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The Eliasch Review: decent analysis, shame about the conclusions

Gordon Brown, the UK Prime Minister, will today launch the long-awaited report of his Special Representative on Forests and Renewable Energy, on how to save the world’s forests and prevent climate change.

REDD-Monitor has learned that the report by businessman Johan Eliasch will call for tens of billions of dollars to be invested in avoiding deforestation, and that this can best be achieved by private investors and the carbon markets. The report will claim that trading in forest carbon could cut deforestation by 75% by 2030. The report points out that deforestation alone will account for an extra 40 parts per million of carbon dioxide to be added to the atmosphere by 2100, and will push total levels of CO2 above dangerous levels.

Eliasch will advise that clarifying and securing land tenure and user rights will be essential in efforts to protect rainforests, and that only when property rights are secure will longer term investments in sustainable forest management be possible. The report will note that forest finance mechanisms without clarity of rights will have a high risk of negative impacts on the poor, and that there are dangers of abuse of customary land rights. Eliasch will point out that several billions of dollars of investment will be required from rich countries over the coming few years in order for forested countries to improve their governance of the forest sector

Another recommendation that will be welcome by many environmental and rights activists is that countries that wish to access international finance for forestry should be required to comply with basic international standards on human rights, labour rights and environmental protection, such as the Universal Declaration on Human Rights, and the ILO Declaration on Fundamental Principles and Rights at Work, and the Convention on Biological Diversity.

However, Eliasch’s recommendation to bring forests into the carbon markets will alarm many. His report will suggest that funding for pollution abatement in industrialised countries could be redirected towards efforts to cut deforestation, and that this will reduce the overall cost of pollution reduction worldwide. The report will make the controversial claim that forests could be brought within the European Emissions Trading Scheme without depressing the price of carbon, as long as only 30% of emission reduction efforts are made within Europe. Numerous studies have shown that there are high risks of the carbon price crashing if too many forest credits are brought into the market too quickly, thus undermining efforts to fund cleaner energy supplies and cut pollution.

Some observers are already describing forest carbon credits as ‘sub-prime’, with a high risk of ‘default’ as unreliable tropical governments fail to ensure their protection. The warming effects of climate change are likely to accelerate the loss of forests to fire in decades to come, so investments in forest carbon could eventually literally go up in smoke. Eliasch’s emphasis on forest carbon trading is likely to be particularly unwelcome by Brazil, which is opposed to the idea, and is anyway wary of Eliasch because of his association with a logging company that has been charged with persistent illegalities.

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  1. The Eliasch Review does not indicate which countries contribute most of the 20% CO2 emissions which it claims are attributable to “deforestation” (a misnomer which is being used for tactical purposes as a euphemism for commercial land conversion).

    If a handful of countries (primarily Indonesia and Brazil) account for the great majority of this, then why are so many politicians and consultants not devising mitigation strategies which will oblige those few countries greatly to reduce their emissions? (For example, importing countries could imposed taxes on direct and indirect imports of palm oil, beef, soya etc from those countries at such a level as would fully compensate not only for the CO2 emissions but also for the loss of forest which are implicit in those product’s production.)

    The Eliasch Review also does not even bother to clarify what proportion of this 20% derived from conversion of forest to plantations for agri-business, the paper and the timber industry. Perhaps because the majority is?

    Are the blind leading the blind?

    Doctors are unlikely to dispense costly and probably unsuitable medicine to the wrong diseased patient if they have to pay for the treatment themselves. However, it is not the politicians’ and consultants’ money that Eliasch urges be spent.

    One is reminded of the US$5bi + US$10bi of revenue which the World Bank claims is lost from illegal logging. However, the World Bank has never bothered to indicate in which countries most of these losses take place. Further, commentators have conveniently ignored the World Bank’s forestry strategy (published in 2004) – which is to ensure that those losses are reduced by half (within five or ten years from the launch of that strategy).

    One is also reminded of the so-called financial crises of recent weeks. Auditors did not (/were not paid to) report that they were unable to value their client companies, and this tended to endorse the performance of executives who devised strategies on the basis of quasi-fictional business statistics.

    The words irresponsible and negligent come to mind.