An Appeal for Carbon Ranching

Two of the major factors in climate change are the emission of greenhouse gases, like carbon dioxide, and deforestation in the tropics. The latter is a major concern because tropical forests help absorb carbon dioxide, release their own carbon when burned, and provide important habitat for many bird species. Two authors of an op-ed in today's New York Times argue in favor of a forest preservation program that they call carbon ranching.

Reversing tropical deforestation could be surprisingly cheap and easy because it can be driven by simple economics. Right now, it’s worth more to a logging company or a peasant to convert the rainforest to stumps or soybeans than it is to leave that rainforest intact. One hectare (about 2.5 acres) of forest cleared and converted to ranchland or crops produces a piece of land worth, on average, $200 to $500. But that’s nothing compared to the value of preserving the rainforest as a sponge for carbon dioxide.

On European markets, the right to emit one ton of carbon dioxide trades today at more than $20. With each hectare of intact rainforest storing around 500 tons of carbon dioxide, that means that each hectare has a value of $10,000 as carbon dioxide storage, far more than the value of even the most productive tea or soy plantation.

As a recent World Bank report put it, “Farmers are destroying a $10,000 asset to create one worth $200.” To the farmer or agribusiness corporation, of course, that makes perfect sense, because that $10,000 is all theoretical. It can’t put food on the table or deliver dividends to shareholders.

Carbon offsets have limitations, of course. There is a limit to the amount of carbon that a tree can hold, and forest preservation would be a way of holding steady rather than true reduction of emissions or warming rates. For a program like this to work, it would need to be part of an overall frame work that would include cutting greenhouse gas emissions. Still, it is an interesting proposal, and one that could have positive effects regardless its contribution to slowing climate change.