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The carbon credits crossroads

As climate change is a global problem, one of the strategies created to mitigate this issue are the carbon markets which emerged with the purpose of diminishing greenhouse gas (GHG, or “carbon”) emissions and thus decrease global warming. Therefore, governments who want to comply with goals to mitigate these effects usually purchase these bonuses in other countries which have regions preserved for preservation.

One of the mechanisms developed to carry out this exchange are the carbon credits which allow developed countries (such as the European Union, China or the United States), and some corporations, to invest in projects to reduce carbon emissions in developing countries such as Colombia. Usually, these governments pay for these services in an equivalent to tons or hectares of stored preserved carbon.

In Latin America, the Amazon (7.4 million square kilometers) represents 4.9% of the world continental area, as its extension includes territories of Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Surinam, and Venezuela. According to the World Bank, this is a strategic ecosystem for carbon capturing at a global scale and which in 2014 was equivalent to more than 36 kilotons.

However, countries such as Costa Rica, Mexico, and Bolivia are the most advanced in implementing the standards which regulate what is known as “payment for environmental services.”

While forest felling releases great amounts of carbon, carbon credits were designed to avoid deforestation, therefore each time a tree is cut, the biomass that could be stored is released.

According to the Food and Agriculture Organization of the United Nations (FAO) State of the World’s Forests (SOFO) report of 2016, as of 1990, the world had lost close 129 million hectares of forests. The report also says that Africa and South America had the highest annual loss of forests between 2010 and 2015, with 2.8 and 2 million hectares respectively.

In Colombia, the Hydrology, Meteorology and Environmental Studies Institute (IDEAM, for its Spanish acronym) Report on early deforestation warning says that between January and March of 2018 its satellite discovered 23 new patches of than 50 hectares. The municipalities of La Macarena (Province of Meta), San Vicente del Caguán (Province of Caquetá) and Tibú (Province of Norte de Santander) had 46% of these alerts, a 32% national increase.

Although this logic seeks to pay for avoiding loss of existent forests, it does not include additional measures such as reforestation of industrialized countries or the reduction of environmental pollution as a product of an increased industrial production.

Therefore, countries such as Colombia have implemented programs directed to reduce emissions due to breakdown or deforestation, such as the REDD+ program, which could be included in the carbon market.

One of the goals of these programs is to sell this natural resources “surplus” to other countries, people, corporations, organizations or governments. However, one of the issues for its implementation is that the short-term benefits obtained by these actions are fewer than selling wood, for instance, which has a great demand in the market.

“Although the benefits return is not measured in economic but environmental and social terms, many times the economic valuation is a lot higher than the use value for forests,” said Laura Victoria Calderónof the Universidad Nacional de Colombia (UNal) Environmental Studies Institute (IDEA, for its Spanish acronym).

Payment for environmental services

One of the mechanisms implemented by the Colombian government for environmental credits is payment for environmental services.  A sort of reward in cash provided to people to maintain their forests.

Different from the credits, payments for environmental services implemented in Colombia, is that they are voluntary agreements between those that occupy a land and those who pay, which may be state agencies or private sector representatives such as companies or ordinary people.

The long-term goal is for these lands to be destined for productive activities and not risk the ecosystemic service of the forest.

In most cases, they perform a funds transference equivalent to a Colombian minimum wage (COL $781,242) to protect the area according to instructions of the Regional Autonomous Corporations.

Each corporation chooses the family which participates in the program independently, guaranteeing the amount paid, according to the results of an internal oversight.

For Colombia, payments for environmental services are focused on water resources located in Andean tundras and highlands with particular emphasis on those areas small towns and cities depend for their water supply.

The uncertainness of the property of great extensions of land, due to land titling issues, makes contract sustainability a risk. According to a research project entitled “Institutional design for agrarian property rights in Colombia in compared perspective”, carried out by the Universidad del Rosario, in more than 47% of the property titles allotted by the government (barren lands) the property right was not completed for more than 50 years.

Many peasant landowners do not have documents that certify ownership which would allow them to have access to these funds, despite having ownership for many years and that is the main weakness of implementing the system,” said Dr. Nohra León Rodríguez, UNal professor and specialist in environmental issues.

The preceding without taking into account land hoarding which is one of the main causes of environmental degradation which has impacted different areas such as the Andean tundras of Sumapaz, Guerrero or the Cundinamarca-Boyacá Provinces high plateau.

Uncertain future

“Although in theory, payment for environmental services acknowledges a family what is lost for preserving an area, in many cases these funds turn out to be insignificant in comparison to what they would receive by selling products the land could produce,” said the researcher.

For León, the peasant communities that live in protected areas are the most suitable to preserve the natural resources because they have a sustainability criterion completely opposed to mining companies.

Colombia has signed sustainable development and biodiversity agreements such as the Paris Agreement to face climate change. These topics were included in the Peace Agreement between the former administration and the guerrilla group FARC; however, the reforms announced to the peace agreement by the incoming administration could produce a significant backlash of these regulations or simply reduce them to blue laws.

According to the Economic Commission for Latin America (ECLA), the Colombian National Natural Parks and the Moore Foundation currently, the most strategic preservation area is the Amazon forest, which for Colombia, corresponds to the Provinces of Amazonas, Caquetá, Guainía, Guaviare, Putumayo, and Vaupés, with an area of approximately 476,000 km², which is equivalent to 6.4% of the Amazonian biome and 41.8% of the Colombian territory.

The more a forest is developed, more carbon it will have stored, which will depend on its life expectancy as the width of its trunk. It is estimated that a tree with a trunk greater than 5cms and as high as 1.5m could fall into this category.

Without a clear government policy in face of environmental issues or efficient alternatives for rebuilding the lives of people most affected by the armed conflict, the country could experience a downfall of its natural resources whose impact over the local and regional economy will be irreparable.

Consejo Editorial