A price of $10 per ton of planet-warming carbon dioxide could be incentive enough to halt greenhouse gas emissions from many land uses in Brazil and Indonesia, a leading conservation group said on Tuesday. Logging for timber or cutting down CO2-absorbing forests to plant oil palms, soyoil estates or for cattle ranching are among the main causes of deforestation. A UN-backed scheme called reducing emissions from deforestation and degradation (REDD) aims to put a price on the carbon that tropical forests soak up and lock away and on the CO2 emissions released if trees are cut down. Indonesia and Brazil have lost vast amounts of carbon-rich tropical forests as demand for land to grow food increases. Saving forests is a key focus of Dec 7-18 UN talks in Copenhagen trying to agree on the outlines of a tougher pact to curb greenhouse gas emissions. REDD schemes could be a cost-effective way to curb emissions from deforestation caused by many land uses with estimated costs for investors between $2 and $10 per ton of CO2, the International Union for Conservation of Nature said in a report released in Copenhagen on Tuesday. The idea is to figure out how much to compensate landowners and governments for not cutting down remaining forests and involves looking at the type of forest land, competing land uses, estimates of carbon content density, among others. Opportunity costs of forest conservation are defined by the net income per hectare per year that is sacrificed by not logging or not converting the land to agriculture, the report, funded by global miner Rio Tinto, said. “Roughly 75 percent of Brazil's total greenhouse gas emissions are from deforestation in the Amazon, and represent 8-14 percent of global emissions from land use change,” says the report, which focuses on the actual costs to investors looking to put money into REDD carbon abatement projects. It says the opportunity costs for cattle ranching in Brazil ranges from zero to $2 a ton for small-scale operations and notes that about 80 percent of recently deforested land was used for ranching. Against soybean production, the opportunity costs were $2.5 to $3.5 a ton. Under REDD, developing countries would be rewarded by earning money from selling carbon offsets derived from projects that save forests from being cleared or from forest replanting. In Indonesia, where about 85 percent of emissions come from deforestation, degradation and fires, the highest opportunity costs of REDD occurred where forest conservation competed with palm oil. “Opportunity costs range from 49 cents per ton of CO2 for small-holder farming in Sumatra up to $19.6 a ton for conversion of degraded forest land to palm oil. Unsustainable logging was the next most profitable land use in Indonesia, ranging from $1.65 a ton for commercial logging in Sumatra to $3.44 a ton for logging in Southeast Asia and the Pacific. The report estimates transaction costs of setting up REDD projects at $1 a ton of CO2. It finds that REDD is competitive for many land uses in Brazil at a carbon price of less than $5 a ton. For Indonesia, the same was true at $10 a ton. Oil prices were narrowly mixed on Tuesday amid concerns over large stockpiles in the United States caused by weak demand in the world's biggest consumer, traders said. Brent North Sea crude for delivery in January dipped 12 cents to $71.77 a barrel in midday London trading. New York's main contract, light sweet crude for January, edged up four cents to $69.55.
