The Backstory Behind the REDD Preservation Scheme

Don Melnick's moment of epiphany came after he saw the elephant. In Sri Lanka in 1986 to study toque macaques, a species of Old World monkey, the Columbia University geneticist was en route from the old capital city of Kandy to a research site upcountry when he suddenly saw the pachyderm tearing branches off trees where the roadside met the edge of a forest. He pulled his jeep over and watched, transfixed, until the elephant slowly backed away and vanished into the woods. When Melnick returned to the same spot on his next trip two months later, he was hoping for another glimpse of the elephant. But to his shock, the forest was gone—all of it, burned to the ground, leaving only charred trunks and ashes as far as the eye could see. And that, says Melnick, was when it hit him. "I can't just study these wild animals as if they were fruit flies in the lab," he says. "Preservation of forests has to be a big part of what I do."

Fast-forward to 2009. At the Copenhagen climate negotiations, hopes for a binding treaty with targets and timetables to reduce greenhouse-gas emissions have been scaled way back. Now, if countries simply make promises to reduce emissions below what they would otherwise be—never mind reducing them in real terms—the meeting will be considered a success. But one significant decision might be reached: an agreement in principle to include preservation of forests in the global greenhouse accounting, basically by allowing industrial polluters to pay owners to keep rainforests intact. The plan is known as REDD, or Reducing Emissions from Deforestation and Degradation. If it happens, Melnick will be one of the people who will translate it from paper promise into reality. "One day," he says, "I want to tell my grandchildren that I did everything I could, using every skill I had, to avert environmental disaster."

Most people think of smokestacks, not forests, as the place to begin combating greenhouse-gas emissions. But tropical forests tie up huge amounts of carbon—100 tons per acre, on average. When rainforests are cut for farming or logging, as happens to 30 million acres every year, that carbon ends up in the atmosphere. As a result, more carbon is emitted through deforestation—anywhere from 12 to 20 percent of global emissions, according to varying estimates—than by all the world's cars, trains, trucks, boats, and buses combined. That means saving forests could have a huge impact on climate, and the 1997 Kyoto Protocol indeed gave countries credit for preserving these living carbon sinks within their own borders or in other countries.

But the provision was removed in 2001 at the insistence of European environmentalists, who thought it let industrial polluters off the hook by allowing them to avoid "real action through dodgy accounting instead of taking bold action to tackle the climate crisis," as Friends of the Earth, which opposes carbon trading for trees, charged in a recent statement. Melnick has little patience with such objections. "If your goal is to inflict pain on industrialists, it makes sense [to oppose REDD]," he says. "If your goal is to reduce emissions, it makes no sense."

Melnick found the perfect forum for making these arguments when he was appointed co-chair of the U.N. Millennium Task Force on Environmental Sustainability in 2002. As part of that effort, he addressed a high-level session of the U.N. Forum on Forests three years later. "I wanted to shock people," he says. He succeeded. He had calculated the number of deaths that year due to deforestation and other forms of environmental degradation. It came to 1 million a month—or a toll equal to that of the 2004 Indian Ocean tsunami every week. "If we fail to act," he told the delegates, "we will become the willing executioners of the millions whose lives are lost every year as a result of the degradation of nature." Melnick pressed on with his plea to preserve clean water, clean air, healthy ecosystems, and forests, concluding with a cursory description of the proposed carbon-trading scheme for preventing deforestation.

When Melnick finished, delegates rushed up to him. The environment minister of Costa Rica wanted to learn more; others asked him to speak with their ambassadors. "In five minutes, I got more reaction than to anything else I'd done in all my professional life," Melnick recalls. REDD was still no more than an idea, but it was starting to attract greater interest.

In 2007, discussions about a treaty to replace the Kyoto pact got underway in earnest. The atmosphere was very different from six years before, when the forestry provision was stripped from the climate treaty. In 2001, there were serious doubts that a scheme in which polluters would pay to preserve forests would work. Could you accurately calculate the amount of carbon in a forest, and thus know how much pollution you were avoiding or offsetting? Could you monitor agreements so that someone who had been paid to preserve a forest didn't cheat? In 2001, both answers were no, which is part of the reason why environmental groups hated REDD so much. But by 2007, remote sensing had improved dramatically, as had algorithms for calculating the amount of carbon in a forest. "The criticism that you couldn't do this with any degree of certainty was no longer valid," says Melnick, who by then had joined the Coalition for Rainforest Nations, an international lobbying group for several dozen tropical countries, as its chair of science and technology.

That October, Melnick was invited by Pedro Leitão, head of the Brazilian environmental organization Funbio, to speak to 200 government officials, bankers, academics, and industrialists in São Paolo, Brazil, describing REDD and the climate threat posed by deforestation. "I explained that Brazil and Indonesia [with their high levels of deforestation] are the third- and fourth-largest emitters of CO2, right after China and the United States," he recalls. "That surprised people, who assume that the top emitters are all industrialized countries." He laid out scenarios of how REDD might operate, citing estimates that about $15 billion to $20 billion (paid to forest owners by companies that have to reduce their greenhouse-gas emissions) would cut deforestation in half. Until that point, says Melnick, "the message had been, 'Don't clear the forest—and, by the way, we won't pay you to preserve it.' " That had to change. "Only through a market mechanism" in which forest holders sell carbon offsets in exchange for preserving their forests, he said, "will you reliably get enough money to significantly reduce deforestation."

The heads of the environmental trust funds of several South American countries were in the audience. ETFs manage and invest donations from international organizations like the World Bank, private foundations, and government agencies like USAID to support conservation programs. And they enlist local NGOs to design and fund those programs. The ETF reps immediately saw the potential of turning REDD into reality, but the first inkling that something concrete might develop out of that interest came in April 2008, when José Luis Gómez Rodriguez, head of the Colombian Fund for Environmental Action, visited Melnick in New York. The two met for breakfast at the Deluxe Diner near Columbia University, settling into a booth with burgundy-colored leatherette benches. As they talked, it became clear that the ETFs were the perfect partners to help carry out this work. Melnick and Gómez decided to begin with the ETFs in the Amazon basin—Brazil, Peru, Colombia, Ecuador, and Bolivia—and build from there. "It started to become real, not just an exchange of ideas," Melnick says. "We came roaring out of the diner."

When Gómez contacted the other ETF heads, Melnick went on to enlist experts on everything from remote sensing to international law, all working pro bono. After months of "virtual meetings" via Skype, Melnick's team and the ETF heads agreed in June 2008—at a meeting in São Paolo—on the outlines of how they would work together to implement REDD in the Amazon. They would call their collaboration the Amazon Forest Carbon Partnership. It would pursue a threefold mission: to develop ways to reliably create forest-carbon credits, train teams to verify and monitor those credits, and establish an institution to bring those credits to market. But all this would require money. Where would it come from?

Melnick began a lengthy dialogue with executives at Cargill, the privately held agricultural giant. Given its major interest in soybeans and food production—exactly the type of operations for which rainforest in the Amazon gets clear-cut—Cargill might seem an unlikely partner. But in 2006, the corporation had made a commitment not to purchase soy from any deforested lands in the Amazon and had joined with environmental groups to help prevent further deforestation there. Cargill is also interested in trading commodities—and carbon could be a huge one. In September 2009, the corporation made its commitment official. Having Cargill as the principal financial supporter "has taken this from an academic exercise to something much more concrete," says Melnick. And though he won't say how much money Cargill has committed, it's clearly in the millions. "From our perspective, the most important thing was to identify a partner that we believe has the capability to conduct such a project," says Michael Dwyer, Cargill's general manager for carbon issues.

The Amazon Forest Carbon Partnership's goal is not to establish carbon markets per se. (Those will be established by governments through their own national legislation and international agreements.) Instead, the partnership's aim is to help forest holders in the Amazon be ready when developed nations come seeking carbon credits to purchase, "so anyone who buys a credit is buying a real emission reduction rather than just a piece of paper," says Melnick. That's a serious concern, since many of the carbon offsets that industrialized countries bought under the Kyoto pact turned out to be fraudulent, or caused far fewer CO2 reductions than promised. If people are to believe in REDD, says Melnick, its carbon credits have to be as real and verifiable as pork bellies or a share of stock.

There are formidable obstacles. That's why the first of the partnership's goals is to create a standard for measuring carbon credits from avoided deforestation. The group plans to do that through remote sensing paired with "ground truthing"—sampling trees in a tract of forest to assess their carbon content. Satellite monitoring will make sure the forest is not being cut while owners are being paid to preserve it.

Melnick doesn't think the incentives to cheat will be high. "Forest owners can still build a house on the land or run ecotourism or harvest fruit and nuts from the trees," he says. "They just can't clear-cut the land to raise cattle or sugar cane or soybeans." Compared with soybeans and beef, the price of carbon—currently $20.50 a ton—is competitive. That makes an acre of rainforest at current prices worth $7,500 over the 50-year life of a REDD contract—or $150 a year—compared with $100 to $200 for cropland. "I've often told people that they will become carbon farmers," Melnick says. "Instead of raising cattle or soybeans, their job will be making sure their carbon crop is healthy." A registry for carbon credits will certify the credits and also guard against their being sold twice. "You won't just buy credits on the street corner," Melnick says. The ETFs will help forest holders meet the regulatory requirements for listing their credits, from certifying ownership of the land to showing how they estimated its carbon content.

Critics charge that REDD alone cannot prevent the nearly 20 percent of global emissions that come from deforestation. Melnick agrees. "But if economic incentives can reduce deforestation by a third, that would be 5 to 6 percent of carbon emissions," he says. "If we could eliminate half, that would be 9 percent. That would put us in the gigaton range." And that would be a worthy legacy for any climate conference.