Carbon credits derived from a fledgling forest conservation scheme for developing nations will struggle to compete with palm oil as an investment, industry advisers and conservationists said on Friday.
A UN-backed scheme called reduced emissions from deforestation and degradation (REDD) allows developing countries to raise potentially billions of dollars in carbon credits in exchange for conserving and rehabilitating forests.
However, profits from palm oil plantations could, in some cases, out-compete revenue from selling REDD credits, said Joe Leitmann, the World Bank's environment coordinator for Indonesia.
"The opportunity costs we have to overcome in order for REDD to work can almost all be overcome, except for oil palm grown on mineral soil. That will be so profitable and so difficult to beat," he said, speaking at a forestry conference on the Indonesian island of Bali.
Palm oil is used as a vegetable oil for cooking, in chocolate ...