Carbon trading — privatising the world's forests
Reduction of Emissions from Deforestation and Forest Degradation (REDD) is the name of a World Bank sponsored carbon offset program. The idea is to pay owners of forests in the global South to stop deforestation as a way of reducing carbon emissions.
The scheme generates "credits" for the carbon "saved" in the forests. If the scheme is ratified in December's United Nations climate change conference in Copenhagen, these credits could be legally traded to companies in the developed world to enable them to meet domestic emissions reduction targets.
The scheme has faced widespread criticism for, in effect, privatising forests and allowing rich nations to evade responsibility for cutting emissions themselves. Now, evidence has emerged that the REDD scheme is being manipulated by carbon speculators.
The September 4 Sydney Morning Herald revealed an Australian company, Carbon Planet, has been involved in a $100 million REDD scandal in Papua New Guinea.
Fake carbon certificates were given to landowners to persuade them to sign over the rights to their forests. An investigation has begun and the head of PNG's office of climate change, Theo Yasause, has been removed.
The office of climate change has been accused of issuing at least 39 REDD "credits". Each credit amounts to 1 million tonnes of carbon in up to a dozen forests. However, because REDD is yet to be ratified, no government has the legal right to issue REDD credits.
One of the projects involved the controversial Kumula Doso concession in the Western Province — an area subject to a long-running ownership dispute.
In a July 16 speech to parliament, PNG opposition leader Mekere Morauta said: "Despite the ongoing court case over [Kumula Doso] <193> it seems that Carbon Planet has hooked up with a company called Nupan PNG Ltd, to trade carbon credits in respect of this land — all sanctioned by the Office of Climate Change."
Morauta asked numerous questions about the government's involvement with various international carbon trading or brokerage companies. "Macquarie Bank has been in discussions with the office of climate change, offering to broker carbon trade deals and retain 15% of profits", he said.
"If the voluntary carbon market turns out to be worth billions of dollars in the next couple of years, as predicted by a number of players, the bank's 15% would be very handsome income indeed."
Since then, the PNG government has tried to distance itself from the carbon trading scandal and warned landholders that they should wait until transparent benchmarks for carbon trading are worked out at Copenhagen.
Several trial REDD schemes have proceeded since the UN talks in Bali in December 2007. These "REDD readiness" projects are at various stages of development in more than 25 countries.
Kevin Conrad, Special Envoy and Ambassador for Environment & Climate Change for Papua New Guinea and the executive director of the Coalition for Rainforest Nations, told the June 6 Economist that in many countries "carbon speculators were putting pressure on landowners to sell large tracts of forest ahead of a possible deal" to expand the scheme at Copenhagen.
The Wilderness Society's Tim King told the SMH there had been "a tsunami of carbon traders spreading across PNG. Carbon finance and REDD have triggered a 'gold rush' mentality."
"None of the carbon traders operating in PNG are able to demonstrate that they have an effective methodology to ensure that landowners give free and informed consent to the complicated legal contracts they are being induced to sign", he said.
This underlines that as Copenhagen approaches it is important that environmentalists are clear on what is at stake with this issue and what can be done about it.
The world's forests play an invaluable role storing carbon. Deforestation and unsustainable land use are responsible for 18 to 20% of global greenhouse gas emissions. There is little question that poor countries in our region have a problem with large-scale logging and the burning of forests.
The huge increase in demand from wealthy countries for products like palm oil has further fuelled the destruction. Big companies can make quick money from burning forests and establishing oil palm tree plantations for export.
To be effective, forest protection needs to be coordinated across regions and the globe. Ellen Roberts, a member of the Friends of the Earth (FoE) climate justice collective in Melbourne, spoke to GLW in June.
She said a big problem with REDD is that is did not address the causes of deforestation. "Unless you deal with demands that have been driving the deforestation, then locking up one forest [under REDD] may just mean that another forest gets logged, whether this is in another part of the same county, or a different country."
Control over the forests is another key issue. Indonesian environmental group WALHI, affiliated to FoE International, is opposed to the market-based REDD scheme.
In a March report, "REDD Wrong Path: Pathetic Ecobusiness", WALHI said: "Another concern with linking REDD to markets <193> [is that] at the national and community levels we may see a loss of autonomy over natural resources as third parties gain increasing influence over natural resource decisions.
"Also, as REDD increases the value of forests, governments may be discouraged from conceding customary land rights to Indonesia's indigenous forest-dependent peoples."
The United Nations Declaration on the Rights of Indigenous People gives indigenous peoples the right to self-determination, the right to their land and the right to determine development. The REDD schemes have been accused of ignoring these rights.
In April, Racewire.org's Michelle Chen reported that the Indigenous People's Global Summit on Climate Change, held in Alaska, "highlighted indigenous opposition to conventional carbon trading schemes" and expressed alarm that the infamously anti-environmental World Bank will play a key role in financing and implementing REDD.
Chen quoted from a December 2008 interview with Tom Goldtooth of the Indigenous Environmental Network. "To be involved with a system [REDD] that defines something that we hold sacred … a neo-colonial system that privatises the atmosphere … creates resistance from our heart", he said.
REDD-Monitor.org said that the way forests were defined was crucial to whether REDD helped preserve or destroy forests. Without a definition of forests that distinguishes between forests and industrial tree plantations, REDD would spell disaster.
The definition of forests used in the Kyoto Protocol doesn't differentiate between native forests and plantations. It means a country can convert a natural forest to a plantation, but still claim it is climate-friendly.
This is despite the fact that native forests win hands-down when it comes to carbon storage capacity and biodiversity.
A scheme like REDD could conceivably play a positive role, but only provided the rights of developing countries, indigenous peoples and local communities are respected and the right safeguards and funding mechanisms are used.
However, most countries, including Australia, support a market-driven financing model for REDD. This means that big carbon trading corporations and carbon market speculators have control over REDD initiatives and the schemes are open to the potential for corruption, price crashes and loopholes.
Many NGOs and indigenous groups support an alternative, fund-based mechanism.
For example, Greenpeace has proposed a fund called "Forests for Climate", which could make funds available to protect tropical forests and allow industrialised countries to meet some of their overall emission-reduction targets by helping Third World countries protect forests.
But the whole idea of offsetting emissions overseas is a dangerous distraction from the real task that industrialised countries like Australia need to face: making huge cuts in the amount of carbon emissions.
Climate justice demands that industrialised countries, who are the biggest culprits in causing climate change, must take the greatest responsibility to protect the world's forests — first by addressing their own deforestation problems and second by funding forest preservation projects in developing countries.
Instead of being part of the lobby group for big timber, palm oil and dodgy carbon trading companies, the Australian government needs to lead by example at Copenhagen. It should put money on the table for a forest protection fund and demand a framework that really protects the world's intact native forests.
Last year, the rich countries spent trillions of dollars bailing out the failed financial system, but they cried poor when it came to action on climate change. We have to save the planet and failure is not an option. We can't leave this job up to the market.