Carbon trading in Africa: Who will benefit? | by Wally Menne

by Feb 14, 2012Magazine

History is littered with the fallout from failed financial schemes that have resulted in massive losses for ordinary people and private institutions, whose investments were plundered by unscrupulous consultants and bankers. Such economic crimes have commonly been resolved through injections of public money, or extended credit – as in the recent cases of the US and the EU, where state funds have been used to rescue affected financial institutions and struggling governments. With carbon markets, there has been similar behaviour that has enriched so-called carbon cowboys at the expense of state-funded bodies responsible for the administration of carbon trading deals. How carbon trading works (in theory)
Carbon trading aims to offset industrial greenhouse gas emissions through cheaper emissions reductions, usually in another country. Offsets provide a way of avoiding making emissions reductions at source (the place where the emissions are produced); for example, if Factory A is required to reduce its carbon pollution but finds it too expensive or inconvenient to do so, it may continue to pollute, or even increase its pollution, and instead pay Community B to reduce its emissions through a range of activities, including energy efficiency, planting trees as a carbon sink, or investing in emissions-reducing technologies. The Clean Development Mechanism (CDM) allows countries that have made emission reduction commitments under the Kyoto Protocol to offset their emissions through ‘emission reduction’ projects in developing countries. This generates carbon credits which can be traded on the carbon markets. Under the Voluntary Carbon Standard (VCS), less valuable carbon credits can be produced, and another offset method planned is in the form of Reduced Emissions from Deforestation and forest Degradation (REDD). Offset projects are supposed to reduce emissions, while benefiting local communities through ‘sustainable development’.

How it works (in reality)
Carbon trading transfers responsibility for climate change to poor communities in developing countries. The carbon credit price is unpredictable, and the costs of setting up and managing the projects are high. In practice it is the foreign consultants, financial institutions and dirty industries in already wealthy countries that derive the financial benefit, and instead the communities whose resources have been commandeered for these projects are left with vague promises of future payments. The technology that is transferred is also often old technology that happens to be newer than what exists at the time in that particular community or country, which means that carbon trading can be another way of dumping old technology in the South.

Carbon offsets are often dependent on access to land and its associated water, soil, biodiversity and people resources in developing countries. Already CDM tree plantations as well as REDD-type projects have led to the appropriation of vast lands, usually in areas legitimately occupied and utilised by communities or indigenous peoples, who are subsequently deprived of traditional rights of access and usage.

The role of the World Bank
The World Bank has driven an aggressive campaign to promote and support carbon trading as a solution to climate change, together with bodies such as the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Environment Programme (UNEP). In many ways these projects merely protect big polluters in the North.

What are the alternatives?

Many Southern groups have mooted the concept of Ecological or Climate Debt as part of the real solution for addressing climate change inequity. There must be genuine compensation for climate change, based not only on the dramatic impacts that climate change will have on current and future generations, but also in recognition of the debt owed by wealthy countries to those in the South for historical colonial exploitation and heavily polluting activities that resulted in their indecent wealth.

One alternative to the carbon market could be one-way transfers of finance through grants to support the development of opportunities for decent work in exploited countries. This should happen in conjunction with the systematic writing off of dubious historical loans, which were often incurred for the benefit of the lending countries in the first place. The concept of a ‘green economy’ must be rejected by countries that have suffered under Northern capitalism as yet another false solution aimed primarily at preserving the existing economic order.

Climate justice is the way
Developing nations in general and African countries in particular must stand together to oppose exploitation by external economic influences such as the market-based non-solutions offered by carbon trading. Another world is possible, but to make the leap of faith needed to transcend the present state of our embattled world needs new vision together with determination to make it a reality.

Norwegian-owned company Green Resources Ltd (GRL) is hoping to generate carbon credits from a CDM tree plantation at Idete in southern Tanzania. It has already established alien pine and eucalyptus plantations to replace biodiverse grasslands. The company intends to sell the carbon credits generated to the government of Norway.

Blessing Karumbidza and Wally Menne investigated and concluded : (i) the project will not be a net carbon sink over its lifetime, but it is in fact likely to be a source of carbon emissions; (ii) the project is not ecologically sustainable or economically viable; and (iii) the project is viable without income from the sale of CDM carbon credits.

With respect to the social, cultural, political and economic impacts of industrial tree plantations, monoculture tree plantations are unsustainable in numerous ways, even with market-based conservation measures such as Forest Stewardship Council (FSC) certification in place. The Idete project resulted in local communities being displaced from their land, poor working conditions, destruction of biodiversity resources that communities depend on, reduced water availability, and many other direct and indirect impacts on local livelihoods.

Wally Menne is a member of Timberwatch Coalition, South Africa. The Timberwatch Coalition is a voluntary alliance of South African non-governmental organisations and individuals that are concerned about the negative impacts of industrial tree plantations on people and the environment (see www.timberwatch.org).

REDDanother false solution | by Amandla! editorial staff

One of the key discussions at COP 17 will be around Reduced Emissions from Deforestation and forest Degradation (REDD): whether and in what form REDD will be included in the Kyoto Protocol or its successor. It has strong support, particularly from the governments of forested countries, because of the attraction of the finances promised, but implementation of REDD will be disastrous – if pilot projects are anything to judge by.

Reduced emissions from deforestation and forest degradation
Eighteen to twenty-five per cent of global carbon emissions are a result of deforestation and forest degradation – about as much as the entire transport sector. REDD was put on the table in 2007 at COP 13 in Bali, when there was agreement that there was ‘urgent need to take further meaningful action to reduce emissions from deforestation and forest degradation’. It is an incentive mechanism for developing countries to reduce emissions from deforestation and forest degradation – effectively some countries would be paid to protect their forests.

Where there is enormous financial value in destroying forest products, whether for sale or to clear land for crops such as oil palm, the concept of providing a financial incentive to protect forests seems noble. But it is clear that REDD is less about protecting forests and more about protecting commercial interests in the industrialised world –  paying to protect forests suggests a neglect of the real drivers of deforestation such as over-consumption and over-production.

There are significant flaws in the proposal, not least its definition of ‘forests’, which fails to distinguish between natural forests and plantations. With the current weak definition, it is possible that biodiverse natural forests could be replaced with monoculture plantations (green deserts), and still receive REDD accreditation.

REDD projects are also expected to be disastrous for the many indigenous peoples living in the forests. According to the Food Agriculture Organisation, 60 million indigenous peoples depend on forests for their survival, and most forests are found in indigenous peoples’ territories. For such communities, forests are not merely exploitable resources; they are the source of their lives and lifestyles. Investigation by Indigenous Environmental Network shows that REDD-type pilot projects have already violated indigenous peoples’ rights and exacerbated eviction, fraud, conflict, corruption, coercion and militarisation in countries such as Peru and Papua New Guinea. Unclear land tenure practices in Africa makes the continent even more vulnerable to this new wave of colonisation. REDD is inherently about commodifying and privatising forests, trees and land, and it corrupts everything that indigenous peoples hold sacred.

There is as yet no agreement about financing REDD, but market mechanisms have a strong presence in the discussions. One suggestion is that it be incorporated into the Clean Development Mechanism (CDM), which would make it possible for countries with emissions reduction commitments under the Kyoto Protocol to benefit from credits generated through REDD projects – in other words, this would expand the scope for avoiding emissions reductions at source. Climate scientist James Hansen shows that industrialised countries could offset 24–69% of their emissions through the CDM and REDD, thus avoiding the necessary domestic cuts that are required to peak emissions around 2015.

At COP 16 in Cancun last year, big steps were taking towards the realisation of REDD, with agreement on, amongst other things, a common goal for REDD, activities to be included, and the adoption of the so-called safeguards. The safeguards are intended to secure the rights of indigenous peoples and avoid transformation of natural forests into plantations; however, they are voluntary, weak and not legally binding.

The safeguards will be discussed again at COP 17. Indigenous Peoples’ organisations are urging for the safeguards to be legally binding, and for the adoption of the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) in the agreement. Even with UNDRIP, the rights of indigenous peoples will be at high risk, because many countries still do not recognise the self-determination and rights of indigenous peoples. Financing of REDD will also be on the COP17 agenda – inclusion into the CDM must be avoided if REDD is to contribute to meaningful emissions reductions.

It is clear that there are severe inherent problems in REDD. Unless it shifts its alignment significantly – towards protecting forests and forest peoples and away from protecting carbon polluters – it will serve only to contribute to the destruction of forests, provide another opportunity for human rights violations, and offer yet another escape for industrialised countries from meaningful emissions reductions at source. As REDD is now, it is a symptom of the deeper driver of climate change – capitalism.

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