It's understandable why Latin America has been hesitant to join the race to develop higher profile carbon sequestration technologies, which usually entail capturing carbon dioxide at the point of generation. Those methods frequently focus on emissions from coal-fired generators, which in Latin America take a back seat to hydroelectric dams. And although the region has pushed to develop thermo capacity in recent years, much of that new capacity uses natural gas. As such, there's no real motivation for Latin American governments and generators to develop costly carbon capture technologies at the power plants.

That said, a few such projects are underway. Brazil's Petrobras and its Mexican counterpart Pemex are developing projects that could be used in their refineries. But the cost is largely prohibitive for larger-scale initiatives, while it's hard to guarantee long-term storage of captured carbon dioxide. “These technologies are all commercial: capture is commercial, storage is commercial. The problems are the cost of capturing and the permanence of storing,” said María Reidpath, international project manager at the U.S. Department of Energy's National Energy Technology Laboratory. “That's why you don't see this technology widely deployed.”

Using forestry as a form of carbon sequestration could gain Latin America's attention, since deforestation in the region is a major problem. Brazil, home to most of the lush Amazon rainforest, is the world's third largest source of greenhouse gases. Deforestation and other “land use” issues account for 70 to 90 percent of Brazil’s total emissions, according to Conservation International, an environmental group. And forestry projects can make a major difference, providing up to 25 percent of the emissions reductions needed in coming decades, according to the UN's Intergovernmental Panel on Climate Change.

But financial incentives for forestry projects are insufficient. It is difficult to register a reforestation project as a clean development mechanism, or CDM, under the Kyoto Protocol. Developing documentation for forestry CDMs is a complex process that requires specialists, and as a result has high transaction costs, according to Till Neeff, a principal consultant at Ecosecurities, an international carbon trading firm. And to make matters worse, Kyoto does not recognize projects to conserve existing forests as CDMs. CDM project registration is key to issuing carbon credits that can be used as a revenue source.

Other options for forestry projects exist, considering that a number of smaller parallel markets have sprung up in recent years as global warming becomes more of a concern. “Forestry project developers are particularly interested in these new developments” because of restrictions under Kyoto, according to “Update on Markets for Forestry Offsets,” a report from the Tropical Agricultural Research and Higher Education Center (CATIE).

Forestry conservation is one of several topics on the to-do list for Kyoto negotiators. If they approve forestry as a method for sequestration, that will be good news for Latin America, which boasts the cheap land needed to implement forestry projects on a major scale. When asked why he thought the region initially would lead forestry CDM efforts, Ecosecurities’ Neeff responded, “Latin Americans tend to be quite forward-thinking and pioneering.” It should come as no surprise, then, that according to the CATIE report, Latin America and the Caribbean have the highest projected share of carbon credits from forestry CDMs – 56 percent of the global total. However, that potential greatly depends on the Kyoto negotiations, now scheduled for November and December of 2009.