Brazil has proposed a new way of providing incentives to developing nations to prevent deforestation. The government wants an international loan fund set up that is tied specifically to action to prevent native forests being cut down.

The proposal is an alternative mechanism to that suggested by the Coalition of Rainforest Nations (CRN) led by Papua-New Guinea and Costa Rica which would see the system of carbon offset credits extended to avoided deforestation. Currently international carbon credit schemes such as Kyoto's CDM only allow credits for reforestation of cleared land and afforestation of land never forested.

Brazil opposes the CRN proposal saying it would lead to fossil fuel companies soaking up all the available credits and thus allow them to avoid reducing their own greenhouse gas emissions.

Deforestation is responsible for up to 20 per cent of the human-induced increase in greenhouse emissions because most felled trees ultimately see their stored carbon released into the atmosphere.

Brazilian Environment Minister Marina Silva says the new proposal would be taken to upcoming global climate talks later this year. It would require countries to meet targets to reduce deforestation rates below 1990s levels in order to earn access to loan funds.

Reuters 1/9/06