It amounted to a grand but simple bargain. Fourteen heavily-forested developing countries in Latin America, Asia, and Africa offered to cut their own greenhouse gas emissions across a variety of sectors, in particular by reducing deforestation. But more than that, they offered further emissions cuts if industrialized countries put up the money for it. This was the “Lima Challenge,” laid down last December at the UN climate conference in the Peruvian capital. Now, through our calculations, we have an idea of what it would cost developed countries to respond — and it turns out the Lima Challenge offers an inexpensive step toward cutting emissions and keeping global temperature increases below two degrees Celsius.
For less than $2 billion a year, global emissions could be cut by more than the amount emitted by the United Kingdom each year. And it could all be done through reducing deforestation. Here’s how I arrived at the numbers.
Using high-resolution deforestation  and carbon stock data, I first calculated yearly emissions from deforestation from 2008 to 2012 for all 14 “Lima Challenge” countries (table below). The average emissions per year from all countries was close to one gigaton of CO2 a year which exceeds Germany’s total emissions in 2011.
How much money would developed countries need to provide to bring the “Lima Challenge” to fruition? Well, this depends on a variety of decisions that need to be jointly resolved by forest and industrialized countries. To illustrate how this partnership could play out I make some assumptions. First, I assume a carbon price of $5 per ton of CO2 which is the price of the Amazon Fund, Guyana-Norway agreement, and the FCPF Carbon Fund. In recent years, Brazil reduced its deforestation by some 80 percent, and for illustrative purposes I hypothesize that all forest countries repeat this impressive feat. Lastly, I assume that half of the reductions are financed domestically and the other half are financed in partnership with developed countries, once again an assumption for illustrative purposes.
Under these assumptions, forest countries participating in the “Lima Challenge” would reduce their emissions from deforestation by 772 MT CO2 per year and will continue to do so every year — greater than emissions from either the United Kingdom, France, or Australia. Forest countries would voluntarily commit to cut their greenhouse gas emissions from deforestation by 386 MT CO2, and an equal amount would be reduced by partnering with industrial countries. Developed countries would need to provide at most $1.93 billion a year, as I assume that payments would be results-based and forest countries would only receive funds if they achieve the proposed emissions reductions.
It’s important to note that additional emissions reductions could be available to the global community from other forest countries, such as Indonesia, that have not yet joined the “Lima Challenge.” According to my calculations, forests countries emitted 5.4 gigatons a year from 2008 to 2012—larger than the emissions from the entire European Union in 2011. Think what that could mean for emissions reductions if all these countries joined the Lima Challenge too. Michele de Nevers and I will explore exactly this question in a forthcoming blog.
To ensure that the “Lima Challenge” will become a “Lima Partnership,” industrialized countries should pledge the necessary financial resources by December when the new global climate agreement will be finalized in Paris. This is a challenge that the world can and should rise to meet.
 I aggregated tree-cover loss using Hansen et al. data into 0.05 degree * 0.05 degree grid cells (approximately 5.5 km * 5.5 km at the equator), and calculated yearly deforestation rates for each grid cell. I also calculated emissions factors for deforestation per grid cell based biomass, peat soil, and non-peat soil data, relying on the Harmonized World Soil Database to characterize site-specific soil compositions. To calculate emissions from deforestation per grid cell, I multiplied the hectares of deforestation per year by the total emissions factor. Finally, I calculated emissions per country by aggregating the emissions from all grid cells that are inside a given country.
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