World Bank Launches Finance Program to Reward Forest Preservation

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BALI, -- The World Bank Group unveiled a carbon finance incentive to encourage developing countries to reduce deforestation.

The group announced the Forest Carbon Partnership Facility last week at the U.N. climate change summit, and have so far garnered $165 million in commitments that will go toward rewarding developing countries that avoid carbon dioxide emissions by maintaining standing forests.

According to the World Bank, deforestation is responsible for some 20 percent of global emissions. In developing countries, the figure can be greater. For instance, deforestation is responsible for about 70 percent of emissions in Indonesia and 80 percent of emissions in Brazil.

The deforestation mechanism will be used post-Kyoto since the treaty doesn't include a carbon finance incentive.

So far, Germany has been the largest donor to the fund with $59 million, followed by the United Kingdom, Netherlands, Australia, Japan, France, Switzerland, Denmark, Finland, Norway and The Nature Conservancy, based in the U.S.

"The Forest Carbon Partnership Facility will set the stage for a much larger system of positive incentives and financing flows in the future to achieve the sustainable use of forest resources and conservation of biodiversity," said World Bank President Robert Zoellick. "Carbon finance provides a key new incentive for doing better by conservation and overcoming poverty in the forest sector. Clearly new funding sources are needed, and the private sector will be critical to raising the money."

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