Deep in the flooded jungles of southern Borneo, muddy peat oozes underfoot like jello, threatening to consume anyone who tries to walk even a few yards into the thick, steaming forest.
Hard to imagine this brown, gooey stuff could become a new global currency worth billions a year, much less an important tool in the fight against climate change.
Yet this is a new frontier for business, says Bali-based consultant Rezal Kusumaatmadja, and a new way to pay for conservation efforts in a world facing ever more pressure on the land to grow food and extract timber, coal and other resources.
He and his fellow Indonesian business partner Dharsono Hartono are trying to preserve and replant a peat swamp forest three times the size of Singapore in Central Kalimantan province in Indonesia’s part of Borneo. And in the process, draw in local communities by boosting livelihoods and curb encroachment
They are at the vanguard of a global effort to slow climate change by trying to create a new market that puts a value on preserving forests, or avoiding deforestation.
The effort brings together a diverse cast of characters: environmental entrepreneurs such as Kusumaatmadja and Hartono; investment bankers trying to create a carbon market; companies seeking to buy carbon credits in that market; activists trying to ensure some of that money flows to rainforest communities; and bureaucrats whose task will be to somehow monitor and enforce the ambitious scheme, and not divert the proceeds into their pockets. Rainforest preservation has become central to U.N. talks on a tougher climate pact and is a focus of a major climate conference in Cancun, Mexico, that began on Nov. 29.
The key is carbon. Forests, and particularly deep peat forests in the tropics, soak up and lock away lots of carbon dioxide, the main greenhouse gas, acting like giant filters for the atmosphere. Cut down the forests and drain the peat, and they can release even more. Deforestation and burning account for more than half Indonesia’s greenhouse gas emissions, making it leading carbon polluter.
How, then, to put a price on that carbon and trade it?
That’s the puzzle and the lure for many investors who want to capture the benefits forests bring, from locking away carbon, to being watersheds for rivers and storehouses of countless species.
“You can’t solve the climate change issue unless you simultaneously tackle deforestation,” said Abyd Karmali, global head of carbon markets for Bank of America Merrill Lynch. That means preserving what’s left and driving investment in rainforests in Brazil, Democratic Republic of Congo and Indonesia, which have the three largest areas of remaining tropical forests.
But the plan pits powerful business interests in the palm oil, logging and mining sectors against public and private sector efforts to support greater forest protection and potential carbon credit payment systems. It also means reforming powerful bureaucracies and weeding out entrenched corruption, strengthening land ownership and land use rules, improving monitoring and law enforcement and enshrining the rights of local forest communities.
PEAT PRESERVATION
In some countries, including Indonesia, the reform process is under way, and daunting though the challenges may be, rich nations such as Norway have already pledged in total about $4-billion (U.S.) for pilot programmes to drive such reforms.
Studies such as the 2006 Stern Review, and investors such as George Soros, say saving forests is a cheap way to buy mankind a little more time in the switch to less polluting economies.
The scale of the challenge -- and the potential benefits -- is vast.
