It’s a balmy 67 degrees in San Diego and I’m back home at my local coffee shop, sipping Chai Tea Latte.  A short 24 hours ago, I was in the snow and bitter cold of Copenhagen, Denmark, attending the 15th meeting of the Conference of Parties (COP15) climate summit.

For two brief weeks, people from around the world had been gathered to discuss how carbon emissions are affecting our environment.  Despite a failure to sign a major agreement, the victory of the conference has been its ability to focus world attention on climate change issues.  COP-15 has captured the public’s interest, raised awareness and energized ordinary citizens into action.

Acknowledging the gravity of climate change is a difficult task to consider as I sip a tasty beverage in the comfort of my shorts and t-shirt.  Perhaps the single largest challenge for reducing carbon emissions is to convey a sense of urgency to those who are the least affected.  Has our own comfortable condition lulled us into a sense of complacency?

What, Me Worry?

As Americans, we have enjoyed a cultural bias towards short term gratification.  This attitude is demonstrated by our invention of the credit card and its widespread use.  It can also be found in our cultural icons, such as the famous Popeye comic strip character Wimpy, who proclaimed “I would gladly pay you Tuesday for a hamburger today.”

Americans have also demonstrated that they are among the most generous in the world to respond to international relief efforts following natural disasters such as tsunamis, earthquakes and floods.  Unfortunately, we wait until after the disaster occurs to spring into action.

Climate Refugees?

At the COP-15 climate summit this week in Copenhagen, I took particular note of a group of seven countries that made desperate pleas to save their tiny island nations.  Most countries at these international treaty negotiations have established 2 degrees as the maximum allowable increase in global temperature that the planet can sustain, before catastrophic effects are felt.  However, countries such as Tuvalu and Maldives are now insisting that any increases greater then 1.5 degrees would mean the complete destruction of their countries and require entire populations to relocate to higher ground.

The speeches from these countries were passionate and thought provoking.  Can you imagine being sent to Copenhagen as your country’s representative with the task of saving your homeland?  A few years ago we sent my hometown San Diego Chargers to the playoffs.  When they failed their task and come home empty handed, we still gave them a parade downtown.  I hope the other countries are as generous to their delegations.

“The entire population of Tuvalu lives below two meters above sea level,” said Ian Fry, a delegate from Tuvalu.  In a plenary session in front of hundreds of dignitaries, he ended his presentation by saying “I woke this morning, and I was crying, and that’s not easy for a grown man to admit. The fate of my country rests in your hands.”  You can watch the entire presentation here: http://www.youtube.com/watch?v=oUyZOgcHn-Q

I’d Like to Teach the World to Sing…

If you’ve ever seen the famous 1971 TV commercial, you might think that the solution to world happiness is just giving everybody a Coke and teaching them to sing together.  The problem with this approach, of course, is the consequences of proliferating emissions associated with carbon intensive lifestyles.

If the United States represents 5% of the world population, but is responsible for 25% of its emissions, what happens when every person in China or India decides that they’d like to live the good life, too?  What happens to the environment when everybody in the world wants to drive a Hummer, live in a McMansion and enjoy a standard of living like the one experienced in the US?

It’s not that developing countries want a Starbucks on every corner. Many just want running water and electricity that actually works 24 hours a day.  One tool, putting a price on carbon through cap and trade, creates incentives for companies to reduce emissions.  This stimulates innovation, creates a marketplace around low carbon solutions and provides a pathway for developing countries to grow in a way that minimizes environmental harm.

In other words, the goal is to “de-couple” economic development and environmental damage.  Leveraging the innovation from industrial countries would allow developing nations to enjoy modern conveniences and build out their energy, transportation and construction sectors in a cleaner way than developed countries have historically achieved.

Home Sweet Home

Having returned home to San Diego, it’s easy to sink back into the daily routines of going to work, running errands and living life.  San Diego may not be currently feeling the affects of climate change, however, the indulgence of inaction is no longer affordable.  If there’s anything I’ve learned from my experience at COP15, it’s that the world is interconnected on many levels and our actions (or inactions) can have global consequences.

Interacting with delegates from nearly 200 countries from around the world has highlighted the importance of recognizing common goals.  However, achieving these goals will require a delicate balance of policy and fiscal responsibility in the months and years ahead.  The challenges are great, but we’re a great nation.  With sensible, business-focused objectives, we can protect the planet and the pocketbook.

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the U.S. Green Building Council – San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology. He was recently in Copenhagen attending the COP15 conference. You can reach him at 858-350-4215 or lbarken@hwcpa.com.

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As we begin the final day of the Conference of Parties (Cop15) climate change conference in Copenhagen, Denmark, the grueling hours and stressful conditions are surely taking their toll on official delegates. It is, however, extremely impressive to see how tactful and diplomatic the country representatives are, even when speaking with observers and civil society participants.

After one particularly late night at the Bella Center, home of Cop15, I waited at the Metro station at 1:30 a.m. in the snow and freezing temperatures and happened to engage in conversation with a negotiator from Bolivia.

The position of Bolivia and others in the region is that the atmosphere is polluted with emissions lingering from the dawn of the industrial era. In other words, developed countries spewed all these gasses into the air and now the developing world is suffering the consequences. This is sometimes called the “equity” or “fairness” argument. What is our responsibility to pay for the “sins of the past”?

I suggested to my new Bolivian friend that the Carbon Debt argument reminded me a little bit of the cigarette lawsuits. Sure, we all know now about the dangers of cigarettes and the link between smoking and cancer. However, the demands for reparations only made sense when it could be demonstrated that cigarette companies intentionally and knowingly caused this harm.

Did he really believe that we’ve been polluting for the last 200 years knowing that undeveloped countries would later suffer? He conceded that while we may not have known 200 years ago, we should have known in the last 20 years about the effects of carbon emissions.

Still, the 500 gigatons or so of carbon that he claims is floating around in the atmosphere certainly didn’t all appear in the last two decades. In addition, since CO2 molecules don’t have country of origin labels attached, it will be very difficult to assign responsibility.

Coming to Copenhagen has been a remarkable experience. Although metro station exchanges at 1:30 a.m. may not change the world, my hat’s off to the organizers for creating this two-week conference where conversations can take place between participants from over 190 countries. Interactions with other delegates have been extremely positive and provide hope that constructive dialogue can lead to meaningful progress.

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the U.S. Green Building Council – San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology. He is currently in Copenhagen attending the COP-15 conference. You can reach him at 858-350-4215 or lbarken@hwcpa.com.

With the gathering of more than 130 world leaders in Copenhagen this week, the issue of greenhouse gas (GHG) emissions is taking center stage.  GHG has become the burden that no one country can unilaterally cure, but every person on the planet has a vested interest in addressing.

Cap and trade, along with other policy measures, have stirred a great deal of controversy–as they should.  Decisions to significantly alter the fabric of commerce and daily life should not be taken lightly.  Rigorous debate is essential and should be welcomed.

However, even the most ardent climate skeptic acknowledges that finite resources such as oil and other fossil fuels won’t last forever.  As such, the debate seems to be evolving into a question of when and not if.  In other words, is this a problem that needs to be tackled in the next five years?  Or, do we have 100 years to figure it out?

Bold Action

The lengthy negotiating sessions in Copenhagen demonstrate that the task of reducing carbon emissions is easier said than done.  Two things are certain: It won’t be cheap and it won’t be easy.

Beyond the politics and rhetoric of “saving the planet,” a larger question is emerging.  How do we take something that is free and start charging for it?  This debate is really about putting a price on carbon emissions and ending the free ride of pollution.

Carbon Emancipation

This wouldn’t be the first time that the world has done something to take a “free” resource and associate a price with it.  In the United States, this happened when we ended slavery.  At one point in our country’s history, paying slaves for their labor was considered a radical idea.  However, in 1862, President Abraham Lincoln signed the Emancipation Proclamation and declared that “all persons held as slaves are, and henceforth shall be free.”

The decision to free slaves was a monumental step forward for human rights.  In addition, it changed the underlying economic dynamics.  The emancipation proclamation associated a price with something that used to be free.

Of course, this move did not come without resistance or conflict.  Opponents to freeing the slaves were even more confrontational then the current group of climate skeptics.  In fact, it led to a civil war.  Thankfully, the climate debate has more peaceful participants.

Economic Disruptions

Without question, freeing slaves caused an economic shockwave.  The inevitable financial burdens may have even led to the closure of some plantations.  However, the economic adjustment eventually normalized under a new model where all people were paid for their labor and the practice of slavery ended.

Can you imagine having to pay for your own pollution?  I know…it will be hard.  I’m sure it was also hard for the slave owners to clean their own houses and do their own laundry, at first.  However, ending slavery was the right thing to do.  Sure, it may have taken some getting used to for the slave owners and it will take some getting used to for us carbon emitters.

The good news is that over time, not only will we adapt to these changes, but we can expect them to create a fertile environment for innovation.  In the post slavery era, new incentives were created because the true cost of labor became properly allocated.  New products and technologies were invented that made us less dependent on back breaking manual labor.  Many of these inventions came in the form of agriculture automation and household tools, both of which made life more efficient and convenient.

To put it another way, if the marginal cost of labor is zero, then there is no incentive to be efficient or use it wisely.  Natural resources are no different.

Are Climate Skeptics Modern Day Slave Owners?

Nearly 150 years ago, slave owners believed that they could abuse human beings and cloaked themselves in a variety of arguments to justify their actions.  Some even misquoted the bible to support their racist views.  Other took a blind eye and said “That’s just the way it is.”  It could also be suggested that some found it difficult to acknowledge the fundamental inequities of slavery because they feared the financial consequences to their plantations and businesses.

Today, climate skeptics believe that we can continue to abuse our planet without regard to the consequences.  Not surprisingly, this view is particularly popular among those individuals and corporations that have the most to lose in a world where the true cost is allocated to carbon emissions.

In this regard, it’s important not to label climate skeptics as evil or ignorant.  Rather, we should acknowledge that climate change legislation will involve some short term sacrifice for everybody.  However, in the long run, the effects of cap and trade will be normalized in much the same way that our labor markets now function just fine without slavery.

Ethics and Ethos

In looking back, it’s clear that taking a stand for human liberty was the right thing to do.  We are proud of our history and the actions taken by our leaders nearly 150 year ago.  Hopefully we can say the same thing about today’s leaders when future generations look back at what we did in Copenhagen and successive climate summits.

Will they think we were barbaric in the way we treated our environment, in much the same way our modern society views the barbaric treatment of slaves?  How would you have reacted to a slave owner if they claimed that they could not “afford” to free the slaves and pay people a fair wage for their labor?

While the climate debate rages on, let’s consider not only the environmental conditions we leave for our future generations, but also the moral compass we leave as our legacy.  Freedom isn’t free.  Neither is carbon.  Ending free carbon emissions, like ending slavery is a legacy that we can all be proud of.

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the U.S. Green Building Council – San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology. He is currently in Copenhagen attending the COP-15 conference. You can reach him at 858-350-4215 or lbarken@hwcpa.com.

The COP15 corridor dance: A yellow badge-wearer chats up a pink badge-wearer.

By Lee Barken, IT practice leader at Haskell & White, LLP

Wish you were here? Allow me to draw a picture.

We’re now well into week two of the COP-15 Climate Summit in Copenhagen and the diplomats, activists and media representatives are fully engulfed in a whirlwind of activity.  Beyond the maze of the Bella Center’s million square feet, 60 meeting rooms and winding pathways lies another maze comprised of diplomatic maneuvering, backroom gamesmanship and good old-fashioned guerrilla marketing.  Knowing where to go and what to do depends mostly on who you are and why you are here.

In a nutshell, COP-15 is an oversized bundle of energy that can best be described as “organized chaos.”  It’s helpful if you think of it as two different conferences wrapped up in one.  The first conference is for the people who make decisions.  The other is for people who are trying to influence the people who are making the decisions.

What Color Is Your Parachute?

The first strategy to understand at COP-15 is the game of name badge color-coding.  Yellow badges belong to members of non-governmental organizations (NGOs), such as a non-profit forestry alliance, a youth organization or some other kind of other advocacy group. These folks number in the thousands—22,000 have registered. They spend each day running around the halls trying to make sure their presence is felt and their message is heard.  An entire pavilion is dedicated to NGOs who each have their own booth and literature which they distribute.  On the outer perimeter of the NGO pavilion is a series of large conference rooms where these groups give presentations that are open to anyone and everyone who will listen.

The NGOs have come to Copenhagen with a wide range of group sizes and political savvy.  Some are small and disorganized.  However, others are coordinated, hold twice daily status meetings and mobilize hundreds of people who roam the halls in matching T-Shirts and marketing literature.  As you might imagine, many of the participants at the foot-soldier level are college age or younger.

Pink badges are issued to those within a “party to an agreement”, a.k.a. an official country delegation. Pink badge-holders are in a separate wing, holding dozens of simultaneous meetings in various meeting rooms.  Some rooms are small and hold a few dozen, while other rooms are enormous, holding several hundred.

Most rooms are equipped with individual “push to talk” microphones at each station.  The pink badges hold closed meetings that are only open to other pink badges. Sometimes there are subgroup closed meetings that are only open to certain groups of pink badges.  For example, closed meetings are held by “AOSIS,” the Alliance of Small Island States” and the “G77 + China.”  These are essentially lobbying groups that have figured out that they will have more impact as a team and then band together to improve their chances of moving forward a shared agenda.  This is also known as strength in numbers.

Finally, members of the media are issued an orange pass.  COP-15 closed the press registration when it hit 5,000 people and it is rumored that a wait list includes another 10,000 who would like to run around with an orange badge.  Press organizations from around the world have converged on the scene to report news and provide updates to their readers and viewers.

All the World’s a Stage…

Here’s how the COP-15 dynamic works: Pink badges try to get work done, move their agendas forward and lobby each other for changes to document language.  Orange badges try to find something interesting or salacious to report on.  Yellow badges run around trying to get attention from both groups.

In one particularly enlightening conversation with a college-age NGO volunteer, I learned that her goal was to intercept pink badges walking around the Bella Center, sitting for lunch or just waiting in a line and then present them with a pamphlet and share the story of the NGO.

Other yellow badges are focused on media attention and utilize every opportunity to descend upon the orange badges with a story pitch or other promotional activity.  A popular strategy is for yellow badges to position themselves directly outside the press room (which they are not allowed to enter) and try to catch media folks entering or exiting.

In the connecting corridor between the NGO pavilion and the Publication Distribution Center (the first place you go each morning to pick up your copy of the “Daily Programme”) is an area designated specifically for publicity stunts.  Listed simply in the Daily Programme under “Other Events,” the NGOs schedule mini-presentations where they stage skits with dramatic flair.

These productions always draw a crowd of curious onlookers who take photographs with their mobile phones and camcorders.  As you can imagine, they are usually quite entertaining and include elaborate, costumes, props and antics such as a team of performers dressed up as doctors trying to save 10 foot half-inflated earth.  One person shouts “Clear,” while charging up the defibrillator paddles and attaching them to the limp planet.  Another person holds up a sign advocating a particular climate change strategy.

A large number of yellow badges think they’re on some kind of altruistic Disneyland vacation.  It’s like spring break for people trying to save the planet.  While you may question their effectiveness, you have to admire their passion.

On the other end of the spectrum, the tactics of the more politically sophisticated NGOs are impressive.  Many are well connected and can frequently be seen in conversation with pink badges and reviewing or marking up pages of texts.

Center of Attention

All of this hyper-attention seeking is a major cause of the chaos.  Imagine a sprawling convention center with 15,000 people all running around shouting “Look at me!”  Is all of this advocacy work really improving or hindering the process?  Is it working?  On a bus ride at the end of a long day of activities, I happened to sit next to a member of the UN support staff (blue badges) who was serving as an interpreter.  I asked him if these NGOs were making any difference.  After all, if the pink badges are top notch attorneys and skilled negotiators, did he really think that some college kid waving a flyer around was really going to change anybody’s position?

His response surprised me.  While most advanced countries are sending top notch negotiators, there are some less wealthy countries in attendance that simply lack the resources and talent to mount a strong policy agenda.  Some of these countries have populations of 10,000 or fewer people, so you have to imagine that their “best of the best” pole vaulter, chess player or climate change negotiator may feel like a small fish in a big pond.

At the end of the day, it’s hard to say if the activities of the NGOs are having an impact.  While some smaller countries may be influenced, it’s unlikely that the negotiating positions of the large industrial countries are being shaped by sideshow antics.

On the other hand, since there are so many reputable media outlets in one location, it’s an alluring opportunity to reach the masses and get your message “out there.”  The issue is that so many people are competing for attention from the orange badges that you end up with a high noise ratio and breaking through the clutter becomes a real challenge.

False Alarms

The other problem, as observed during the first few days of the conference, is that not having something newsworthy to write about is a recipe for disaster.  On a slow news day, writers and producers get tense and trigger happy.  On day 3, the news was flowing about details of a “secret agreement” circulating called the Danish Text.  This “closed door agreement” included terms very unfavorable to less wealthy countries and a suggestion to link the process more closely with the world bank and break away from the United Nations.

As it turned out, the story was a non-story as the text was one of many drafts that had been made public over a week ago.  There were no secret meetings and nothing new in the text that hadn’t already been disclosed.  Reports of a “leak” were overblown and suggest that with nothing sensational to report, the risk of misinformation wildfires will always go up a couple notches.

Closed Meetings and Open Content

It’s interesting to note that although the yellow badges cannot attend the pink badge or orange badge closed meetings, many of those sessions are webcast and archived.  You have to wonder why these meeting are closed if the content is later made public and open to the world?  I can only imagine what kind of disruptive “episode” occurred in the past that resulted in the decision to exclude yellow badges from negotiating sessions and press conferences.

In addition, as the conference begins to wind down, the number of yellow badges will be restricted.  On Tuesday of the 2nd week, yellow badge allowances were cut in half.  On Thursday, only 1,000 will be allowed.  By Friday, that number will drop to 90.

World Leaders Arrive

Starting Tuesday evening, world leaders will begin arriving in Copenhagen.  Of the nearly 200 participating countries, over 130 have their heads of state in attendance.  While the news from Copenhagen has been largely disappointing, one has to wonder if the arrival of world leaders will have a positive influence on the momentum of the climate talks.

After all, world leaders like to be associated with successes.  Coming to Copenhagen and being branded with a failure will not play well on the world stage. As the number of dignitaries in the Bella Center slowly increases, the hopes are high and the stakes are higher.

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the U.S. Green Building Council – San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology.  He is currently in Copenhagen attending the COP-15 conference.  You can reach him at 858-350-4215 or lbarken@hwcpa.com

A royal panel (left to right): Royal Prince Haakon of Norway, Crown Princess Victoria of Sweden, Crown Prince Frederik of Denmark

Up the road from the COP15 Climate Conference and just outside of downtown Copenhagen, 170 exhibitors gathered this weekend for the 2-day Bright Green conference, to demonstrate that climate change is both a dangerous peril and a pathway to profits. Bright Green, a showcase organized by the Confederation of Danish Industry, aims to show that the emission reductions currently being negotiated at COP15 will require a myriad of new industry solutions.

Judging by the turnout, it would appear that industry is more then ready to step up to the challenge and that the 10,000 attendees were not deterred by silent protest messages, such as “our climate is not your business” and “greenwashing,”, etched in chalk on adjacent sidewalks and walls leading to the Copenhagen Forum Center.

Inside the building, a maze of trade show booths greeted the curious and energetic crowd.  The eclectic mix of exhibitors included alternative energy companies, consultants, solution providers, product manufacturers and trade delegations from countries such as Canada, Finland, Denmark, France and the United States.

To kick off the conference, a keynote presentation was delivered by a trio of royalty.  The Crown Princes of Denmark and Norway, along with the Princess of Sweden all shared their thoughts on the changing climate and provided a recap of their experiences on a recent polar expedition. Sarah Palin may look out her window to Russia, but these three royals look out their windows to an ever-changing arctic.  “All three countries border arctic regions,” said Crown Prince Frederik of Denmark, adding “We’re all very concerned.”

The good news is that more people now seem to be engaged in the discussion “My father has been talking about this for 30 years.  At first he was lonely.  Now he feels that nobody is listening to him because everybody is already talking about it,” remarked Crown Princess Victoria of Sweden.

Royal Prince Haakon of Norway seemed particularly concerned about the linkages between climate change and the plight of the poor.  “We need a stable climate to tackle poverty.  We are connected as a human family.  We’re all in this together,” said Prince Haakon, who in 2008, along with Crown Princess Victoria of Sweden and Crown Prince Frederik of Denmark, toured regions of the arctic were ice has significantly retreated.

As an American, I’ve never fully understood the allure of royalty.  Nevertheless, the crowd seemed particularly pleased with the comments from the well-spoken young leaders.

Following their remarks was a presentation from Danish Prime Minister Lars Lokke Rasmussen, who added a sense of urgency to the conversation.  “Make no mistake.  Climate change is a reality.  It is taking place everywhere.  The challenge before us is clear,” said Rasmussen.

The delight of the afternoon, however, was an impassioned speech from renown inventor, Dean Kaman.  Following a biographical sketch of his career, including insulin pumps, prosthetic arms and other medical devices, Kaman covered some of his “green” inventions, including a device that cleans drinking water, along with a matching solar power device.  The products are designed to deploy quickly and easily in developing countries that lack access to safe drinking water.  According to Dean, the technology is there, the only thing missing is the political will.  Said Kaman, “I’ve invested 10 years and $50 million dollars.  It’s ready to go.” 

Graffiti protests may have covered the walls around the Copenhagen Forum Center, but it didn’t seem to put a damper on any of the activities inside.  The business community sees a clear path ahead.  It’s bright and green. 

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the U.S. Green Building Council – San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology.  He is currently in Copenhagen attending the COP-15 conference.  You can reach him at 858-350-4215 or lbarken@hwcpa.com.

 By Lee Barken, IT practice leader at Haskell & White, LLP

Who says money doesn’t grow on trees? At the third-annual Forest Day event, held during the Cop15 Climate Summit in Copenhagen, attendees were a buzz about going green and making green, all with a new forestry protocol called REDD.

Short for “Reducing Emissions from Deforestation and Degradation,” REDD aims to make a tree worth more standing up then cut down. It accomplishes this by monetizing the carbon sequestration benefits of trees in the form of carbon credits. Or, to put it another way: REDD is a mechanism to grow money on trees.

In contrast to the many monotonous sessions that characterize COP-15, the Forest Day 3 conference kicked off with a mini concert from the Mermaid orchestra, a six-piece classical group who performed Ave Maria and other melodies (see picture above). With music in the air, and the prospect of REDD being adopted and formalized in the Cop15 process, conference attendees had good reason to be optimistic.

Putting a Price on Carbon

Given that many believe a cap and trade system is eminent, REDD offers opportunities to create inexpensive carbon credits that can be sold to companies who exceed their emissions allowances. This potential doesn’t come without some concerns. In her welcoming remarks, Frances Seymour, Director General for the Center for International Forestry Research (CIFOR) encouraged the audience to think bigger then carbon. “We need to look at forests as more then just carbon storage and talk about biodiversity retention, indigenous people’s rights and other issues,” said Seymour.

In addition, most in attendance seemed to acknowledge the real sense of urgency presented by climate change issues. “These are the most critical negotiations we have seen in decades. Cop15 has the attention of the world and forestry is at the center of the negotiations,” said Troels Lund Poulsen, Minister for the Environment of Denmark.

“Forests can and must play a major role in solving our climate crisis.” said former President Bill Clinton in a video-taped message. “Through REDD, forests can provide an income stream for forest rich countries,” he added.

The topic of enrichment was a popular theme during several presentations. “REDD is a mechanism for transferring funds from developed to developing nations. Therefore, transparency and safeguards are clearly needed,” said Gro Harlem Brundtland, United Nations Special Envoy on Climate Change.

With all of this talk about transferring wealth, one might wonder why rich nations should be paying developing countries not to chop down their rain forests. Aside from the scientific arguments (trees absorb the carbon from our CO2 pollution), as well as the equity arguments (rich countries should take responsibility for cleaning up the mess they created), there is one other perspective worth considering. What if REDD represents an opportunity to reconsider the mechanism we use to place value on natural resources?

The Value of Nature

In our current model, we place value on the things we extract from nature. If you harvest a tree, or pump a barrel of oil out of the ground, you can sell those commodities and use them in an industrial process. With cap and trade, a price is established for carbon emissions. Free pollution is no longer free. As a result, value is created when carbon is removed from the environment.

In the case of a forest, it could be suggested that the countries that are lucky enough to have inhabited environments rich in forest resources should just give this commodity away to the world. Of course, this position makes about as much sense as saying that OPEC countries should just “give away” their natural resources. While oil takes significant investment and effort to extract from the ground, it should be noted that forest management also requires significant effort and capital expenditures.

In the U.S., it might be possible to rope off the forest and attach a simple “do not disturb” sign. However, in many forest rich countries, the danger from illegal foresting is significant. In fact, hiring armed guards to protect the forest is not unheard of in some countries. In addition, the cost of fire protection services needs to be considered.

By placing value on carbon sequestration, we are, in essence, incentivizing a shift from fossil fuels to alternative energy. The question is: Would you rather be shipping your money to forest rich countries or oil rich countries? Which natural resource should we be supporting?

Counting the Carbon

While it might sound great to save trees and reduce our demand on fossil fuels, one of the challenges faced by REDD is in measurement and verification. As consumers, we are more comfortable with the idea of paying for oil (versus paying for carbon sequestration) because it’s something we can easily measure and verify. In other words, we can put it in a barrel or pump a gallon into our cars. A barrel of oil or a gallon of gasoline is something that can be commoditized and sold in an open market.

Until carbon can be measured as easily as oil or gasoline, and carbon claims can be audited and verified with reasonable assurance, it will be difficult for forestry protocols to gain acceptance. Numerous efforts are underway to tackle this problem, ranging from ground based sensors to satellite imagery. However, more work is needed.

Forestry Day 3 in Copenhagen demonstrates the considerable momentum behind forestry conservation. With the right combination of financial incentives and safeguards, it may very well be possible to leverage capital markets to save the rainforest. It just goes to show that the environmental and business communities can hold hands – even while they’re hugging trees.

Lee Barken, CPA, LEED-AP is the IT practice leader at Haskell & White, LLP and serves on the board of directors of CleanTECH San Diego and the U.S. Green Building Council – San Diego chapter. Lee writes and speaks on the topics of carbon accounting, green building, IT audit compliance, enterprise security and wireless LAN technology. He is currently in Copenhagen attending the Cop15 conference. You can reach him at 858-350-4215 or lbarken@hwcpa.com.

Left to Right: Jan Heino, Dr. Rajendra Kumar Pachauri, Gro Harlem Brundtland, Troels Lund Poulsen, Elinor Ostrom

President Bill Clinton

Dr. Rajendra Kumar Pachauri, Chair, IPCC

Gro Harlem Brundtland, UN Special Envoy on Climate Change

Yvo de Boer, Executive Secretary UNFCCC