Rich countries must pay for rainforests: UK report

By Gerard Wynn

LONDON (Reuters) - Rich countries should pay tropical nations billions of dollars a year to save their forests, using donor money and global carbon markets to foot the bill, said a UK-commissioned report on Tuesday.

In the longer-term, by 2030, developing countries should also start paying to help create "carbon neutral" global forests through binding targets to slow deforestation and plant trees.

Clearing and burning forests for timber and farms creates about a fifth of the greenhouse gases blamed for climate change, but growing urgency to tackle the problem is dividing opinion on how to fight the problem.

Tuesday's report drew criticism from some carbon traders and green groups, saying it down-played costs and skirted real world issues of corruption and land disputes.

The report, "Climate Change: Financing Global Forests," firmly pinned hopes on the notion of carbon trading, where rich countries pay poor ones to cut carbon emissions, so that they can carry on polluting as normal.

"Deforestation will continue as long as cutting down and burning trees is more economic than preserving them," said Johan Eliasch, author of the report and Prime Minister Gordon Brown's special representative on deforestation.

The report estimated that finance from carbon markets could curb deforestation rates by 75 percent by 2030, and urged inclusion of forests in a new global climate pact slated for agreement under U.N.-led talks by the end of next year.

But carbon markets would still leave a funding gap of $11-19 billion by 2020, said the report, to be met by donors currently struggling against a worldwide banking crisis.

Extra pressures now on tropical forests include clearances to plant vegetable oils for biodiesel, and more cattle ranches to satisfy a richer world's increasingly meat-hungry diet.

Carbon markets use a carrot approach, allowing developing countries to earn carbon offsets for chopping fewer trees than in the past, and then selling these offsets to rich countries as a cheaper option to domestic greenhouse gas emissions curbs.

COSTLY

Some critics said that the report's cost estimate of $33 billion a year to halve deforestation by 2030 was too small.

Offsets would have to compensate farmers for not planting valuable crops such as palm oil.

That implied high prices, which made one expert doubt the report's claim that forestry offsets could halve costs for rich nations to fight climate change.

"Over the next decade, forest carbon credits could conceivably cut mitigation costs by 13 percent," said Eric Bettelheim, chairman of a private company Sustainable Forestry Management, citing an estimate by Environmental Defense.