of credits generated from emissions avoidance activities—a decision
which will be made at COP27.49 Thus, while experts hope that Article 6 can become a successful mechanism
for leveraging finance into FLU activities, it remains to be seen how final regulations will shape the quantity
and quality of internationally traded FLU carbon credits.