The virtual economy of REDD: Conflicts of interest, hot air, and dodgy baselines

By Chris Lang
REDD Monitor

In order for REDD projects to generate carbon credits, a “baseline scenario” has to be created. This is supposed to reflect what would have happened under business-as-usual, or what would have happened in the absence of the REDD project.

The baseline is also necessary to show that the REDD project is additional, that the reduced emissions would not have happened without the project.

Conflicts of interest

Clearly, it is in the REDD project developers’ interest to have a baseline that predicts a high rate of deforestation in the project area. The higher the rate of deforestation in the baseline scenario the more carbon credits will be generated. And the less the project will have to reduce deforestation.

Of course REDD project developers can’t pick their own baselines and hope that the rest of the world believes they are not just making things up. The methodology proposed by the project developers has to be validated and project has to be audited. This is where voluntary certification schemes come in, like the Verified Carbon Standard, Plan Vivo, CarbonFix Standard, and so on.

But there’s a catch. The voluntary certification schemes make their money from generating carbon credits. The more carbon credits generated, the more money they make.

And the validators and auditors that are accredited by the certification scheme are paid directly by the project developers. In order not to lose future work opportunities, auditors are unlikely to be too picky about approving their clients’ methodologies.

This is a blatant conflict of interest at the heart of the REDD mechanism.

A new paper published in the International Forestry Review, looks at two REDD projects and asks a series of questions:

  • What can we learn from the study of baseline settings in REDD+ projects?
  • Does it sufficiently address the issues of permanence and additionality?
  • More importantly, can certification standards provide a legitimate guarantee that chosen baselines are reliable measures for predicting CO 2 emissions’ reductions in the long term?

The paper is titled “The ‘virtual economy’ of REDD+ projects: does private certification of REDD+ projects ensure their environmental integrity?“, and the authors are Coline Seyller, Sébastien Desbureaux, Symphorien Ongolo, Alain Karsenty, Gabriela Simonet, Jean-François Faure, and Laura Brimont.

The two projects that the paper looks at are the Mai Ndombe REDD project in the Democratic Republic of Congo and the Corridor Ankeniheny-Zahamena REDD project in Madagascar. Both of these projects were certified under the VCS system, in 2012 and 2014, respectively.

The authors note that,

It is tempting for project developers to design a ‘convenient’ baseline scenario to generate more credits in order to seek financial profit or, as currently appears to be the most frequent case, to render a high-cost REDD+ project financially viable.

Mai Ndombe, DRC

The baseline for Mai Ndombe was established, not by looking at historical trends of deforestation in the project area and extrapolating into the future, but by using a reference area.

According to VCS guidelines the reference area does not have to be adjacent to the project area. In the case of Mai Ndombe, the reference area is about 600 kilometres away: the Mayombe forest in Bas-Congo province.

The authors point out that there are important differences between the two areas. Mai Ndombe is a dense, humid forest. Mayombe is a mosaic forest. Mai Ndombe is about 50% further from Kinshasa, the capital of DRC, than Mayombe. Mayombe is close to major shipping harbours. Bas-Congo province has a high population density. Mai Ndombe is sparsely inhabited.

The authors describe the reference area as “a dubious choice”.

The developer of the Mai Ndombe project, Wildlife Works, chose the following baseline scenario:

Where deforestation is initiated by the primary agent through legally-sanctioned commercial harvest and the area is ultimately converted to non-forest by the secondary agent through unplanned deforestation (e.g. subsistence agriculture)…

The authors question the assumption that in the absence of the REDD project, the forest would be logged (legally) and then converted to agriculture by local communities:

Ultimately, the loss of forest cover in DRC depends on many drivers including commercial or illegal logging, mining, farming and industrial agriculture. The weight of each driver on deforestation and forest degradation may reflect the degree of compliance with the law by logging/mining/agricultural companies, the local context of poverty and land tenure, and overall, the capacity of state bureaucracies to implement an efficient command and control system.

Corridor Ankeniheny-Zahamena, Madagascar

The CAZ project, set up by Conservation International, also uses a “questionable” reference area. The reference area in this case is 22 times the size of the project area.

Differences between the reference area and the project area include elevations and slopes, farming practices, and population density (the reference area is more densely populated than the project area). The authors conclude that, “there are major differences between the CAZ project area and its reference area.”

There are differences in the deforestation rates in the two area. The reference area has an annual deforestation rate between 1% and 1.26%. In the project area the annual rate is somewhere between 0.5% and 0.6%.

In its project design document, Conservation International takes the higher rate of deforestation for the reference area as a baseline scenario. And then assumes this same rate to be the historical rate of deforestation in the project area!

“The deforestation rate inside a well-established protected area is 0.20%/yr, being an 84% reduction of the historical deforestation rate within CAZ 1.26%/yr).”

The authors point out that without doing anything on the ground, Conservation International could, on paper at least, reduce deforestation by half. This, the authors note, with a hint of academic dryness, “could lead to the so-called ‘hot air’ phenomenon”.

Baselines are “untestable guesses”

Baselines allow project developers to put an exact figure on the number of tonnes of carbon that have not been emitted as a result of their project. But this number is based on a fiction.

There is no way of testing whether a baseline scenario is true or not, because it is something that might have happened had the REDD project not gone ahead.

As the authors conclude, “the baseline scenarios in REDD+ projects amount to untestable guesses”.

[W]ith REDD+ projects there is a kind of irreducible uncertainty regarding what the ‘right reference scenario’ should be. Our case studies show that only small differences in baseline scenarios – whether designed intentionally or not – can have severe financial (positive for business actors) and environmental (negative for the climate) consequences. The interest of the project developers is obvious: as the market price of carbon credits falls, the financial viability of a project (that relies on the carbon market for financing) declines. ‘Optimizing’ the parameters, notably those related to baseline settings, seems to be the only way to maintain the viability of a project’s business model.

The authors of the paper are careful to talk about project developers “optimizing the parameters” or using a “convenient baseline scenario”.

Fraud would be a better way of describing what REDD project developers are doing when they set bogus baselines. The voluntary certification systems, such as VCS, are complicit in this fraud.

Greenpeace opposes REDD offsets in California. But that’s not what EDF’s Steve Schwartzman wants you to think

by Chris Lang – REDD Monitor

At a recent workshop in Sacramento, Environmental Defense Fund’s Steve Schwartzman was waving around copies of a letter in favour of California using REDD offsets in its cap and trade scheme. Following the letter was a list of NGO logos, including that of Greenpeace Brazil. But Greenpeace has consistently opposed REDD offsets in California. How did Greenpeace’s logo appear on a letter supporting REDD?

California’s Air Resources Board is currently considering whether to include REDD offsets in its cap and trade scheme (AB 32). The ARB is holding a series of technical workshops about this proposal, one of which took place in Sacramento on 28 April 2016.

The day before the workshop, Carlos Rittl, Executive Secretary of the Climate Observatory, a coalition of 40 NGOs in Brazil, sent a letter to California’s Governor, Jerry Brown. The letter was in support of California including REDD in AB 32:

We write to express the support of the Brazilian Climate Observatory to the State of California for its significant efforts to reduce their greenhouse gas emissions domestically, and also for considering the importance of tropical forest conservation and the involvement of local communities in these efforts.

A day after the workshop in Sacramento, Steve Schwartzman, Senior Director of tropical forest policy at the Environmental Defense Fund referred to the letter in a tweet:

Schwartzman
The link in Schwartzman’s tweet is to the letter from Carlos Rittl, posted on EDF’s website.

Manufacturing consent

For the meeting in Sacramento, Schwartzman printed out copies of the letter. Schwartzman’s version of the letter was the same as that on EDF’s website, but with one very important difference. Schwartzman had added several pages to the letter, featuring the logos of the member organisations of Climate Observatory – including Greenpeace Brazil.

A few days later, Jonah Busch at the Center for Global Development, tweeted about Schwartzman’s version of the letter:

Busch
A colleague sent REDD-Monitor a link to Busch’s tweet, with the following comment:

“I have to admit that I’m more than average surprised that Greenpeace supports to include REDD+ as an offset mechanism in California.”

I was also surprised, given Greenpeace’s vocal opposition to California’s REDD plans.

So I asked Greenpeace about this. And Greenpeace asked Climate Observatory. Very soon, a clarification letter appeared from Carlos Rittl. It turns out that the original letter to California’s Governor Brown was signed by Rittl only. It was a “network-led initiative that contains its single signature”.

Rittl’s explanatory letter is posted below. Busch, at least, tweeted Rittl’s clarification.

Schwartzman didn’t bother.

2016-05-31-152458_828x965_scrot

To whom it may concern.

The Brazilian Climate Observatory (OC) is a network comprising a broad spectrum of Brazilian civil society organizations. OC’s positions and recommendations on any issue are developed after consultation processes among its members aiming to reach consensus.

OC’s position about any given issue represents the average views of its members, and does not necessarily correspond to any individual organizations’ views or positions on the same specific subject.

OC has recently submitted a letter to the Honorable Governor of California, Mr. Jerry Brown, expressing its support for the inclusion of REDD+ activities on the States’ AB32 program. That letter was a network-led initiative that contains its single signature.

It has come to our attention that third parties have shared that letter with stakeholders from different groups in the United States alongside a list of OC members, without previous consent of any or all network members. Unfortunately, that could have been mistakenly understood as a list of associated signatures to the letter from each individual OC member. That was not the case. The referred members list does not represent a list of additional signatures to the letter.

Greenpeace Brazil is one of OC members. Its well-known public positions, as well as the positions Greenpeace International, Greenpeace US or any other Greenpeace national organization, have not changed and do not endorse the inclusion of REDD+ activities in any offset mechanism or legislation worldwide. However, during the Climate Observatory internal consultation process, Greenpeace Brazil has kindly not expressed its opposition to the OC letter to the Governor of California as a matter of respect to the views of some other members.

In last few days, external stakeholders have approached Greenpeace USA about the issue with questions related to its positions on the subject of the letter. Therefore, I hereby certify what has been already stated above. The letter to Governor of California expresses the average views of OC members for its own position on the issue only. It was not signed by OC individual members and do not necessarily expresses the position of each network’s member organizations.

2016-05-31-152715_828x965_scrot

Will Paris save the climate? Of course it won’t

2015-07-09-124824_1037x1026_scrot“U.N. climate deal in Paris may be graveyard for 2C goal,” is the headline of a recent Reuters article, which points out that the chances of keeping global warming below 2°C are rapidly disappearing.

The article includes a quotation from Oliver Geden, of the German Institute for International and Security Affairs:

“It’s just not feasible. Two degrees is a focal point for the climate debate but it doesn’t seem to be a focal point for political action.”

Christine Figueres, Executive Secretary of the UNFCCC, disagrees. Reuters reports her as saying that new mechanisms for future rounds of pledges, perhaps in 2025 and 2030, can hit the 2°C mark. “You don’t run a marathon with one step,” Figueres comments.

It’s an interesting metaphor. Paris will be the 21st Conference of Parties to the UNFCCC. That’s 21 years of negotiations. And, to paraphrase Figueres, you don’t run a marathon for 21 years.

It’s not surprising that Figueres argues that COP21 is just another step on the way towards addressing climate change. She knows that there will be no decision that comes out of Paris that will come anywhere near keeping emissions below 2°C. And it’s understandable that the Executive Secretary of the UNFCCC doesn’t want to admit that the UNFCCC is failing abysmally.

But it is perhaps surprising to read that Joe Romm supports Figueres’ position. Romm is the Founding Editor of Climate Progress. He believes that action is urgently needed to address climate change. Yet in February 2015, he wrote,

“I don’t think one can call Paris a failure merely because it doesn’t create an agreement that would limit warming to 2°C, much as we ultimately need to keep to that limit.”

Romm recycled his article yesterday in response to the Reuters article.

Romm argues that it is impossible to get onto what Figueres calls “the 2°C pathway” in Paris, “without every major player agreeing to specific and serious post 2030 cuts, an outcome that was never on the table”.

This is crazy. Romm is a climate hawk who has worked tirelessly for action on climate change for many years. Yet his vision of success involves emissions reductions targets 15 years in the future. The fact that even targets way off in the future were never on the Paris table is a sure guarantee that the meeting will fail.

Romm compares the climate negotiations to the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. His point is that the negotiations were difficult, the initial targets too weak, and it took a long time. But in the end, the Montreal Protocol.

The first problem with the comparison is that, as Romm acknowledges, reducing CFCs is a lot simpler than reducing greenhouse gas emissions.

But the differences between the climate negotiations and the ozone negotiations are more interesting than the similarities. When the Montreal Protocol was negotiated, there wasn’t a massive, well-funded misinformation campaign attempting to sabotage any chance of a successful outcome.

The Montreal Protocol reduced CFC concentrations in the atmosphere by banning CFCs. There was no CFC trading programme in the Montreal Protocol.

And the meetings leading up to the Montreal Protocol were not sponsored by companies that manufacture CFCs. About 20% of the €170 million that COP21 will cost is to come from companies, including some serious polluters:

  • Électricité de France (EDF) runs coal-fired power stations. In 2013, EDF sued 21 climate activists who occupied its power station in Nottinghamshire in the UK for a week. EDF later dropped the £5 million lawsuit.
  • Engie (formerly GDF Suez) is a large energy company. It is planning a 1200 MW coal plant in South Africa. In May 2015, hundreds of people protested against Engie’s plans. Also in May, the company’s chairman and CEO, Gérard Mestrallet, visited the World Bank telling the Bank about Engie’s support for carbon pricing and the EU Emissions Trading System.
  • Suez Environnement is one-third owned by Engie. Both companies are members of the Centre for Non-Conventional Hydrocarbons – a fracking lobby group. Suez is the world’s second largest environmental services provider, with a focus on water. In 2006, Buenos Aires took back control of its water services from Suez. The company sued, and recently won a court case for US$405 million compensation.
  • Renault-Nissan is a car manufacturer. The company will provide 200 electric cars to COP21. In total, Renault-Nissan has sold 250,000 electric cars. Last year, Renault-Nissan sold 8.5 million cars.
  • BNP Paribas was the leading French bank in terms of support for coal between 2005 and 2014. BankTrack lists a series of problematic projects that BNP Paribas has financed, including the biggest coal mine in Indonesia, Kaltim Prima Coal Mine, the Nam Theun 2 dam in Laos, an LNG project in Papua New Guinea, and the Tata Mundra Ultra Mega Power Plant in India.
  • Air France is an airline company. On its website, the company points out that, “around 80% of Air France’s emissions come from long-haul aircraft”. The company’s position on reducing these emissions could safely be described as stubborn:

    There is no substitute method of transport for passengers or for cargo aircarfts [sic] carrying express goods such as valuables or perishable foodstuffs.

    In 2012, Air France was one of nine airline companies that opposed a European carbon tax on aviation.

    Here’s a petition you can sign to kick the polluters out of the climate talks:

    kickbigpollutersout.com