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Published on December 20th, 2009 | by Susan Kraemer

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Now That the Copenhagen Agreement Puts Deforestation on the Table, What is it Worth?

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December 20th, 2009 by
 

Last year when the sub prime investment market was first collapsing, the BBC posed a novel question that is worth thinking about again, because we are about to embark on a post-Copenhagen investment in preventing deforestation in developing countries, like the Amazon.

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The question that Nature’s Capital posed was  “Why should we invest in preserving the Amazon? What’s in it for me?”

Quite a lot, as it turns out.

Each year the Amazon provides about $50 billion worth of utility service. It cleans air. It provides air conditioning. It creates water for agriculture. The water it creates makes possible energy production from everything from bio-fuels to… well, even to tar sands.

To replicate all the services it provides would use so much energy that if we were to build a giant machine to do that work instead of the Amazon, it would take 135 years of power from the largest hydro electric power plant on the planet.

The Amazon really is a giant planetary utility, performing a service that makes possible billions of dollars worth of industrial energy and food production, by releasing 20 billion tonnes of water into the atmosphere every day.

Like any utility, if we neglect it and let it run down; it becomes less and less productive. It will depreciate in value. The danger is that even a giant planetary utility like the Amazon might become decommissioned altogether.

The utility benefits all of humanity, and so all of humanity has an interest in preserving its services. However, that’s not happening. None of us is investing in the natural utility to keep it going. By contrast, we are deforesting it, or eroding our capital. Something accountants call “depreciation” is setting in.

Letting it burn endangers the foundation of our existence. Our natural capital is no longer generating any “income”. Whats worse; it gets neglected and rusty. Its deforestation now generates 7 billion tonnes of carbon emissions a year.

Shouldn’t we invest in this giant utility, just like we’d invest in any other utility?

Natural capital investments may turn out to be as safe as investments in any other public utilities. We need the equivalent of an ecosystem services market with an environmental regulatory body that forces us to value the common goods that we continue to plunder at our peril.

This is why we need a cap and trade market in carbon emissions. This puts a real market value on an intangible like stopping environmental destruction. Trade generates the funds needed to protect an asset that is otherwise brushed aside by the invisible hand.

Image: Flikr user wildimagephoto

Source: Nature’s Capital

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About the Author

writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.



  • Susan Kraemer

    “How would they cook food with solar?” Solar power makes electricity. So they would have electricity, many for the first time: that means lights, electric stoves, TV, etc. Or they could use solar ovens – very low tech but effective too.

  • Stev

    Old growth forests are carbon neutral, rotting wood releases the carbon back into the air. These native people would not be allowed to pick up wood from the ground? How will they cook food with solar panels again? And paying farmers money to not farm? I’m not a farmer, will I get paid not to farm? This sounds like utter nonsense. I hope the world does suffer a complete catastrophe so I don’t have to hear any of this crap anymore. Nuclear power is the only thing that can reduce carbon but we’re more interested in paying people money that doesn’t exist to influence people to do things they will never do.

  • Stev

    Old growth forests are carbon neutral, rotting wood releases the carbon back into the air. These native people would not be allowed to pick up wood from the ground? How will they cook food with solar panels again? And paying farmers money to not farm? I’m not a farmer, will I get paid not to farm? This sounds like utter nonsense. I hope the world does suffer a complete catastrophe so I don’t have to hear any of this crap anymore. Nuclear power is the only thing that can reduce carbon but we’re more interested in paying people money that doesn’t exist to influence people to do things they will never do.

  • Susan Kraemer

    “How would they cook food with solar?” Solar power makes electricity. So they would have electricity, many for the first time: that means lights, electric stoves, TV, etc. Or they could use solar ovens – very low tech but effective too.

  • Susan Kraemer

    It works to encourage reforestation because you can earn RECs for doing anything that reduces greenhouse gas emissions. (Leaving old growth forest qualifies for that.)

    One example is the old growth Redwood forest in CA, which under CA cap and trade can be preserved now that it has a greenhouse-gas-reducing value.

    http://articles.latimes.com/2009/jun/01/local/me-forests-carbon1

    So here in the US farmers would be paid to leave some fallow land, not farm it under the climate bill in congress.

    Under Copenhagen the Amazon native people would be paid to not use trees for firewood, so they would have money to buy solar panels or other clean power for electricity instead.

  • Stev

    I agree in stopping deforestation and continuing to reforest areas. I can’t see how capping and trading carbon emissions will help that. It seems more likely that by using less fossil fuels, you are led down a path of bio fuels which will lead to massive deforestation. Using fossil fuels is the reason we don’t need to cut and burn trees in America.

  • Stev

    I agree in stopping deforestation and continuing to reforest areas. I can’t see how capping and trading carbon emissions will help that. It seems more likely that by using less fossil fuels, you are led down a path of bio fuels which will lead to massive deforestation. Using fossil fuels is the reason we don’t need to cut and burn trees in America.

  • Susan Kraemer

    It works to encourage reforestation because you can earn RECs for doing anything that reduces greenhouse gas emissions. (Leaving old growth forest qualifies for that.)

    One example is the old growth Redwood forest in CA, which under CA cap and trade can be preserved now that it has a greenhouse-gas-reducing value.

    http://articles.latimes.com/2009/jun/01/local/me-forests-carbon1

    So here in the US farmers would be paid to leave some fallow land, not farm it under the climate bill in congress.

    Under Copenhagen the Amazon native people would be paid to not use trees for firewood, so they would have money to buy solar panels or other clean power for electricity instead.

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