The U.S., Norwegian and British governments have joined forces with a group of big companies to cut greenhouse gas emissions by rewarding countries that put a stop to the destruction of tropical forests.
By tapping into private investors, the plan would demonstrate the efforts by world governments to marshal private money in the costly fight against climate change.
The plan so far includes commitments from household names such as Amazon, Airbnb, Bayer, Boston Consulting Group, GlaxoSmithKline, McKinsey, Nestlé, Salesforce and Unilever. Those nine big companies would work with the United States, Norway and Britain to invest at least $1 billion in the plan before the end of the year and substantially more in the following years. (Amazon CEO Jeff Bezos owns The Washington Post.)
“We can’t succeed in the fight against climate change if we don’t protect tropical forests,” said Nathaniel Keohane, senior vice president at the Environmental Defense Fund, noting that more than 25 percent of global greenhouse gas emissions would be avoided if existing forests were protected.
Doing that isn’t easy. Corruption of local officials has fueled deforestation by ranchers, loggers and growers of cocoa trees from Latin America to western Africa to Indonesia and beyond. Under Brazilian President Jair Bolsonaro, deforestation has surged to a 12-year high. Worldwide, the destruction of primary rainforests increased by 12 percent from 2019 to 2020. Overall, the world lost more than 4.4 million hectares of primary tropical forest cover last year, an area larger than Switzerland.
In many cases, deforestation was done in ways that treated Indigenous people poorly.
The new initiative, called Lowering Emissions by Accelerating Forest finance Coalition, or LEAF, has better chances of success and compliance than with past anti-deforestation efforts because the countries with forests must take on the responsibility for protecting them, according to Eron Bloomgarden, executive director of Emergent Forest Finance Accelerator, a nonprofit intermediary acting to bring together countries with tropical forests and the international private sector.
Under the agreements, the corporations would pay an amount equal to $10 a ton for avoided carbon dioxide emissions. The countries or large states with the forests would be paid only after showing a five-year record of success compared with historical five-year benchmarks. Those governments would be in charge of enforcing the rules in their jurisdictions.
The companies say they will not earn any return on their investments and are sinking money into the forestry projects out of concern about climate change, as well as pressure from consumers and shareholders. To participate in the program, they must have already pledged to achieve net-zero carbon emissions by 2050 or sooner.
Stopping deforestation can create stronger brands, higher sales and lower costs, said Mark Engel, chief supply chain officer at Anglo-Dutch consumer products maker Unilever. “They don’t necessarily have traditional financial returns, but returns can have many faces,” he said.
Unilever has set a climate goal of having net-zero emissions by 2039, 11 years sooner than the target set in the Paris climate accord. It also has pledged to eliminate deforestation in its supply chain by 2023.
“It’s clear that consumers and younger people care a great deal about the environment,” Engel said. “Not just deforestation but carbon in general. We want to stay relevant for consumers with our brands.”
In the past, many investors bought credits that could be used in cap-and-trade programs to offset their greenhouse gas emissions. But compliance often broke down. In some places, one forested area might be left alone, while another down the road was cut down.
But surveillance of tropical forests has grown easier with advances in monitoring devices such as satellite technology.
Recently, Brazil’s environment minister, Ricardo Salles, offered to make a deal with the Biden administration and other governments. He said that if Brazil were paid $1 billion now, it would reduce deforestation by 40 percent. If paid $10 billion Brazil would halt deforestation, the minister said in an April 16 interview with Reuters.
Bolsonaro said Thursday that he would eliminate illegal deforestation by 2030, even though illegal loggers and farmers have felt encouraged by him and have become a significant base of support for the Brazilian president. Bolsonaro moved up the date of becoming carbon neutral to 2050 from 2060.
“If you could imagine a type of growth with hundreds of companies, getting to that level would become feasible,” said Nigel Purvis, chief executive of the climate advocacy group Climate Advisers. “It sends a signal to developing countries that we are serious.”
Emergent Forest Finance Accelerator will help monitor performance. “We need lots of tools, carrots and sticks,” Bloomgarden said. “But we think this is a really important carrot.”
Bloomgarden said he has been surprised by the amount of interest the deforestation project has attracted as more and more companies become involved in climate change and its potential impact.
“This feels real,” Bloomgarden said, “There are a lot of pressures and forces on companies to do this and maintain it. The scale and speed of expansion is unprecedented.”