Friday, August 21, 2009

Call in the consultants

The story so far: Papua New Guinea has been leading the way in international negotiations over avoided deforestation in the hope of curbing greenhouse gas emissions, an objective known as REDD (Reducing Emissions from Deforestation and Degradation). But during 2009, a scandal erupted over the appearance of carbon credits that appeared to have been endorsed by senior figures in the government. Following complaints by the state governors, legal moves in the court in Port Moresby, and media reports, the head of the Office of Climate Change (OCC; sometimes also referred to as OCC&ES), Theo Yasause, was suspended pending investigation.

The scandal in Papua New Guinea has happened at a difficult time for the country. While it should be working on national legislation for REDD, and preparing for Copenhagen, it has to waste time and resources on investigating its own office of climate change. But it is all much needed work. It would have been far worse to let the situation in the OCC fester.

The government is also having to handle an increasingly enraged opposition. In late July, angry scenes erupted in the parliament after the government narrowly avoided a motion of no confidence by adjourning the session until November for "much needed refurbishments" to parliament house. Yes, you did read correctly. The government survived the motion by closing parliament and calling in the decorators. Chaos ensued. Ilya Gridneff from AP writes, "MPs hurled abuse at each other across the chamber and security officers had to restrain members of the public who voiced their frustration when the government won the adjournment vote on Wednesday." See Canberra Times.

Improvements in governance and transparency, in any country, are often hard to win. The challenge for Somare's government is to complete this investigation, figure out what went wrong, and when the paint is dry on Parliament House, to publish its findings. If necessary, further legal action should be taken. It seems difficult to see how the report could fail to find fault in some places. For example, the evaporation of the office's budget is highly worrisome.

However, before government critics get too over-excited, it should be pointed out that not all of the things that have happened in the name of the government, were necessarily officially endorsed. Indeed, legal proceeding are under way in Australia in relation to the A series of carbon credits.

The acting executive director of OCC, Wari Iamo, wants the investigation and review to be completed by late October, so that everything is in place for the climate change meeting in Copenhagen this December. The investigation wants to find out whether any policies or laws were beached over carbon trading arrangements made by any public officer. It is also going to look into OCC's finances and how they have come to be so poorly managed that it has run out of money for 2009. Basic errors in financial management have resulted in substantial and unrecognised liabilities being incurred.

At the same time, the OCC needs to get on with developing its Interim Low Carbon Development Strategy, which emphasises the REDD policy agenda. Part of this involves looking at securing land for REDD and for benefit sharing. Another part of this strategy involves looking at the drivers of deforestation and degradation in the country. Again, much needed work. You can't just buy up a few blocks of forest in a country, slap a REDD sticker on them and hope that deforestation will go away. Finally, an economic analysis of REDD costs is also needed in the country, and will use the methodology developed for Guyana's low carbon development strategy.

So much work, so little time. So how is Papua going to do it? It is probably going to call in the consultants. Guyana did it. Brazil and Indonesia did it. So did Mexico. And the climate consultants du jour are McKinsey. If Papua can find a mere $2m, McKinsey will load up its crack team of climate consultants into the Batplane, fill it up with biofuel, and send it swooping down on Port Moresby to help the country prepare itself for Copenhagen by developing the national REDD and climate change plan, deploying cost-abatement curves from their utility belts... and all just in time for Papua's cabinet meeting in November.

Now I can guess what some of you are probably wondering, shouldn't Papua be doing this all for itself rather than calling in the western consultants? Well in an ideal world, which this isn't, perhaps--and only if it had all the expertise it needed. Remember that there are stacks of people fretting about whether Papua (and many other countries) are going to manage to get this all right.

How will leakage be avoided? How can REDD truly address the drivers of deforestation? How can Papua manage forest conservation at the same time as promoting a sustainable low-carbon development path? How can Papua increase agricultural productivity as a way of reducing pressure on forestry? Well, guess what? This is exactly the sort of thing that McKinsey consultants know all about.

Of course they don't come cheap, and they are not without their problems. Guyana's response to its McKinsey REDD report backfired a bit in some quarters. But Papua is a different country with a different set of problems, and a low baseline of deforestation is not one of them. So it will certainly be interesting to see what McKinsey comes up with. Where to find the money? Well UN-REDD is likely to be asked, and all the usual government donors. The Australians, in particular, might be a good source to tap. The country's entire carbon strategy seems to be to buy carbon offsets abroad, whether or not these are produced by the rules and regulations of a mandatory market.