Prince of Wales Proposes Rainforest Bonds to Halt Deforestation

At the meeting, the international leaders agreed that emergency interim financing is needed to stop the destruction of the world's rainforests to help prevent climate change.

To build on that consensus, the leaders agreed to establish an expert level international Working Group to examine the proposals of the Prince's Rainforests Project, together with other proposals. The Working Group will aim to find a way of providing interim emergency funding to help rainforest nations make the trees worth more alive than dead before other international financing mechanisms take effect.

Government leaders at the Prince of Wales rainforest meeting, April 1, 2009. (Photo courtesy Buckingham Palace)

The Prince's Rainforests Project proposes a Rainforest Bond that could be issued in global private capital markets to raise financing for an emergency package. The bonds would be paid back with the proceeds from clean development investments or domestic carbon permit auctions, the Prince proposes.

Rainforest Bonds could be issued by the World Bank, or by an independent entity with support from the World Bank, according to the proposal. The bonds would be guaranteed by developed country governments, which would be responsible for payment of the coupon and repayment of the principal.

Officials from the project have held discussions with pension funds and the insurance sector which "indicate that there would be significant demand for AAA-rated bonds with long-term maturities," the project proposal states.

The Prince said, "I believe that the consensus achieved at this meeting will enable the development of an approach to dealing with the issue of deforestation capable not only of easing the plight of millions of the poorest people on our planet but also of giving us that most elusive and precious gift in our fight against climate change, time."

The 50 minute meeting at St. James's Palace attracted many of the heads of state and government in London for tomorrow's G20 Summit on recovery from the global financial crisis, including the leaders of Australia, France, Germany, Guyana, Indonesia, Italy, Japan, Norway, Saudi Arabia and the European Union.

Prince Charles said, "I, like many of us round this table, have come to the conclusion that the first and essential step in the battle against climate change is to help rainforest nations curb tropical rainforest destruction. Stopping deforestation is the most readily achievable and cost effective action we can take in the short term."

"It is the low hanging fruit which we must grasp as soon as possible if we are to forestall tipping points in our planet's natural systems which may affect irretrievably its habitability for mankind," the Prince said.

The Prince of Wales (Photo courtesy Garden Organic)

Tropical deforestation accounts for roughly 17 percent of global greenhouse gas emissions each year.

Prince Charles said, "The destruction of the rainforests is emitting massive amounts of CO2 into the atmosphere and is also reducing the capacity of the Earth to absorb CO2."

Rainforests provide ecosystem services such as regulating rainfall, storing water and preserving over half the planet's biodiversity. These forests are disappearing at what the Prince called "an alarming rate," driven by global demand for timber, food and other commodities.

The heir to the UK throne established the Prince's Rainforest Project in the fall of 2007 to make rainforest resources "worth more alive than dead" in countries where producers are clearing their forests to meet a demand commodities such as soya, beef, palm oil, and timber.

The Prince praised the participants of the meeting for having the "wisdom and foresight to pause, consider and determine a course of action to save the planet's rainforests and therefore secure the future of our children and grandchildren – for that is really what it is all about."

But the Prince's Rainforest Bonds proposal ran into immediate opposition from the Global Forest Coalition, a worldwide network of environmental organizations and indigenous peoples organizations.

Dr. Miguel Lovera, who chairs the coalition, said, "Carbon markets have proven to be a highly unreliable source of funding for environmental protection. The last thing forests and forest peoples need is yet another form of financial speculation."

Restoration of Indonesia's Harapan Rainforest attracted the Prince's attention last fall during his visit to the area. (Photo by Marco Lambertini courtesy BirdLife International)

"Indigenous peoples have proven to be capable of conserving and restoring their forests, but since we do not destroy forests, we will not be able to sell projects to reduce deforestation on the carbon market," said Marcial Arias, policy advisor of the International Alliance of Indigenous and Tribal Peoples of the Tropical Forest, who is attending the climate negotiations in Bonn, Germany this week.

"Instead, said Arias, "we are already seeing how indigenous peoples are being forcibly displaced from their land by carbon traders who want to use their lands to establish monoculture tree plantations."

Global Forest Coalition supports the position of the participants in the UK Climate Camp, who are in the streets of London to oppose carbon markets.

"Carbon markets favor a handful of polluters only," said Anne Petermann, North American focal point for the Global Forest Coalition and executive director of the Global Justice Ecology Project.

"In terms of mitigating climate change, carbon markets have proven to be a waste of time and money," Petermann said. "The climate crisis is escalating so rapidly that we need both an immediate halt to deforestation and a clear commitment of the developed country members of the G20 to take the lead and commit to the necessary reduction of at least 80 percent in their greenhouse gas emissions - with no carbon offsets."

Click here to download "An Emergency Package for Tropical Rainforests" by The Prince's Rainforests Project.

The Prince of Wales' rainforest proposal meeting was attended by Prime Minister of Italy Silvio Berlusconi, President of France Nicholas Sarkozy, Chancellor of Germany Angela Merkel, Prince Saud Al'Faisal of Saudi Arabia, Prime Minister of Guyana Samuel Hinds, Prime Minister of Australia Kevin Rudd, Prime Minister of Japan Taro Aso, President of Indonesia Susilo Bambang Yudhoyono, Prime Minister of Norway Jens Stoltenberg, President of the European Commission Jose Manuel Barroso, Secretary-General United Nations Ban Ki-moon, U.S. Secretary of State Hillary Clinton, Gabon Minister of Defence Ali Bongo Ondimba, Brazil Minister of External Relations Ambassador Celso Amorim, Canadian Minister of Finance James Flaherty, World Bank President Robert Zoellick, and Chairman of Lloyds of London and representative of the insurance industry's ClimateWise, Lord Levene of Portsoken.

Attending from the UK were Secretary of State for Energy and Climate Change Ed Miliband, Secretary of State for Environment, Food and Rural Affairs Hilary Benn, Secretary of State for International Development Douglas Alexander and Foreign Secretary David Miliband.

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