By Victoria Gill
Science reporter, BBC News
Could carbon credits stop the destruction?
The Indonesian rainforest is worth more standing than felled say researchers.
A new analysis has shown that payments to reduce carbon emissions from the forests could generate more income than palm oil production on deforested land.
Protecting the forests could become profitable under a proposed scheme called Reduced Emissions from Deforestation and Degradation (Redd).
In the journal Conservation Letters, they say this scheme will help protect threatened forests.
Profits are driving the destruction of the orangutans' habitat
Palm oil, an ingredient in products including food and soaps, has become an important feedstock for biodiesel.
This has created controversy because in Indonesia and Malaysia, which are its major producers, companies clear and often burn swathes of forest to grow their crops.
These ecologically-rich forests are home to a huge variety of species, including endangered orangutans, and to very carbon-rich peat swamps.
Oscar Venter from the University of Queensland led the study that focused on Kalimantan, in Indonesia - just one forested region where deforestation has stirred environmental concern.
The aim was to find out if protection of the forests could be as profitable as palm oil.
Under Redd, oil palm companies could be called on to protect the forested areas they own, and sell "carbon credits" for the amount of carbon contained in that forest.
"Despite their rich biodiversity, we haven't been able to protect these forests with conservation funds," said Dr Venter. "So we looked at what Redd would be able to do and what that would mean for biodiversity."
He and his team looked at the financial reports of palm oil companies to see how much money they earned from oil production, and from selling timber.
They compared these earnings to the predicted carbon emissions from planned palm oil projects, and calculated that if carbon credits could be sold for $10 (£6) per tonne, conserving the forest could be more profitable than clearing land for oil palm.
"This is the break-even price if oil palm can only be grown in areas that are at least moderately suitable, or if some oil palm can be relocated to already [deforested] areas. Any price over [that] means Redd becomes more profitable than oil palm," explained Dr Venter.
"Carbon markets, while they fluctuate, are where the price of carbon is currently established. So we compared our prices to prices on major global markets, which at the time were selling carbon for around $30 per tonne of CO2."
Redd is a UN-led programme, introduced in 2005, to create a practical financial system to protect the rainforests.
Dr Venter hopes this research will strengthen the case to include it in the of the climate agreement that replaces the Kyoto accord, which is set to be decided upon at a meeting in Copenhagen later this year.
"If Redd does become part of the next international climate agreement, it will have the potential to fund forest protection in areas slated for oil palm conversion," said Dr Venter.
He said the findings showed that it was possible to create "financial incentives to ensure that the world's tropical forests last into the next century, instead of becoming a memory of the past".
Conservation funds have not been sufficient to save rainforests' inhabitants
"Tropical forests are disappearing at an incredible pace - the equivalent of 50 football fields a minute, imperiling biodiversity and creating massive carbon emissions that are degrading our global climate," said William Laurance, a scientist from the Smithsonian Tropical Research Institute in Panama.
But Dr Laurance told BBC News that palm oil production would be "very tough to stop" because it is so profitable.
"At present prices for carbon, we won't be able to stop rainforest destruction for oil palm," he told BBC News.
"Redd will only be competitive for slowing destruction of peat forests, which are jam-packed with carbon and become massive sources of greenhouse gases when cleared.
"But we can pressure the worst companies and fight to protect the highest-priority areas," he told BBC News.
"Redd is probably our best chance to invest billions of dollars into forest conservation, and to help developing nations make a reasonable profit from their forests."