Reporting from Cancun, Mexico — The Mexican state of Chiapas, home to the left-wing Zapatista revolt of the mid-1990s, is now eager to join a most capitalist enterprise: California's upcoming cap-and-trade market for carbon emissions.
Chiapas Gov. Juan Antonio Sabines Guerrero and California Environmental Protection Agency Secretary Linda Adams are making the rounds of the global climate talks in Cancun, touting a deal: California companies will pay Chiapas to protect its rainforest.
"California has opened its international market for carbon credits," Sabines said at a meeting of 700 forest advocates Wednesday, adding that Chiapas has the "best inventory of soil, forest and jungle" in Mexico. He estimated that Chiapas could sell credits of as much as 2 million metric tons into the California market over eight years.
Under California's cap-and-trade program, expected to be approved by the state's Air Resources Board next week, industries such as power plants and refineries could pay Chiapas to help save its rainforest in exchange for offsetting some of their own emissions in California. The amount of carbon in the forests that Chiapas saves from being burned or logged would have to be verified by international auditors. California companies could then use the credits to offset up to 2% of their emissions.
Market prices are highly uncertain, but if carbon credits sell at $20 a ton, that could mean as much as $40 million to help Chiapas save its forests. The cutting and burning of tropical forests worldwide, including the cloud forests in southern Mexico, accounts for as much as 15% of global greenhouse gas emissions, which are trapping heat in Earth's atmosphere. Rising temperatures worldwide are leading to melting glaciers, rising sea levels and stronger storms, according to scientific studies.
More than 190 nations gathered in Cancun this week are struggling to craft a treaty that would reduce carbon emissions; an agreement to reduce deforestation is also on the agenda. With the failure of the U.S. Congress to pass cap-and-trade legislation, some developing nations are looking to California for funds to help their forest-dwellers develop other sources of fuel and income.
Steven L. Kline, a vice president of PG&E Corp., the parent company of Pacific Gas & Electric Co. — one of California's largest emitters of greenhouse gases — told delegates in Cancun that the company hopes to use international offsets to help with "keeping customer costs low and demonstrably reducing global emissions."
Chiapas is counting on a "memorandum of understanding" it signed last month with Gov. Arnold Schwarzenegger. The Brazilian state of Acre also signed on to the agreement, which commits the three states to work toward developing rules that would allow international offsets to qualify for California's trading market.
"When we started to design our carbon market, we heard from businesses that they wanted to buy offsets — and please, no geographic boundaries," said Adams, who said she had insisted that a cap-and-trade program be part of California's 2006 climate legislation. "We want most offset [projects] to be in California, but a small portion outside the state."
But it remains to be seen how enthusiastically incoming Gov. Jerry Brown will embrace international carbon trading.
"We are nowhere near bringing in Chiapas into an offset program," state Air Resources Board spokesman Stanley Young cautioned. "There is a memorandum of understanding, but we need more discussions."
In the early stages of the California market, beginning in 2012, he said, only U.S. offsets will be included under rules that have been adopted to measure carbon savings from urban forestry, methane digesters on dairy farms and from the destruction of ozone-depleting industrial chemicals known as chlorofluorocarbons.
Before international forests are included, "There has to be rigorous verification and dependable accounting," Young said. "We've got to get the U.S. forestry protocol projects up and running."
Many forest experts caution that "sub-national" deals do not necessarily cut overall emissions because soybean farms, cattle ranches, palm plantations and other operations that destroy forests can move elsewhere. Only an international treaty that would cover deforestation on a global scale would make a significant difference, they say.
Chiapas, on Mexico's southwestern border, has 47 forest preserves covering more than 5,000 square miles, but swaths of rain forest, even within the preserves, are being cut down for subsistence farming by a growing population. It is one of the poorest regions in Latin America, which made it fertile ground for the Zapatista Army of National Liberation insurgency, which emerged from forest hideouts in 1994 but has largely faded from international view. Today, 32 municipalities remain affiliated with the group.