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On the way here, our group — led by Ricardo Miranda de Britez and his team of forestry experts from the Brazilian conservation group Society for Wildlife Research and Environmental Education (SPVS) — walked past clusters of yellow-and-white orchids, stepped over the footprints of an ocelot, kept an eye out for the endangered golden lion tamarin, and were bitten by, it seems, every one of the thousands of species of insects native to the area.

These trees are our partners in respiration, inhaling carbon dioxide, exhaling oxygen, and storing the carbon in their trunks and leaves. That simple process makes them one of Earth’s most potent bulwarks against climate change (aka a “carbon sink”); but when they are cut and burned, all that stored carbon is released into the atmosphere. Already, some 32 million acres of tropical rainforest are destroyed each year, an amount of land equivalent in size to the state of Mississippi; deforestation, according to the United Nations, is responsible for roughly one-fifth of all greenhouse gas emissions.

What will it cost to keep those trees standing? And who’s going to pay for it? The challenge of assigning precise values to an increasingly rare commodity — wild trees — and indeed the question of whether they are a commodity at all, is one of the most hotly contested in the climate world.

It was an unusual deal that landed tree No. 129 at the centre of the debate.

Between 2000 and 2002, the US-based Nature Conservancy struck an alliance with three of the planet’s leading carbon emitters: General Motors, Chevron, and American Electric Power. Together the corporations gave the environmental group $18 million to purchase 50,000 acres of Brazilian Atlantic forest, much of which had been degraded by grazing. Three reserves were created: Serra do Itaqui, financed with $5 million from AEP; Morro da Mina, paid for with $3 million from Chevron; and Cachoeira, underwritten by $10 million from GM. (GM’s role in the project survived the company’s bankruptcy, which means that No. 129 is now partially owned by American taxpayers.)

SPVS was brought in to manage the reserves, which together form one contiguous forest known as the Guaraqueçaba Environmental Protection Area. You’ll see Guaraqueçaba promoted on the Nature Conservancy’s website as an example of corporate partnerships that make “an invaluable contribution to the preservation of the planet’s biodiversity”. What you won’t see is what the companies get out of the deal: the potentially lucrative rights to the carbon sequestered in the trees.

At tree No. 129, de Britez takes out a tape measure and unspools it around the trunk. We’re at one of the 190 carbon dioxide measuring stations — each a group of trees with numbered plaques — scattered around the Guaraqueçaba forest. Documenting the bulk of the reserve’s trees is an ongoing enterprise, like tracking tagged whales.

“We measure the biomass of these trees and their carbon sequestration,” de Britez says as a ranger picks up the other end of the tape measure and writes down No. 129’s stats. It’s three feet in diameter and about 45 feet tall. He estimates the carbon it contains at 95 kilograms — just under one-tenth of a tonne. At $10 a tonne — the upper end of the range at which carbon offsets trade in the US — No. 129 is worth about $1. Scale up to the two to three tons of carbon per acre that de Britez estimates across the 50,000-acre reserve, and the potential payoff, in addition to the public relations value, comes into focus.

The trees in the Cachoeira reserve could never offset even a fraction of GM’s total carbon footprint — a single Hummer (which the company started producing the same year it signed on to the Guaraqueçaba project) would require about 50 trees to offset. But the Nature Conservancy and its partners aimed to use the Brazilian reserves as a test case for preserving forests via corporate carbon credits. “The investors wanted to be pioneers in the carbon-sink field,” de Britez explains. “They had in mind to start working on this before other companies.”

All three companies, as it happens, had aggressively lobbied the Clinton administration against signing the 1997 Kyoto climate accord and stayed mum when President Bush withdrew from it. But they hedged their bets, figuring that the Brazilian forests could be turned into offsets to sell in places (like Europe) where Kyoto’s emission limits did apply, or could be held in reserve in case the US ever established its own limits.

By the time the companies were ready to begin preparing their credits for sale, however, the UN had refused to allow “avoided deforestation” projects — those that buy forestland and then promise not to cut the trees — as an offset for industries seeking to buy their way out of emission limits. Credits generated from projects like Guaraqueçaba were excluded from the international carbon market launched by Kyoto, a market that now accounts for more than $126 billion in offset transactions. The offsets could be sold, however, in the United States, where the $700 million domestic carbon offset market is unregulated (and where prices are generally half those of Kyoto-regulated offsets).

Manyu Chang, a forest scientist who is the coordinator for climate policy for the state of Paraná, explained the problem with avoided-deforestation credits to me at her office in the state capital of Curitiba.

For starters, she said, trees — living beings, after all — are far less predictable than, say, windmills. They are subject to the vagaries of fires and disease, both of which are increasing due to climate change. Each species absorbs carbon at different rates depending on factors like the altitude, soil, and weather. Then there’s the problem of “leakage” — when deforestation simply shifts from protected zones to unprotected ones, creating no overall emissions reduction. And finally, the UN did not want to open the door to a perverse sort of extortion: a country could threaten to open its lands to logging unless it was paid to not do so.

More fundamentally, Chang notes, when companies create reserves on already forested lands, their contribution to the fight against climate change is limited: “Do they get the credit for simply enhancing what was there already?” José Miguez, one of Brazil’s top climate officials, told me that during the Kyoto talks his government opposed using its forests to enable northern industries to pollute more. “The forest is there,” he said. “You can’t guarantee it will absorb extra carbon. The General Motors plan gives a false image to the public in the United States. For us, they are pretending to combat climate change.”

The supply of forests for offsetting pollution in developed countries is, potentially, almost infinite. There are an estimated 90 billion tons of carbon in Brazil’s forests alone, and billions of tons more are sequestered in Indonesia, the Democratic Republic of the Congo, Malaysia, Papua New Guinea, and other nations with substantial tropical forests, which are considered the most vulnerable to deforestation. The world has a major stake in keeping all that carbon where it is. The question that remains after a weak outcome at Copenhagen is whether the fate of the forests — and their people — will rest on the ability of industries to pay for preserving distant trees rather than reducing emissions closer to home.

This is the first in a two-part series: tomorrow Mark will look at how carbon offset schemes are affecting the lives and livelihood of those who call the world’s forests home. This article was first published in Mother Jones magazine and released in collaboration with Frontline/World, the public television investigative series. Watch a video version of the story here.

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