Climate policy will create both disincentives and incentives for tropical deforestation. While a REDD scheme will offer an incentive for forest conservation, climate policy in the form of a carbon tax or a cap-and-trade system will also augment the profitability of biomass plantations through an increased demand for carbon neutral energy sources. This, in turn, would raise the value of land, making preservation more difficult and emission reductions from reduced tropical deforestation more costly than currently assumed.
This is the outcome of a new study released by U. Martin Persson and Christian Azar, of the G__teborg University. The study analyze the land competition between bioenergy plantations and forest conservation, finding that deforesting for high-yielding bioenergy systems, like palm oil, is likely to remain highly profitable in the future, even in the face of a price on the carbon emissions from forest clearing. Current efforts to include carbon emissions from tropical deforestation in a future international climate regime, while a step in the right direction, may therefore not suffice as protection for the world's tropical forests -- additional, and stronger, protection measures which value more aspects than solely carbon retention, will still be needed.