Money doesn't grow on trees

Today's report from Johan Eliasch on the measures needed to save the tropical rainforests demonstrates how we have reached an important watershed in a key environmental debate that has raged on for more than two decades.

I came to this issue in 1990, when I took on the role of running Friends of the Earth's tropical rainforest campaign. Back then the focus was on development projects such as dams and roads, the international commerce in tropical hardwoods and the land rights of indigenous people. Some famous victories were won, but the destruction was not halted. Since the early 1990s the rate of deforestation has gone up and down in intensity, but inexorably it has continued. All of the questions that were important in 1990 remain so now, only the issue has got a whole lot bigger and more important since then.

Today deforestation is increasingly driven by international commodity markets in products including beef, soya and palm oil. And no longer is the concern solely about wildlife and local people. Vital though these questions remain, they are now joined by the global challenges of climate change and the supply of vital ecosystem services, including a critical role in the global freshwater cycle.

The rainforests hold tight tens of billions of tonnes of carbon in vegetation and soils, and continue to take carbon dioxide out of the atmosphere even when the have reached the stage of old and mature ecosystems. As they breathe they pump out some 20bn tonnes of water into the atmosphere every day. A lot of this falls back on the forests (hence the name) but a great deal of it travels, to water crops as far away as southern Europe and North America.

These carbon and water services are of global importance and need a global financial mechanism to pay for them. Most rainforest nations are developing countries with high levels of poverty. In order to grow, they have been liquidating forests to make way for export crops and to win natural resources, including timber and minerals. If they are going to stop this and to hang onto the forests, they will need reason to see that keeping the trees standing is a better business proposition than cutting them down. Hence the need for major international finance.

There are of course dangers. Lots of money can sometimes do more harm than good, in fuelling corruption, widening inequalities and funding conflicts, for example. There can be inadvertent impacts on local people, who can have their interests swept aside in order that governments can gain money from global funds. And there could be reduced pressure on the industrialised countries to reduce their own emissions, if the money they provide enables them to count reduced deforestation against, for example, emissions from their own coal-fired power stations.

Yes, we need big money, tens of billions, to pay rainforest countries to get out of the deforestation business. But it needs to be done right, in ways that improve people's welfare, uphold good governance and do not let the big global industrial polluters off the hook. It is not beyond human ingenuity to do this, but we need to now get on with it.

The rainforest issue is now completely different. A huge opportunity exists and it must be seized. Time is running out in the race to cut greenhouse emissions and the world must now act decisively. But it must also act in ways that maximise the chances of success. That means a fair deal that is not about aid but is about compensation and a deal that recognises every country's role in the fight against climate change.

Crucially, whatever the detail of the final deal (and hopefully one will be done at the climate change talks in Copenhagen in 2009), it has to be based on improving the welfare of people. That will not be easy and will in large part rely on the continuing struggles for land rights and just development making progress in countries across the developing world. No global treaty or deal can solve all these problems at once, but a global financial mechanism could be an important part of the mix.

Originally published by The Guardian.