Isra-Mart srl:Japan jumps into battle for forest carbon credits

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KALIMANTAN, Indonesia–The forests here, threatened by years of logging and slash-and-burn agriculture, are becoming a battleground where countries race to pick up potential future carbon credits to meet pledged emission caps.

Throughout the dense woodlands of central Kalimantan on the island of Borneo, pillars of smoke can be seen rising. Charred trees mar the landscape, the result of uncontrolled fires from agricultural burning.

In recent years, representatives from international organizations and governments of close to 20 countries have visited Suwido Limin, a lecturer at the University of Palangka Raya in central Kalimantan, seeking advice on CO2 emission reductions. One notable visitor was billionaire investor George Soros.

Limin views the focus on Indonesia as overdue, driven more by the money that could be made from trading credits than genuine concern for the deforestation, one of the largest sources of CO2 emissions in the world.

One name is notably absent from the list of governments and organizations rushing to initiate Indonesian projects in exchange for lucrative carbon credits–Japan.

This is a major source of consternation for officials in Tokyo, as moves to create a workable system to reduce greenhouse gas emissions are likely to spawn business opportunities Japan cannot afford to miss.

A new framework under which nations gain carbon credits by helping protect forests in developing countries is currently being considered as a pillar of a post-Kyoto Protocol arrangement for curbing global warming from 2013 on.

Under the proposed initiative known as REDD-plus (Reducing Emissions from Deforestation and Forest Degradation and conserving forests in developing countries), credits can be used to fulfill emission reduction obligations, or can be traded for profit, creating a major incentive for industrialized countries.

According to a 2005 Indonesian government estimate, deforestation resulted in the emission of 1.7 billion tons of carbon dioxide, easily exceeding Japan’s total emissions for one year, making it a potentially major source of carbon credits.

At least 30 pilot projects launched by foreign governments and organizations are already under way, including programs to help provide residents with alternatives to illegal logging or building reservoirs that can be tapped to fight forest fires.

Among countries lining up for such programs are Germany, Australia and even South Korea, which has not made an emission-reduction pledge.

In May this year, Norway offered an aid package of $1 billion (about 83 billion yen) to Indonesia on condition that Jakarta take up forestation programs.

However, Japan appears to be out of the picture. While Foreign Minister Seiji Maehara, who co-chaired the 10th meeting of the Conference of the Parties to the Convention on Biological Diversity, declared in late October that Japan had “presented a direction for accelerating key global climate change countermeasures,” many people in the government say Tokyo has fallen behind in the race to pick up carbon credits.

Japan, which unfurled an ambitious target of slashing emissions by 25 percent from 1990 levels by 2020, would likely benefit most, as one senior Environment Ministry official noted, “Every credit will be needed to achieve the target.”

The REDD-plus initiative is viewed by some as one of the few achievements likely to come out of the 16th U.N. Climate Change Conference (COP16), which starts in Cancun, Mexico, on Nov. 29. Moves to incorporate the new initiative are active both in Japan and elsewhere.

Research shows that deforestation accounts for roughly 20 percent of all global greenhouse gas emissions.

Encouraged by the government, Japanese trading houses and general contractors are getting into the forest conservation businesses.

The Foreign Ministry has begun preparations to forge bilateral agreements with developing countries, including Indonesia, to secure credits.

Trading house Kanematsu Corp. launched a survey on CO2 absorption capacity in Brazil’s Amazon district in fall 2009. The firm hopes to form a partnership with indigenous tribes living in the rain forests. The forests are threatened by encroaching soybean fields, as the tribes fell trees to create farmland for lease.

Under the deal, the tribes would stop felling trees, Kanematsu would pay them more than double the cash they would get from leasing the land, and then sell credits representing the estimated 400,000 tons of carbon dioxide absorbed annually by the roughly 1 million hectares of woodland.