A resplendent quetzal (Pharomachrus mocinno) in a cloud forest in Costa Rica. Photo by Francesco Veronesi, licensed under CC BY-SA 2.0.
Economist, conservationist, political leaders want tropical carbon tax to halt deforestation
- A February 13 comment piece published in Nature urges tropical countries to adopt a tax on carbon emissions in order to halt global warming, species loss, and deforestation.
- The authors of the piece include Edward B. Barbier, a distinguished professor of economics at Colorado State University in the USA; Ricardo Lozano, Colombia’s Minister of Environment and Sustainable Development; Carlos Manuel Rodríguez, Costa Rica’s Minister of Environment and Energy; and Sebastian Troëng, executive vice-president of US-based NGO Conservation International.
- “Tropical deforestation and land-use change must be halted to safeguard the climate and global biodiversity,” the authors write in Nature. “The widespread adoption of a tropical carbon tax is a practical way forward.”
A comment piece published in Nature urges tropical countries to adopt a tax on carbon emissions in order to halt global warming, species loss, and deforestation.
The authors of the piece include Edward B. Barbier, a distinguished professor of economics at Colorado State University in the US; Ricardo Lozano, Colombia’s Minister of Environment and Sustainable Development; Carlos Manuel Rodríguez, Costa Rica’s Minister of Environment and Energy; and Sebastian Troëng, executive vice-president of US-based NGO Conservation International.
“Tropical deforestation and land-use change must be halted to safeguard the climate and global biodiversity,” the authors write in Nature. “The widespread adoption of a tropical carbon tax is a practical way forward.”
Some 70% of the world’s biodiversity is found in 17 “megadiverse” countries, the authors note. Thirteen of those megadiverse countries also contain tropical forests, but they collectively lost nearly 7.3 million hectares (more than 18 million acres) of forest in 2018, “an area roughly the size of Panama.” The authors add: “According to our estimates, that represented nearly 30% of global deforestation and may have released about 7% of worldwide carbon emissions.”
Research has shown that so-called “natural climate solutions” — conservation, restoration, and improved land management activities that boost carbon storage or avoid greenhouse gas emissions from forests, wetlands, grasslands, and agricultural lands — can provide 37% of the global warming mitigation needed between now and 2030 to keep temperature rise below 2 degrees Celsius. But in many tropical countries, funds for these natural climate solutions is lacking.
That’s where a carbon tax could make a big difference, the authors of the Nature piece argue: “To plug this gap, we urge more countries that have tropical forests to adopt a tropical carbon tax — in South and Central America, Africa, Asia and the Pacific. This is a levy on fossil fuels that is invested in natural climate solutions. Such a policy can reduce the use of oil, gas and coal and mobilize domestic funds for adaptation and mitigation.”
The inclusion of Ministers Lozano and Rodríguez as co-authors of the piece was no accident, as Colombia and Costa Rica serve as the primary examples the authors use to demonstrate the benefits of taxing carbon emissions from fossil fuels.
Costa Rica has collected a 3.5% tax on fossil fuels since 1997, which today generates $26.5 million per year. Through its National Forest Fund, Costa Rica invests that money in forest conservation and restoration as well as agroforestry initiatives. Costa Rica had some of the highest rates of deforestation in the world in the 1980s, but these investments helped forest cover more than double in the country between 1986 and 2013.
Colombia adopted a tax of $5 per metric ton of emitted carbon in 2016, leading to revenues of $148 million in 2017 and $91 million in 2018. Projects waiting to access these funds are still in development, but, via the Colombian Peace Fund, 25% of those revenues will be spent on managing coastal erosion, reducing and monitoring deforestation, conserving water sources, protecting strategic ecosystems, and combating climate change. Another 5% of the revenues will go towards strengthening Colombia’s National System of Protected Areas.
Barbier, Lozano, Rodríguez, and Troëng lay out two scenarios for how tropical countries might implement a carbon tax. In one scenario, countries adopt a policy similar to Colombia’s by introducing a tax of $5 for each metric ton of carbon emitted and using 30% of the revenues to fund natural climate solutions like forest conservation. In the second scenario, a tax of $15 per metric ton of carbon emitted is levied, with 70% of the revenues allocated to natural climate solutions.
“Our own analysis shows that, if 12 other countries roll out a tropical carbon tax similar to Colombia’s, they could raise US$1.8 billion each year between them to invest in natural habitats that benefit the climate,” the authors write.
Some countries, such as Ecuador, India, Malaysia, Mexico, and the Philippines, would stand to gain hundreds of dollars per hectare that could be spent countering forest destruction. Under the second, more ambitious scenario, each country could raise nearly $13 billion every year to fund natural climate solutions. The authors say that “Brazil, the Democratic Republic of the Congo and Indonesia would benefit the most, because they currently have the greatest amount of deforestation. Countries that have experience in developing high-quality carbon-offset projects, such as Peru and Ecuador, are well positioned to adopt a tropical carbon tax.”
The authors cite two ways that the international community can help promote widespread adoption of a tropical carbon tax: financial assistance for low-income countries that can’t raise sufficient funds from a carbon tax, and technical support to guide and monitor investments in natural climate solutions.
They write: “We call on governments, development banks, financial investors and non-governmental organizations to support those countries that need financial and technical help to implement this policy, and to ensure that the money raised is spent efficiently and effectively.”
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