Why Brazil is interested in “forests in exhaustion”

During the climate negotiations in Poznan, Brazil pushed for “forests in exhaustion” to be included under the Clean Development Mechanism. Currently, any plantation established on land that was forested after 1 January 1990 is excluded from the CDM.

Brazil hopes to overturn this ruling by arguing that severely degraded logged-over forests store little carbon and that the only way of storing more carbon on the land is by planting trees.

Although this is a CDM issue and not strictly anything to do with REDD, it could have important consequences for REDD particularly relating to forest degradation. “Forests in exhaustion” are forests that have been so destructively logged that they will not regenerate naturally. Brazil’s proposal would provide an incentive to clearcut forests. Companies could profit from the timber sale and subsequently benefit from establishing industrial tree plantations on the land, subsidised with carbon credits through the CDM.

Since the discussions about “forests in exhaustion” in Poznan, the Afforestation/Reforestation Working Group of the CDM has drawn up Terms of Reference for two consultative expert bodies (CEBs) to “assess the implications of the possible inclusion of lands with forests in exhaustion (FE) as afforestation and reforestation as clean development mechanism project activities (CDM)”. The expert bodies are to start their work in April 2009 and the results will be presented in December 2009 at COP-15 in Copenhagen.

The first task of the expert bodies will be to define the term “forests in exhaustion”. The Afforestation/Reforestation Working Group of the CDM has made two suggestions:

Option 1:
[The CEBs shall take into account that lands with forests in exhaustion possess inter alia the following features:

• Baseline scenario which shall exclude conversion to a non-forest land;

• The current state of them follows multiple cycles of harvesting;

• The carbon stocks in them are expected to be in decline unless planting, seeding and/or the human-induced promotion of natural seed sources is applied.]

Option 2:
[For the purpose of these terms of reference (TOR), “forests in exhaustion” are those forests which would require significant anthropogenic effort in order to reverse to the pre-exhaustion forested state, and the most plausible scenario will be the continuation of the current state.]

This is not the first attempt at removing the CDM’s cut off date for converting forests to plantations. In 2007, several countries suggested removing subparagraph 1(b) iii (from Annex 18 EB26), which reads as follows:

“The land has not been forest land at any time since 1 January 1990, that is, there is no time since 1 January 1990 at which woody vegetation on the land has met the thresholds adopted for the definition of forest by the host country.”

In a June 2007 comment about this proposal to the CDM Executive Board, Greenpeace summed up the problem:

[N]othing in the current proposal would prevent the clearing of the secondary forest that had developed since 31 December 1989 to establish a monoculture tree plantation that is credited under the CDM. In addition to risking negative social and environmental impacts and providing a subsidy to the plantations industry, allowing for such practise would also not result in emission reductions, since in the absence of the project the secondary forest would have continued to exist.

At the CDM Executive Board’s 35th meeting in October 2007, the Board agreed on eligibility procedures for afforestation/reforestation (i.e. industrial tree plantations) which excluded the possibility of converting land that was forested since 1 January 1990.

The Clean Development Mechanism is already fundamentally flawed. CDM projects do not result in emission reductions, because they create carbon credits which allow pollution to continue elsewhere. The CDM has provided massive subsidies to industry, especially in the case of factories in India and China which are manufacturing HCFC refrigerant gas, a powerful greenhouse gas. These factories have managed to sell about US$4.7 billion worth of carbon credits under the CDM for abating emissions of HFC-23 (trifluoromethane), also a powerful greenhouse gas. The cleanup cost the companies involved something like US$100 million. This fiasco created a perverse incentive to continue manufacturing HCFCs rather than switching to alternatives that are less dangerous for the climate.

Similarly, Brazil’s “forests in exhaustion” CDM proposal would be a disaster for forests and for the climate. It would create incentives to log forests destructively so that they would never recover. It would create the problem of proving that the logged over forests could not recover. Due to the failure of the UN to differentiate between forests and plantations, every time the plantations are clearcut, they become “forests in exhaustion”, meaning that the post-harvest replanting of plantations would be eligible under the CDM. Brazil’s proposal would not benefit the climate, but it would provide massive subsidies for monoculture tree plantations.

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(I heard the term “forests in exhaustion” for the first time during the Poznan negotiations and in a previous post I misunderstood what it was about. In my defence, I am not the only one that had not heard of “forests in exhaustion”. In March 2009, I asked one of the Brazilian government’s forest negotiators for an on-the-record explanation of “forests in exhaustion”. The reply, in full, was: “To be honest… I’ve never heard this term ‘Forest in Exhaustion’.”)