Everyone is talking about the urgent need for climate action and it seems like the Obama administration and Congress are moving towards a “cap and trade” system to limit US greenhouse gas emissions.  However, there is a big devil in the details that could make the whole system useless.

The basic idea behind a cap and trade system is to set a limit, or "cap," on overall greenhouse gas pollution, then sell “allowances” to polluting industries.  The allowances can be traded to provide flexibility, but they never add up to more pollution than the cap.  Over time, the cap is lowered to reduce greenhouse gas pollution – as the supply of allowances gets smaller, the price to pollute gets more expensive.  Basic supply and demand.  This sets up financial incentives to switch from polluting activities to clean and renewable technologies.

In theory, pretty simple, right?

Well, it gets more complicated when big polluters and special interests find ways to mess it all up…and when their friends in Congress start listening to them.

One of the biggest threats to the effectiveness of a cap and trade system is the inclusion of cheap carbon “credits” generated from, strangely enough, the protection of forests overseas.

Why?  Well, first of all, deforestation is responsible for more greenhouse gas pollution than all the cars, trucks, planes, trains and boats in the world -- combined!

Second, protecting forests is a much cheaper way to keep greenhouse gas pollution out of the atmosphere than, say, building fleets of electric cars.  After all, we don’t really have to build anything new to keep forests standing – we just need to refrain from burning them up or chopping them down!

The fact that forest protection is a relatively efficient way to take action for the climate is a good thing.  And Greenpeace thinks the US and other countries should make investments in tropical forest protection for our climate.  You can read more about our plan to do that here.

But if you mix low-cost forest credits into a trading system and make it cheaper to pollute…well, you make it cheaper to pollute!

And if it’s cheap to pollute, polluters – from coal companies to car companies – will continue to do so instead of investing in new ways of doing things and building the greener, healthier economy we so desperately need.

Plus, scientists are clearly telling us that to tackle global warming, we can’t pick and choose between saving forests and continuing polluting business as usual.  It’s not either / or.  The science shows it has to be BOTH to avoid catastrophic climate change.

A new economic report, commissioned by Greenpeace and released recently at the United Nations climate talks in Bonn, Germany, shows why.  Among other things, it documents that including “avoided deforestation” credits in international carbon markets could:

1. decrease the cost of carbon between 60%-75% under various scenarios
2. increase the overall cost of fighting global warming in the long term
3. reduce clean technologies investments in developed nations (like the US) & developing countries (like China)

I recommend reading the Greenpeace report summary here.  If you want to dive into the wonky details, download the full, technical report, here.

Stay tuned – as politicians continue to develop plans to fight global warming, we’ll need your help to make sure they protect tropical forests overseas AND invest in clean technologies here in the US.

For the forests (and the climate),

-Rolf