Saturday, June 06, 2009

The carbon credits that should not exist

For the last three weeks I've been working on the most difficult story of my career. Difficult in many ways. Information that is hidden and wants to stay that way. Information that is financially complex and easy to get wrong, and information that is legally difficult to publish.

Today we publish a story about carbon credits that should not exist. Nonetheless they were produced by someone in the government of Papua New Guinea. Reading it now, what strikes me most is of what we could not write rather than what we could.

This is an important story for a number of reasons. A carbon credit puports to represent something real, in other words that carbon has been removed from the atmosphere by some activity. In this case, the activity in question was avoided deforestation. The problem is that it is very easy to print a piece of paper saying something has happened. It is much harder, and takes far longer, to actually do it. And these carbon credits that have materialised in Papua New Guinea very much seem to be claiming they are something they are not, and could not be.

But the fact that they do exist underscores something very crucial, as the world negotiates a deal to formalise the process of avoided deforestation, something called REDD. We need to be careful that we do not spend trillions of dollars on a technology that does not work to lower greenhouse gases. Trees are a carbon removal technology.

And the main problem with them is that those who are eager to sell rights to carbon, whether this is indigenous groups or governments, may not actually have full control of whether or not the trees are cut down. If you cannot defend property, then a property right is meaningless.

There is much more to tell. It is not easy but I will try. If you want to tell me more about this story, please get in touch via The Economist's media directory.

Papua New Guinea and carbon trading
Money grows on trees

Jun 6th 2009
Irregular carbon credits cause upheaval in the government of Papua New Guinea