U.S. companies could save tens of billions of dollars by investing in efforts to combat deforestation in developing nations instead of cleaning up their own domestic carbon dioxide emissions, according to a report released Wednesday.
The report, compiled by a high-powered bipartisan group, backs the use of "forest offsets" in the global effort to curb pollution that is heating up the atmosphere. It was released in advance of the upcoming Senate debate on climate legislation and an international meeting on the issue set for December in Copenhagen.
The burning of tropical forests and their conversion to cattle farms and soybean fields is responsible for about 17% of the emissions that are causing global warming -- more than all the world's cars, trucks, trains and planes combined -- scientists say.
"It is one of the few major sources of emissions that can be addressed cost-effectively now," said the report from the Commission on Climate and Tropical Forests, co-chaired by former Sen. Lincoln Chafee (R-R.I.) and John Podesta, chief of staff under President Clinton and now head of the Center for American Progress, a Washington-based think tank.
The panel's researchers estimate that if American companies invest about $60 billion between 2012 and 2020 to preserve rain forests in such countries as Brazil and Indonesia, they could achieve the same amount of global emissions cuts while avoiding the expense of about $110 billion on remedies in the United States.
That net savings of $50 billion might be enough to make climate legislation palatable to companies that have fiercely opposed tough global warming rules.
The 71-page report also calls on the U.S. government to make similar, multibillion-dollar investments to help developing nations survey their forests, measure their carbon, set up legal mechanisms to preserve them and enforce conservation.
But the massive use of offsets -- a way for companies to pay for emission reductions outside their own operations -- is controversial. Legislation pending before Congress would allocate money to preserve tropical forests by auctioning U.S. pollution permits, as well as by allowing corporate offsets under a carbon trading program.
Preventing deforestation is "an excellent way to mitigate the costs of other climate solutions," said Michael G. Morris, chief executive of American Electric Power and a member of the commission that produced the report. Ohio-based AEP, along with the Georgia-based Southern Co., burns more coal than any utility in the Western Hemisphere.
The Nature Conservancy, which has an extensive international forest program, was represented on the panel and endorsed its offset recommendations.
"Providing this opportunity can reduce the costs of legislation substantially," noted Eric Haxthausen, the organization's director of U.S. climate policy.
Many European environmental groups, however, along with Greenpeace, Friends of the Earth, and Rainforest Action Network, oppose offsets as "a way for corporations like American Electric Power to buy their way out of any pollution cuts, and avoid replacing coal with solar and wind power," said Rolf Skar, Greenpeace's senior forestry campaigner.
Tropical forest emissions should be included in a new international treaty to be considered in Copenhagen in December, the report says. With the United States leading "a global partnership," it adds, tropical deforestation could be halved within a decade and eliminated by 2030, an essential move if the climate is to be stabilized.
The 16-member commission includes former Sen. Chuck Hagel (R-Neb.), former U.S. Ambassador Thomas R. Pickering, former Undersecretary of State for Global Affairs Frank Loy and former Army Chief of Staff Gen. Gordon R. Sullivan.
Sullivan and another commissioner, former Deputy Undersecretary of Defense Sherri Goodman, called deforestation a national security issue because climate change could lead to political instability. "Many forest-abundant nations are located in regions where fragile states, extremists and political unrest are a serious concern," Goodman said.
California moved ahead of the federal government last month, adopting complex rules for regulating and verifying forest carbon in the voluntary carbon market.
Gov. Arnold Schwarzenegger has launched cooperative agreements with Brazil and Indonesia and other forest-rich nations to provide technical expertise with a view toward opening the state's planned cap-and-trade market to tropical forest offset programs.