BRUSSELS (Reuters) - Europe’s environment chief suggested using some of the cash generated by the EU’s landmark emissions trading scheme to tackle the loss of forests, home to half the world’s known species and a third of its land area.

Speaking at a news conference on Friday, EU Environment Commissioner Stavros Dimas said he wanted to reduce gross tropical deforestation by at least 50 percent by 2020 and halt global forest cover loss by 2030 at the latest.

“We are not going to have effective tackling of global warming if we do not take care of this type of activity,” he said. “Without stopping deforestation, the biodiversity loss will continue ... in 10 square kilometers’ of tropical rainforest, there are more species than in the entire EU.”

Deforestation is responsible for almost 20 percent of global greenhouse gas emissions and has become a key issue in the international negotiations currently under way on a new U.N. climate change agreement for the post-2012 period.

Forests are currently disappearing at a rate of about 13 million hectares per year, about the size of Greece.

At the U.N. negotiations, Dimas said, the European Commission wanted to work toward setting up a Global Forest Carbon Mechanism (GFCM), where developing countries would be rewarded for their emissions cuts achieved by actions taken to reduce deforestation.

But that would need a serious amount of funding, which could come from the proceeds of auctioning carbon permits to businesses participating in the EU’s emissions trading scheme.

If 5 percent of this revenue were made available to the GFCM, this could raise up to 2.5 billion euros in 2020, he said.

The Commission also wants to test whether “deforestation credits,” meaning carbon offsets generated from avoiding deforestation, could be used to help governments reach their post-2012 emission reduction targets.

But this would be done under a pilot phase, and such offsets would not be available for sale to businesses involved in the EU emissions trading scheme before 2020.

Friday’s proposals also encouraged the use of labeling schemes to help curb the import into Europe of illegally harvested timber. Green groups said those plans lacked teeth.

“The Commission’s proposal for this law will not help European consumers know if the flat-pack wardrobe they bought last Saturday is the result of forest crime,” said Sebastien Risso, Greenpeace EU forest policy director.