Time for a tropical carbon tax, experts say

© Gary Tognoni

Driven by agriculture and logging, tropical deforestation rates have soared across the globe. In the Amazon, the world’s largest rainforest, forest destruction has surged a staggering 85 percent since 2018.

But two countries have charted a different course.

Both Costa Rica and Colombia are cutting greenhouse gas emissions while generating revenue by protecting and restoring their forests through a tax on carbon emissions.

In an article published today in Climate Home News, Conservation International Executive Vice President Sebastian Troëng and economist Edward Barbier extolled the vast potential of carbon taxes to reduce deforestation, cut greenhouse gas emissions and protect global biodiversity. This article builds off of Troëng and Barbier’s recent essay supporting carbon taxes, which was published in Nature and co-authored by Costa Rica’s Minister of Environment and Energy, Carlos Manuel Rodríguez, and Colombia’s Minister of Environment and Sustainable Development, Ricardo Lozano.

A carbon tax levied on the private sector, for example, would require companies to pay a fee for their fossil fuel use, motivating them to limit their reliance on oil and gas in the process.

The countries that have embraced the environmental and economic benefits of carbon taxes are channeling some of the revenue raised by the tax directly into conservation activities to slow climate breakdown — primarily protecting and restoring their tropical forests.

“Most of the carbon emissions from tropical forest countries come from deforestation, and a carbon tax used to finance conservation creates a double incentive to both reduce use of fossil fuels and to reduce deforestation,” Troëng said. “It is a win-win-win as emissions are reduced, forests are kept intact and rural communities benefit from carbon payments.”

In the Amazon Basin, Colombia’s carbon tax has already generated more than US$ 250 million since its implementation in 2017, a quarter of which is used to manage coastal erosion, reduce deforestation, conserve water sources and combat climate change. An additional 5 percent is dedicated to maintaining the country’s National Protected Areas System through a national trust fund, which covers nearly 17 million hectares (42 million acres) of land.

A carbon tax has shown similarly rapid — and profitable — results in Costa Rica, country known for its dedication to protecting nature. Generating US$ 26.5 million per year, Costa Rica’s carbon tax is linked with the country’s “payment for ecosystem services” program, which pays farmers and landowners who protect and restore their forests for the carbon, water and biodiversity services their land provides.

Imposing a carbon tax could help tropical countries all over the world reach their emissions reductions goals by funding natural climate solutions, Troëng explained, while benefiting rural communities who depend on nature for their survival.

“A tropical carbon tax offers a practical mechanism for conserving forests and protecting biodiversity — and could allow tropical forest countries to collectively generate billions each year, without having to rely on outside donors,” Troëng said. “It is one of the most direct and pragmatic approaches to scale up forest conservation.”

Read the full story here.

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Cover image: Mangroves in Colombia. (© Gary Tognoni)

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