Forest Bump

Fewer jobs, dwindling savings, piles of public debt — there’s not much reason to be thankful for the global recession. But one small silver lining is that it has slowed the rate at which we’re turning the atmosphere into an over-amped electric blanket.

There are two things at work here: First, less growth slows the demand for energy. During a recession, people make less, drive less, and even turn off lights more to save a couple dollars on the utility bill. That’s the big factor behind greenhouse gas emissions in the United States having fallen 6 percent between 2008 and 2009, according to the Environmental Protection Agency.

The second reason environmentalists can feel good about a recession is that lower demand for everything — including wood and agricultural products — reduces the incentive to chop down trees. That relationship presents a challenge to tree-lovers: how to keep the chainsaws silent as the economy recovers? But it also suggests a solution — and financial incentives can play a big role.

Tropical forests are home to about half of all species on Earth. And all of those trees store up a lot of carbon — which escapes into the atmosphere when they are burned down. That’s why the rapid rate of forest clearing worldwide is a vital global issue. Indonesia, a major home to tropical forests, lost about one quarter of its forests to logging and slash-and-burn agriculture between 1990 and 2005 alone. And, historically, forest clearing has accounted for somewhere around 15 percent of the impact of greenhouse gasses on global climate change. So we should cheer recent news that the global rate of deforestation has slowed. At the same time, sustaining that decline is going to take some serious work.

A tool developed by my colleague David Wheeler at the Center for Global Development called FORMA (or Forest Monitoring for Action) allows close tracking and analysis of global deforestation trends. FORMA covers 27 countries that accounted for 94 percent of clearing in the first half of the last decade. Every month, the FORMA software examines NASA data all across the tropics, 1 square kilometer at a time, to look for fires and changes in vegetation color — telltale signs of loggers at work. Wheeler’s work suggests that, between December 2005 and August 2011, the rate of monthly tropical forest clearing dropped by 42 percent.

That change was largely thanks to a considerably slowed rate of clearing in Indonesia and Brazil, which between them account for over three quarters of tropical deforestation. At the same time, the data suggests that among the 27 countries covered by FORMA, clearing increased in 14 of them over the last six years. And even within Brazil the picture is mixed: slower deforestation in southern Amazonia, more rapid clearing to the north. Likewise in Indonesia, which has seen decreased clearing in the southern and central areas of Sumatra and Kalimantan, but more rapid deforestation elsewhere on the same islands. That suggests a complex story regarding what has caused the global decline in deforestation, and what it would take to sustain it.

Analysis of the FORMA data for Indonesia points to a range of factors that help to explain how much forest is cleared, and where and when. Rainfall makes it harder to burn trees, so wet seasons see slower clearing. The spread of cell phone coverage appears to have helped loggers work more efficiently — put up a cell tower and a logger may soon follow. Macroeconomic factors also play a role: Lower interest rates and a more favorable exchange rate — both of which increase returns to investing in palm oil (Indonesia is the world’s largest producer) and logging — increase the rate of clearance. Sadly, among the factors that appear to have no effect on rates of deforestation across Indonesia is the one that has been a focus of global efforts to slow clearing: putting land in protected-area status. Again, the strength of local government institutions plays a limited role.

In short, it appears that changes in deforestation over the last few years are likely to have been driven by short-run economic factors. And that may mean that when the global economic crisis ends, clearing rates will rise again — unless we find a better way to protect forests now.

But the importance of economic factors to clearing rates also suggests an obvious and effective response: pay people to keep forests intact. Thankfully, there is an ongoing international effort to create such a program. Negotiators in the last U.N. climate change conference in Durban hashed out a number of issues related to paying countries to preserve their forests under a scheme called Reducing Emissions from Deforestation and Forest Degradation — also known as REDD. But they are still a long way from a final agreement. It has been immensely difficult to agree on who would get the money, and against what benchmarks and targets. And at a time of limited appetite for new expenditure by governments in developed nations, it isn’t yet exactly clear who will pay the billions of dollars that donor countries as a group agreed to provide for REDD at the 2009 Copenhagen climate summit.

In the interim, the Norwegian government has started running REDD pilot programs — but these exercises have shown how complex it can be to link payments with results on the ground, especially when so many local factors are involved in slowing the rate of clearing. In May 2011, Norway agreed to pay Indonesia $1 billion if, among other things, it put in place a two-year moratorium on new concessions to cut down forests. The decree excluded existing concessions and those "approved in principal," so perhaps it shouldn’t come as a surprise that FORMA data suggested that June 2011 actually saw rates of clearing in Indonesia rising. The good news is that July and August of last year did see rates at their lowest levels since 2006, so perhaps there is a hope that however full of holes the agreement appears to be, it may still have some effect. But a previous Norwegian deal with Guyana appears to have done little to slow deforestation in the short term; and a $1 billion fund supported by Norway in 2008 to back Brazilian forest protection had only spent $39 million by the start of 2012.

Wheeler’s analysis does suggest one potentially more straightforward approach. Pay countries each month if they manage to keep deforestation at a rate below that which would be expected given long-term development trends. Wheeler and colleagues suggest that as countries get richer they also clear less forest — and that by the time a country’s per capita gross domestic product hits around $10,000, it is likely to see a zero rate of net deforestation. So, if a developing country manages to slow its rate of clearing, and deforest less than its average income would suggest in a given month or year, it gets paid. FORMA provides sufficient, and sufficiently accurate, data to make such a scheme workable — and Wheeler suggests a number of tweaks to make sure that the scheme encourages the long-term outcomes that we want.

Of course, given that the analysis of FORMA data suggests that protected area status and the quality of local government makes little difference to the rate of deforestation in Indonesia, one might wonder what good a scheme that gave money to apparently impotent governments would do. One answer is that the program would give countries a significant incentive to overcome that impotence — searching for whatever amounts to the institutional equivalent of Viagra for their forestry departments. In fact, more capable government would be a considerable side benefit of the scheme. Less pulp and more efficient paper-pushers — what’s not to like?