Thursday, June 18, 2009

Carbon credit fraud inquiry

There is a lot of mudslinging going on inside Papua New Guinea. Some of it involves sideswipes at the media. Seeing as there are only a small number of journalists are actively working this beat at the moment, I have to feel that complaints about media coverage must be partly directed towards me. The Office of Climate Change has referred to "misinformation in the media done deliberately to create sensationalism and drama with a view to destroy the Office of Climate Change and what it has achieved so far and what it stands to achieve for this country".

So before I write more about the irregular carbon credits from the government of Papua New Guinea, it might be useful for me to state my opinion about carbon markets, reducing carbon emissions through avoided deforestation (known as REDD) and Papua New Guinea.

I have been a long advocate for payments for ecosystem services and wrote a long piece about this very subject for the Economist many years back, which was the basis of a memorable cover we ran (shown above). It still graphically sums up what everyone is talking about right now. (The original piece is now behind our subscriber wall, so I've linked to a copy posted on the web.) And I've written many times in support of property rights in the solution of environmental problems.

Given the current threat of climate change, the idea of reducing deforestation as a way of reducing carbon emissions is a good one. I'm uncomfortable with the idea that the main aim of reducing this deforestation seems to largely be as a way for developed countries to avoid making meaningful cuts in emissions. We should be making those cuts in emissions and paying to reduce deforestation.

That said, everyone knows that we need to find a way of stopping people cutting down so many trees, and that some kind of incentive is necessary. Further, that this incentive is going to involve money. The devil, though, is in the details. Whether it will be possible to set up a system that is not open to massive abuse, is the big question. As for Papua New Guinea, I've no agenda towards anyone or any institution other than to discover the truth. Such an agenda will not suit everyone, which is just tough.

But I digress. The main point of my post is to pick up on a press statement published by the Office of Climate Change in a number of newspapers on Tuesday. I have a copy of one of these which was published on page 7, of The National. There must be about 1,500 words in this vast statement, which contains some bizarre and and a few ill-advised statements.

The press statement is signed by Leo Tale, acting executive director, of the Office of Climate Change on June 15th, but must have been submitted to the newspaper at least the day before on the 15th. This is very curious because on that day, Theo Yasause was also giving a press conference as the director of the Office of Climate Change. Who is running Papua's Office of Climate Change right now? I'll let you know when I have an answer on that.

Until then, if you happen to be part of the international community of donors (Norwegians, Australians, UN, World Bank) currently rushing to thrust money on Papua New Guinea in order to improve "governance" so that REDD will work... you might just want to make sure you know who is running the Office of Climate Change before you write the cheque. Indeed, if you can get a good answer to that question I'd be delighted to know. Until then, you have been warned.

Finally, I'll turn to the most interesting part of this recent press statement. It reads:

"2. Climate Assist PNG Pty Ltd: -
This company sought to negotiate Carbon Credits in the market places that were not issued by this Office. This Office has had no dealings with this company in respect of credits issued. We were aware of this some months ago. We have our laywers pursuing this matter with foreign law enforcement agencies as a matter of fraud. As such we cannot comment further on it."

I'm no lawyer but I would imagine that such a statement would be pretty damaging to Mr Corby's business interests and he might be somewhat miffed to be accused of fraud by someone who may, or may not, be the head of the office of climate change. Indeed, I just spoke with Gregory Corby, of Climate Assist, a few hours ago and he says he has made a complaint to the Attorney General in Papua New Guinea, and his lawyers have told him not to say anything.

There is a lot more to say, but it is late in the UK, and it will have to wait another day. Suffice to say that what everyone is referring to is an "A series" of carbon credits that were mentioned in passing in my piece for The Economist. (As opposed to a "B" series which were discussed more extensively.)

The A series date back to 2005, prior to the creation of the Office of Climate Change. So it could well be technically accurate to say that the office of climate change had "no dealings with this company in respect of credits issued". But if these carbon credits do exist, as the statement acknowledges, who, exactly, in government authorised their production?

It is hardly credible that Mr Corby would simply decide to print off a whole bunch of carbon credits from Papua New Guinea and try to sell them without any government knowledge.

So who in government knew about, and who approved, the "A" series of Papua carbon credits?