Climate-change negotiators in Copenhagen would be wise to pay attention to some of the challenges highlighted by early experiments using market mechanisms to avoid deforestation, writes Tan Copsey.
An agreement to curb deforestation is expected to be one of the major outcomes of this year’s global climate-change negotiations in Copenhagen. There is an extensive, often theoretical, debate about the merits of using market mechanisms to slow deforestation. But ahead of the negotiations in December, practical problems with projects aimed at curbing deforestation in Papua New Guinea, Guyana, Panama and Uganda point to a rocky road ahead for REDD (Reducing Emissions from Deforestation and Forest Degradation).
If REDD is to work anywhere, it needs to work in Papua New Guinea. The country has the world’s third-largest area of rain forest, which is being chopped down at an alarming rate. Papua New Guinea’s special envoy for environment and climate change, Kevin Conrad -- who also heads the Coalition for Rainforest Nations -- helped place deforestation at the heart of global climate negotiations. But ahead of Copenhagen, he described how “carbon cowboys” have descended on Papua New Guinea and “tried to sign up voluntary deals with our landowning people using misinformation”.
Papua New Guinea, Conrad said, is trying to prepare for REDD, “but it is not easy in a third world country”. In early July, Theo Yasause, the director of Papua New Guinea’s Office of Climate Change and Environmental Sustainability (OCCES), was suspended pending an investigation, after reports that he had issued illegal carbon credits. Although a voluntary market in carbon credits from avoided deforestation exists, national governments cannot issue credits.
A number of foreign carbon-trading companies have been implicated in the illegal credits scandal. Dave Sag, founder of Carbon Planet, an Australian company that operates in Papua New Guinea, flatly denies allegations that his own company might have received illegal carbon credits and argues that such credits would be impossible to sell. “If ultimately the end-buyer does a bit of due diligence and realises that these supposed REDD credits haven’t been properly registered or that there has been some black money which has changed hands somewhere, they’re not going to do it,” Sag said. “And if they did find out two years down the track that they’d been duped, they’d sue everyone.”
He went on to describe the array of challenges his company negotiated while trying to make money from REDD in Papua New Guinea. “We have invested $1.2 million [Australian dollars, or nearly US$1 million] in Papua New Guinea,” Sag said, “but we haven’t given it to the government. We’ve spent money on everything from plane fares to taxis to local translators to consultants to illustrators. Right now, we also employ a lot of very hard-core scientists who go out into the jungle. These are not armchair scientists; these are real people doing real work, and it is expensive and it is complicated.” Sag is determined to press ahead with REDD, and he believes that the positive benefits associated with preserving a rain forest justify the challenge. “I can’t overemphasise the complexity of REDD projects,” he added. “They really are difficult, but the outcomes are huge.”
Papua New Guinea is not the only country rushing to be ready for an agreement on REDD. In late June, the World Bank Forest Carbon Partnership Facility gave the go-ahead to projects in Guyana and Panama. To obtain REDD funding under World Bank rules, a country must develop strategies to reduce deforestation, a system for monitoring, reporting and verifying emissions reductions, and a reference scenario that accounts for historic and projected future deforestation rates.
The bank’s own technical advisory panel expressed concerns about “significant weaknesses” in the plans of Guyana and Panama and suggested that “analysis of the drivers of deforestation was incomplete and poorly aligned with their proposed strategies”. The Bank Information Center reported that the plans were allowed to proceed in part because of political pressure to demonstrate “real on-the-ground advances ahead of Copenhagen”.
Concerns also have been raised about the level to which indigenous people have been involved in the process. At a recent conference on forests, governance and climate change, Marcus Colchester of the Forest Peoples Programme detailed how Amerindians indigenous to Guyana had been marginalised from the REDD planning process.
Christian Dannecker, a forestry expert with South Pole Carbon Asset Management, has worked on avoided deforestation projects in both Papua New Guinea and across Latin America. He expressed concern about “very low levels of information about how the carbon market works” in some developing countries. Many people, he said, “think that this has something to do with oxygen production and not CO2 capture, and that you can be paid for a forest, somewhere in the woods, that is not threatened. So I get lots of proposals for REDD projects that consist of actively doing nothing.”
REDD projects, Dannecker says, are often difficult, time consuming and hard to explain to local people. From a commercial perspective, this means “you have to make sure that you pick good projects to get involved in, especially if you invest your own money”.
More seriously, poorly designed or rushed REDD schemes could devastate and destabilise developing countries. Chris Lang of REDD-Monitor described his own experience investigating a voluntary project set-up by a Dutch organisation called the FACE Foundation, at Mount Elgon in Uganda. Despite apparently good intentions, disputes over land rights meant that instead of reducing emissions, investment in reforestation and avoiding deforestation exacerbated an existing conflict and led to violence.
“There was a major conflict going on that simply wasn’t apparent from the information that the companies involved were giving out,” Lang said. “When I got there, villagers told me that forest rangers were going around shooting at them. One of the villagers showed me a handful of bullet shells. Shortly after I was there, the villagers cut down half a million trees because the trees had been planted on what they considered to be their land. Due diligence in this case had a lot more to do with denial than actually looking at the reality of what was happening on the ground.”
Lang is sceptical about the benefits of REDD and believes that the most obvious way of minimising these sort of mistakes is to “prevent trade in forest carbon” outright. But he notes that “if we’re going to stop deforestation, we have to do it quite quickly”.
Negotiators finalising a deal on REDD in Copenhagen would be wise to pay attention to some of the challenges highlighted by these early experiments using markets to avoid deforestation. If there is an international agreement to proceed with markets (as seems likely), a cautious, scientifically rigorous, approach is called for, with funding for public-information campaigns, thorough on-the-ground monitoring and clear guidelines on indigenous people’s rights.
Otherwise, further misunderstandings, fraud and even violent conflict could seriously undermine trust between the developed and developing world. Beyond this, there are other serious unanswered questions about REDD. Will the programme actually slow deforestation or will loggers just move to areas not covered by the scheme? Will REDD credits flood carbon markets and drive down prices? To what extent can large emitting nations be allowed to use credits as a substitute for internal efforts to reduce emissions?
It is also clear that simply throwing money at deforestation will not solve the problem. There is an obvious need for capacity building in developing countries. Kevin Conrad suggests that “only once we set up an infrastructure that can accept markets can you bring in market forces -- and when you do that it is clear that unless the money goes to those people who are causing deforestation or have the ability to stop deforestation, it will fail”.
But he also cautioned that “Papua New Guinea is the first of many upcoming instances” of irregularities associated with REDD and that “whenever there is prospective of oncoming wealth, there is a tendency for the small to become overrun by the strong”.
Tan Copsey is development manager of chinadialogue
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