A New Economic Model For Protecting Tropical Forests | Nat Keohane | TED

Tropical forests are one of the world's most important carbon sinks,

absorbing over one fifth of the emissions

from burning fossil fuels every year.

The latest research suggests that without them

the world would already be nearly one degree Celsius hotter.

We can't solve climate change without tropical forests.

But right now,

instead of protecting forests, we're cutting them down.

Already, about one sixth of the Amazon has been lost,

and some scientists fear that we're nearing a tipping point

that could mean loss of the entire forest.

Forests in Indonesia and Malaysia,

even the vast forests of Central Africa, are under threat as well.

And deforestation means carbon pollution.

In fact, tropical deforestation worldwide accounts for almost as much emissions

as all the world's cars and trucks combined.

So losing tropical forests means losing any hope

of limiting the rise in global temperatures

to 1.5 or even two degrees Celsius.

The heart of the problem is economic.

As long as it's profitable to chop down forests for timber

or clear them for agriculture, we'll continue to lose them.

Now, I'm not suggesting that we try to halt capitalism in its tracks.

We need to fix the market, not abandon it.

We need a new and better economic development model

for tropical forest countries.

And that means changing the incentives

so that forests are worth more alive than dead.

If we can do that,

we will drive investment into tropical forest protection

while also producing the goods and services we need.

This is the Amazon forest in Mato Grosso,

a Brazilian state that's as large as Texas and a chunk of California combined,

and one of the world's largest producers of beef and soy.

Mato Grosso is now a model of economic development

and forest protection.

But back in 2004,

Mato Grosso was one of the world's largest carbon polluters

entirely because of tropical deforestation.

Since then, deforestation is down over 85 percent.

How?

Well, Mato Grosso didn't reduce emissions by shutting down agriculture.

Instead, with support from the governments of Germany and Norway,

it stepped up enforcement against illegal land grabbers.

It empowered local communities and indigenous populations

to protect their territories.

It worked with agricultural producers and traders across the supply chain

to invest in new and more sustainable production methods.

These efforts were supported by a broad array of NGOs and businesses

and Indigenous organizations.

And they worked so well

that when a new governor was elected in 2018,

he immediately affirmed his commitment to reducing deforestation

and continued the state’s policies.

Because he saw how these new policies were attracting new investment

and laying the foundation for sustainable growth.

If we're going to stave off climate catastrophe,

the world needs many more Mato Grossos.

Now, Mato Grosso began its bold experiment with public funding.

But if we're going to preserve and extend those gains

and scale them up to jurisdictions around the world,

we need a new and more durable and much larger source of forest finance.

And the key to unlocking that finance?

Making forests worth more alive than dead.

That means putting a value on standing forests

in a way that channels new investment, hard cash, into sustainable green growth

that protects the forests

while supporting the livelihoods of people who live there.

It's a development model that could make Brazil and Indonesia

and other forest nations

the world’s first green economic superpowers,

that allows them to capture the full value of their natural resources.

This is the goal of the LEAF Coalition.

LEAF stands for Lowering Emissions by Accelerating Forest finance.

It's a coalition of 12 companies and three countries

that has committed one billion dollars in finance

for forest protection at scale over the next five years,

one of the largest-ever public-private investments in forest protection.

That first billion dollars

will pay for 100 million tons of emissions reductions,

with the prospect of many more billions to come.

I have a special connection to this story

because the idea that became LEAF

was drawn up on a whiteboard in my old office

at Environmental Defense Fund over eight years ago.

Now, if I had been giving this talk then,

it would have been purely theoretical.

But that was before the full success of Mato Grosso

and before the key building blocks that made LEAF possible

were put into place.

These three building blocks are essential to any credible market.

Accurate measurement,

a standard for quality

and a platform for transactions.

First, credible forest transactions require accurate and precise measurement,

and thanks to advances in satellite data and remote sensing,

we can measure the amount of carbon a forest contains

and track changes in real time.

The second building block is a standard for quality

so that buyers of emissions reductions

can be certain they're getting the real thing.

At LEAF we use a new approach

that focuses on the performance not of individual forests,

but of entire official jurisdictions, like a state or nation.

It builds in buffers against risks like forest fire,

and it requires countries, forest nations,

to increase their ambition over time.

The third and final building block is a platform for transactions.

We created a financial intermediary called Emergent

that connects sellers,

forest nations that have emissions reductions that they can sell,

with buyers who include companies that are looking to make good

on their voluntary climate commitments.

You put those three building blocks together

and you get a reliable and robust market for forest carbon

that enables economies to thrive while protecting the forest.

We know it's possible.

In Mato Grosso,

soy production more than doubled

and cattle increased by over a quarter,

even as deforestation plummeted.

So the LEAF model promises better outcomes for forests,

better outcomes for the people who live there

and better outcomes for the forest nations as a whole.

But you may be asking, what's in it for the companies?

Well, now more than ever,

companies see a business case for climate action.

Their customers are demanding it,

their investors are,

so are their employees.

And companies recognize that truly leading on climate

means doing two things.

First, reducing emissions in their own operations and supply chains.

And the companies that are part of LEAF

have all been required to set science-based targets

for their own emissions.

Second, they must contribute to the broader fight.

And one of the most important ways that these companies,

or any company,

can help solve climate change outside their own operations

and supply chains

is by protecting tropical forests.

So that bears repeating.

Companies in LEAF are investing in forest protection

over and above what they're doing to reduce their own emissions.

It's not a substitute,

it's a supplement.

Because if we're going to solve climate change,

we need to achieve both deep cuts in fossil fuel emissions

and dramatic reductions in forest emissions.

It took over a decade to put all of the building blocks in place

that made LEAF possible.

And the results so far are enormously encouraging.

In the next ten years,

if we can expand LEAF globally, we can stop tropical deforestation,

protect some of the largest carbon sinks on the planet,

and enable forest nations and local populations to thrive and grow.

All because we harness the power of the market

to reflect the full value of standing forests

and make them worth more alive than dead.

Thank you.

(Applause)