Costa Rica Pioneers Market-Based Conservation Strategies

by John Burnett

SAN JOSE, Costa Rica, Oct. 15, 1997 - In all the talk over what to do about greenhouse gases responsible for climate change, an idea is quietly gaining ground that could dramatically effect forest conservation in the developing world.

It's called joint implementation, and President Clinton gave it a plug when he spoke in Washington in October about global pollution reduction. "We propose an innovative joint implementation system," he said, "that allows a firm in one country to invest in a project that reduces emissions in another country and receive credit for those reductions at home."

More than any other country, Costa Rica has pioneered the use of joint implementation to help finance the conservation of its rainforests in projects like this one.

The scene: a logger chains massive sections of hardwoods onto a flatbed truck bound for the sawmill. Nearby, a serious-faced young man in jeans and a plaid shirt watches. His name is Herman Obando and he's a forestry engineer employed by a quasi-governmental agency in San Jose named Fundecor. Obando has come out in the sweltering heat to make sure the chainsaw does the least harm to a patch of lowland rainforest on the Atlantic coast.

"This is the most thorough forest management plan you will find anywhere," he says proudly.

When Obando is assigned to a forest targeted for timber cutting, he marks which trees cannot be cut, such as endangered species and father trees, whose seeds are needed for regeneration. He makes sure the targeted trees are not growing in watersheds, which would increase erosion if they were felled. He plans the skid trails so that when the fallen timber is dragged out it does the least amount of damage to other vegetation. And he instructs the loggers which way the trees should fall, so they won't hurt other trees and open up unnecessary clearings in the forest.

As Obando looks on, the logger - whose shirtless torso is covered with sawdust - slices through the base of a six-story-tall guacimo tree. Its soft white wood is favored sticks for matches and ice cream bars.

Some environmental purists might be alarmed that this forest is being selectively cut in the name of conservation.

"We're not romantic," says Ricardo Villalobos, a Fundecor official. "We believe in order to have a sustainable forest, the farmer must have an economic return to provide his family with food, clothes and shelter. If not, he'll find a way during the night, paying a bribe. We are in a real world where people require money to survive."

A few minutes later, the chainsawyer rests, and the gangly guacimo tree cracks and thunders to the ground. Bullseye! It misses the neighboring trees and prevents a gash in the forest canopy.

Successful conservation programs like Fundecor's are expensive. And a cash-poor, forest-rich country like Costa Rica can ill afford them. This nation is so hobbled by national debt that it can barely take care of its huge national park system.

Costa Rica has turned to joint implimentation - known as JI to insiders - to help save its forests. Here's how it works.

Say you're an electric utility whose coal-burning generators spew pollution into the air. For a price, Costa Rica will help soothe your corporate conscience. You can invest in wind farms and hydroelectric plants, which avoid further pollution, or you can help the country preserve forestland to offset pollution.

In other words, Costa Rica will sell you not the forest, but the air-cleansing properties of its forests, since we know that green plants absorb carbon dioxide during photosynthesis.

"If someone comes to me and tells me that we should protect this forest because they are priceless. I'm going to tell you they are not priceless. We have tried to make them have a price," says Franz Tattenbach, coordinator of the Costa Rican office on JI.

Costa Rica has invented the newest twist on joint implementation.

Earlier this year, it sold Norway two million dollars worth of something called Certifiable Tradable Offsets, which are tradable pollution certificates. The certificates are measured in tons of CO2 absorbed by a given quantity of forest. An investment banking firm in Chicago, Center Financial Products, is even selling these CO2 certificates to the public as commodities, just as they sell pork bellies.

Though the traffic in carbon certificates has been slow, JI booster Franz Tattenbach predicts that Costa Rica is creating "the first global environmental commodity of the world."

"This is what is so exciting about what we're doing," he says. "We might be creating the economic system of the 21st century."

While it's too early to predict Costa Rica's place in economic history, this country has done more with joint implementation than anyone else. This nation has nine projects worth some $140 million.

"Costa Rica has really run with it," says Peter Frumhoff, director of global resources for the Union of Concerned Scientists in Cambridge, Massachusetts. "They're seeking new investments all the timeAnd it's beginning to spill over to other countries as well. Mexico, Bolivia, Guatemala and other countries have also begun to see this as source of investment."

Despite Costa Rica's early successes with JI, it remains a complicated idea, with many doubters.

Skeptics wonder if something as elusive as carbon dioxide can be accurately measured. Some developing countries don't like the idea of rich polluters turning to poorer, forested countries to solve their greenhouse gas problems. And some U.S. environmentalists worry that joint implementation will encourage polluters to shirk their responsibilities to reduce their CO2 emissions at home.

Yet Costa Rica plows ahead. It is counting on JI to solve its most pressing environmental problems, from buying private inholdings in the park system to paying landowners not to cut their forests.

Costa Rican conservationists generally support JI in theory and practice, given that it's a financially painless way to subsidize the country's environmental goals. But some of its advocates nonetheless question the wisdom of relying so heavily on international donors.

"We cannot continue depending on this foreign aid. We have to do the things by ourselves," says Julio Calvo, director of the Tropical Science Center in San Jose."

But does Costa Rica, with all its financial problems, have any other choice?

"The challenge is that there are not that many tools in our tool kit," says Frumhoff. "We have pretty few. What makes JI attractive is it's a large source of new capital to pay for forest conservation. Is there a risk of failure? Absolutely."

The global warming convention in Kyoto, Japan, this month could dramatically effect the future of joint implementation - and, by extension, the rainforests of Costa Rica. Some 150 nations will discuss setting the first mandatory caps for greenhouse gas emissions for the industrial world.

Currently, all JI investments are voluntary; the payback is mainly in goodwill and good PR. If the convention adopts an international treaty setting strict reductions on globe-warming gases, the big question is: will polluters get credit for investing in JI projects thousands of miles away?

If that happens, it could create a huge market for the carbon-capturing benefits of tropical forests. Most observers, however, expect the conference to postpone any action on joint implementation until the year 2000.

That could be too late for Costa Rica. For this reason, the country is racing ahead with this and any other idea that could help save its fast-disappearing private forests.


Copyright 1998 John Burnett

This article or any portion of the article that appears on UT-LANIC may be downloaded, quoted or referenced with the stipulation that it be credited to John Burnett, correspondent for National Public Radio.

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