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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:

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:

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.


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.


Rio minus twenty: Too little, too late

By Ben Powless
July 14, 2012

It’s been twenty years since the first Earth Summit. That’s nearly 500 months, or over 7,000 days. Yet, during all that time, state governments around the world have nearly completely neglected their responsibilities to the natural world, and it’s starting to show.

Almost to highlight the point directly, a heat wave hit North America just as the Rio+20 summit was taking place. Global climate change is being felt just about everywhere, challenging humans and other species’ ability to adapt. Species are going extinct at a rate never before observed. These issues were all the impetus to the first Rio Earth Summit in 1992, where world leaders pledged to resolve these crises to avoid environmental collapse. Twenty years later, they returned, with full knowledge that the problems were worse than ever, and seemingly without any grand intentions to resolve the situation.

Of course, if you listened to many of the countries who were present, they came up with a credible plan to avert ecological disaster. Their plan contains a few measures, including plans to develop a set of “Sustainable Development Goals”, modeled

Indigenous leaders march to deliver the Kari-Oca Declaration.

on the Millennium Development Goals, as well as general goals of improving environmental management, and advocating for a so-called ‘green economy’.

However, before the planes left Rio de Janeiro to carry world leaders back home, environmental activists, anti-poverty groups, women’s representatives, youth organizations, and Indigenous Peoples had already condemned the final document as a failure, completely insufficient for the global environmental crises ongoing.

Instead, civil society groups announced their intention to work more closely together, to move forward on various proposals developed in a series of alternative conferences. Many groups took part in the People’s Summit, in addition to two separate conferences organized by Indigenous Peoples. The biggest of these, the Kari-Oca Gathering, was organized by Indigenous groups in Brazil with an open invitation to Indigenous participants from everywhere.

Those who attended the Kari-Oca gathering put together a scathing declaration, indicative of the general disdain held by many civil-society groups towards the direction the UN is seen to be moving. In the declaration, the group rails against the ‘green economy’ proposal as another tool to expand capitalism and globalization to Indigenous communities, and as a code-word for the further destruction of ecosystems and biodiversity over the world.

A Kayapo leader signs on to the Kari-Oca Declaration.

Instead, Indigenous groups urge people to transform production and consumption based on human needs, to build sustainable communities founded on traditional knowledge, and to empower Indigenous Peoples worldwide to protect and manage their traditional lands and territories, as is dictated by the UN Declaration on the Rights of Indigenous Peoples.

At the official UN summit, Canada was up to its usual bag of tricks. While some countries cathme to the meeting with genuine intentions of achieving some progress, Canada continued its same bag of tricks from the UN Framework Convention on Climate Change, where for years they have been blocking significant progress on a new climate treaty, going so far as to drop out of the Kyoto Protocol last year. At the summit, Canada joined with Venezuela to stop any attempts to limit the amount of subsidies going to fossil fuel companies – a significant cause of not just global warming, but impacts on frontline communities around the world. Canada also joined with other nations to actually block attempts to protect oceans that are outside of national jurisdiction.

Canadian civil society groups were direct in their denouncement of the dearth of action, ripping up the negotiated text the second day of the meetings. “We were promised leaps and bounds, but this agreement barely moves us forward by inches,” Cam Fenton of the Canadian Youth Climate Coalition yelled to a crowd of youth who staged a sit-in at the UN talks.

Ta’Kaiya Blaney is boosted above the crowd by Kandi Mossett (IEN) as she addresses the group of young people staging a sit-in.

“What are we going to leave for future generations? There’ll be no environment left without change. It needs to come not tomorrow, but today,” declared Ta’Kaiya Blaney, an eleven-year old from the Sliammon First Nation in BC, after ripping up the document at the sit-in. Ta’Kaiya was in Rio as part of the Indigenous Environmental Network delegation to speak out on the impact of the tar sands and Enbridge pipelines coming through BC.

The same day, a few hundred Indigenous groups marched to the UN summit site, fully decked in their traditional dress and paint from the Amazon. They were there to deliver the Kari-Oca Declaration, which they were eventually able to do, under heavy military surveillance, as helicopters hovered overhead, and armoured personnel carriers sat by idly. The document was received by a minister from the Brazilian government, and an official of the UN, despite the final negotiation text having already been signed. Indigenous groups were disappointed that the final text neglected to include any protections for Indigenous rights or culture as part of its main principals.

“Our people’s cultural world view is that humanity must be in harmony with mother nature. We should treat nature as a source of living, not extraction. The multiple crises that the world is facing today – economic, social, political and climactic – we, indigenous people, have much to offer in terms of solutions,” offered Windel Bolinget, of the Cordillera People’s Alliance from the Philippines.

In the end, many observers left with feelings of frustration, but also some hope. For their lack of progress, the talks managed to bring together thousands of representatives of civil society and social movements from across the globe, and by the end emboldened many of them to link their fights and continue their struggles even stronger back at home. It has become much clearer over the past years – under the Harper government in particular, and with the state of international relations generally – that the United Nations was not the place to look for solutions to trickle-down from the top, but that the solutions to the plethora of environmental issues and injustices would have to boil-up from the grassroots.

For more photos please see: