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.
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.
In addition, the report excluded the cost of planting new trees to replace the shortfall in timber supply.
"It's an enormous, industrial-scale undertaking, trees take time to grow and planting trees and maintaining them is expensive," added Bettelheim, estimating the total cost to halve deforestation rates at $50-100 billion.
The Eliasch report skirted the problem of corruption and illegal logging, said Simon Counsell, executive director at the green group the Rainforest Foundation.
The report recommended that rich country donors spend $4 billion over five years for research, to fund local bodies, and resolve local land disputes.
"It really fails to appreciate just how serious and long-term these problems of corruption and governance actually are," said Counsell, adding they would take 10 years to address.
"In DRC (Democratic Republic of Congo) there's fewer than 10 people in the forestry department managing an area of forest twice the size of France. That's the reality on the ground."