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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.
But the country would block the use of offsets for forest protection under a new climate treaty, Brazil's representatives told Reuters on Thursday, explaining that would absolve rich countries from cutting their own emissions.
"Brazil has always been against offsets in forestry," said Sergio Serra, Brazil's ambassador for climate change.
That poured cold water on hopes from most other tropical forested countries, seeking money for protecting their forests under a new climate treaty. Advocates include Indonesia, Mexico and India, analysts say.
Brazil supported instead a public funding approach, building for example on a $1 billion pledge from Norway this year to a new Amazon Fund, aimed at improving conservation and the enforcement of laws against deforestation.
A delegate from Equatorial Guinea said the two approaches could be combined. "It should be open both for those who want to raise public money and for those who want to go to the (carbon) market. But it has to have the market aspect," Deogracias Ikaka Nzamio told Reuters.
Some indigenous peoples groups oppose a carbon market approach until their tenure rights are made secure, fearing the lure of billions of dollars may trigger a land grab instead.
"Papua New Guineans depend on the land, the forests provide basic necessities, food, traditional medicines, clean water, ancestral ties, everything for them," said Kenn Mondiai, from Papua New Guniea's Eco-Forestry Forum.
The behavior of logging companies had lowered expectations of benefits from the private sector, he told reporters in Poznan. They were supposed to supply infrastructure in forested areas under the terms of concessions, but had not done so.
"There's no hospitals, the roads are poorly built, the bridges are made from logs, the schools are not in place, we haven't seen any benefits on the ground," Mondiai said.
Additional reporting by Michael Szabo in London, editing by Mark Trevelyan