Editor's Note: Marc Gunther also conducted a podcast interview with Jeff Horowitz, the co-founder of Avoided Deforestation Partners. You can listen to their conversation on GreenBiz.com: "Growing Money on Trees"] 

The Sierra Club and American Electric Power, the nation's largest coal-burning utility, don't agree on much, but there is this:

Money does grow on trees.

Along with other big environmental groups and such businesses as Duke Energy and El Paso Corp., they are part of a coalition that wants to use markets to protect the world's forests and curb climate change.

The coalition -- called Avoided Deforestation Partners, a name that will never win a branding contest -- is the brainchild of Jeff Horowitz, a 58-year-old architect and newcomer to the environmental movement who has quietly become an influential player as climate change legislation inches its way through a divided Congress.
Protecting forests "is our single most important strategy, with respect to solving the climate crisis," Horowitz says. "If we don't tackle forestry immediately, we can't buy enough time to get at the technological advances we need and scale them."

I met Jeff in December at the UN climate talks in Copenhagen, and visited him last week at his office in a lovely, hilly neighborhood of Berkeley. A mechanism to protect forests by steering millions of dollars from the developed world to poor countries, known as REDD (Reducing Emissions from Deforestation and Forest Degradation), was endorsed by governments in Copenhagen, so Horowitz felt good about the climate talks. "As far as we're concerned, Copenhagen was a tremendous victory," he told me.

Now he wants to make sure that forestry offsets are part of a U.S. climate bill. That will enable regulated polluters in the U.S. to offset their carbon emissions by paying to protect forests elsewhere. Protecting forests is a cheaper and quicker way to curb emissions than by switching from coal or natural gas to low-carbon energy sources like nuclear, wind or solar power.

While offsets are controversial, no one doubts is that protecting forests matters: Scientists estimate that nearly 20 percent of the world's greenhouse gas emissions come from deforestation, as trees are slashed and burned to make way for agriculture. Standing forests also act as carbon sinks by absorbing CO2. Environmentalists and governments from Norway to Brazil have for decades tried to stop deforestation, but they  have made limited headway.

Neither afforestation (planting trees) nor avoided deforestation (stopping trees from getting cut down) were part of the Kyoto climate agreement, largely because of opposition from enviros. They argued that forest protection could not be reliably monitored and verified and that offsets would allow polluters to avoid mending their ways.

Critics of forestry offsets worry about arcane concepts known as "leakage" (paying to save one forest only to have another one nearby cut down) and "additionality" (how do you know the forests would not have been saved anyway?). They're right that if mismanaged, offsets could do more harm than good.

Brent Blackwelder, president of Friends of the Earth, which released a 28-page report attacking offsets last fall, said: "Offsetting does not lead to promised additional emissions cuts in developing countries while it delays essential structural change in the U.S. economy."