Rich, poor in dispute over rainforest cash

By Gerard Wynn and Gabriela Baczynska

POZNAN, Poland (Reuters) - Brazil ruled out on Thursday letting rich countries offset their greenhouse gas emissions by helping to save the Amazon rain forest, an idea under active discussion by the European Union.

Indigenous peoples attending United Nations-led climate talks in Poznan protested that they had no chance of seeing such carbon cash, and appealed instead for money first to root out corruption and cement their land rights.

The global carbon market works by putting a cap on greenhouse gases in rich countries. They can exceed these targets, but only if they pay for corresponding emissions cuts in the developing world, in a system called carbon offsetting.

EU member states debated on Thursday widening that scheme to allow "forest offsetting" -- letting countries and companies compensate for excess carbon emissions by funding tropical forest conservation.

"The EU is discussing this right now," said Brice Lalonde, representing France, holder of the EU Presidency, in December 1-12 talks in Poland, meant to push for agreement on a new climate treaty by the end of next year to replace the Kyoto Protocol.

A French draft paper seen by Reuters on Wednesday suggested the bloc could allow forest offsetting as an way to help some companies meet carbon obligations more cheaply during a recession. That would mark a reversal of proposals by the EU's executive Commission in October.

Worldwide, an area of forest greater than the size of Greece is lost every year, contributing to about a fifth of the global greenhouse gas emissions blamed for global warming.

Last week Brazil said the rate of Amazon deforestation increased in the year to July for the first time in four years.