The failure of Copenhagen

I'm not intimate with the climate change negotiations, and have not reported on them or climate change except for a stint in November, but quite a few people have asked me what I thought of Copenhagen so here are my thoughts..... I'm disappointed, Copenhagen was a washout. You know that an event, or a deal, is a failure when people start redefining what success is after the event. Especially when success had been quite clearly defined to begin with as something else entirely.

We knew what we wanted: a legally binding deal over climate change, one with targets for emissions cuts and finance. Since November, the climate talks have been a car crash in slow motion. No doubt, behind the scenes, this crash has been going on for far longer. For me, the beginning of the end started on the penultimate day at the previous climate talks in Barcelona this November. It was apparent by Thursday that it was too late to get the legal deal that everyone had been aiming for over two years. I got very drunk that evening in a tapas bar that evening with environment correspondents from The Guardian, The Times, The Irish Times and The Telegraph. There was also someone from the RSPB, and a young man from Greenpeace who had travelled from the UK by train because he was ideologically opposed to travel by air. That evening, over one of many countless glasses of red wine I wondered how history would judge us, and judge this moment. I wondered whether I'd ever have to explain to my children why we couldn't agree to fix the world.

Will the next generation be laughing at us because some magic technofix solution solved the problem in a decade? Or will they be able to trace problems of climate, food and water supply and losses of biodiversity to our failure to master a global environmental problem of this kind?

In Barcelona, Yvo de Boer said that we could still get a legal deal but through a different route. First would come a political deal but a strong one with targets and commitments [sound of hollow laughter], which is then turned into a legal deal later on. In the end, five nations went into a huddle, had a group hug, took a collective bow and then went home for Christmas.
Although, lets be clear: it wasn't just hatched in the final hours. Negotiations over a political deal have been going on for some time during 2009, the only question is: how long?

If I were to guess, and this is a guess. I would suppose that the existence of a political deal had to remain secret until the UN talks were close to failure. Then the political deal could be produced like a rabbit out of the hat. Revealed too early, a political alternative suggests that some of the major players might not be quite so committed to the difficult and costly UN legal deal, when a lovely, fudgy, largely meaningless political deal is far preferable. A political agreement can be announced with great fanfare and everyone can go home with a warm feeling.

Avoided deforestation (REDD) as a climate reducing strategy, ironically, seems to be going strong--although without a commitment to cuts that Copenhagen was supposed to produce the market for carbon offsets related to forestry there is a big question of how much demand there will be for these.

If I were part of the political process, what I'd do next would be to try and put the blame squarely on the UN. Lets not blame the UN, everyone signed up for this process two years ago and to walk away with so little to show for all the effort is simply a testament to the failure of leadership by the world's largest carbon emitters.

As ever Kevin Grandia, at DeSmogBlog.com, puts it all far more pithily.

More of the green stuff wanted

COPENHAGEN

Everyone loves trees. A lot of people think that climate change could be mitigated if we cut fewer of them down and left more standing.

Over the last few years, around the edges of the struggling climate change discussions, one of few areas of agreement has been on the merits of slowing down the rates of deforestation, and the costs of doing so. The Prince's Rainforest Project has been doing some important work in crystallising discussion around the sums of money needed to kick-start interim finance. So there are high hopes that some kind of agreement can come out of Copenhagen on forestry.

Against this backdrop, the Centre for International Forestry Research, has held a series of forest discussion days at the sidelines of climate change meetings of the last few years. One at Bali, one at Poznan and one at Copenhagen. Tomorrow is Forest Day 3. I will be chairing a subplenary on Mitigation.

"2009 is possibly the most important year for forests in living memory. We are in the final stretch of the road to Copenhagen, and COP 15, where negotiators expect to finalise a post-Kyoto global climate agreement in December. To coincide with the conference, CIFOR, the Collaborative Partnership on Forests (CPF) and the Government of Denmark will host Forest Day 3. Forest Day 3 will build on the success of Forest Day 1 and 2 in helping to ensure forests are high on the agenda for future climate outcomes, and will pave the way forward in making these outcomes work beyond Copenhagen." Full Programme.

Forest Day 3 will be held on 13 December at the Radisson Blu Falconer Hotel & Conference Center, Copenhagen, Denmark.

Mitigation

11.00 – 12.45

Falconer Room

Co-hosts
CIFOR
World Agroforestry Centre

Abstract
Carbon emissions from land-use change are estimated to account for one-fifth of current global carbon emissions. Reducing emissions from deforestation and forest degradation (REDD) has been promoted as an effective and efficient climate change mitigation option. Much of the debate has focused on the global architecture and how REDD+ can be included in a post-2012 climate agreement. Now is the time to increase the focus on national and local levels where the forests are found. The success of REDD+ in reducing emissions will depend on tackling profound market and governance failures. REDD+ policies must strengthen the institutional alignment of economic actors and the public interest, a challenge made more difficult by the complexity of the issues behind deforestation and the fact that many causes are external to the forest sector. Can this really be done? How do we introduce a transitional change instead of incremental improvements? Are global players and mechanisms up to the task? What about the resistance in countries and local communities? This subplenary will debate these controversial issues, seek answers to these questions and look to designing national REDD+ strategies that ensure climate-effective and cost-efficient reduction of carbon emissions with equitable impacts and co-benefits.

Moderator
Natasha Loder, The Economist

Panellists

• Arild Angelsen, Professor, Norwegian University of Life Sciences
• Vicky Corpuz, Executive Director and Chair, United Nations Permanent Forum for Indigenous People
• Sara S. Kendall, Vice President of Environment, Health and Safety, Weyerhaeuser Company
• Agus Purnomo, Head of Secretariat, National Council on Climate Change, Indonesia

Unpredictable weather: from Mojave to Copenhagen

I've just returned from Mojave, California, where I attended the unveiling of a new spaceship, and have arrived in Copenhagen for the climate change meeting.

In Mojave I was lucky enough to witness the unveiling of Virgin Galactic's new spaceship, VSS Enterprise. It was an astonishing evening, with gale force winds rocking the marquee erected to shelter the 800 people (press, VIPs, astronauts) who came to witness the event.

In June 2004, I witnessed the flight of SpaceShipOne from this very runway in Mojave, in the full heat of the desert. The event on December 7th could not have been more different. A storm had blown in over the west coast of America, and the band of low pressure seemed to have its active edge right above the Mojave high desert plateau. Throughout the day, patches of blue skies fought with rain and clouds, until the end of the evening when the storm finally moved in.

When SpaceShipTwo was finally unveiled, it arrived from out of the darkness of a stormy night. There was dry ice and lighting, but nature threw more of a display than event management ever could. Wind and fog swirled around her as she appeared from the gloom. When Holly Branson (Richard Branson's daughter) smashed a champagne bottle it shattered into thousands of glittering green pieces which were instantly whipped across the runway. Burt Rutan's (designer of SpaceShipTwo) wife said she would be one of those who would be painstakingly picking these off the runway the next day.

I had to leave the party early to write a piece for The Economist. The next morning, Richard Branson told me that the marquee had to be evacuated when they were warned that winds of 115mph were coming. Only a few minutes after the area was cleared the entire marquee, all its contents (lighting and speakers) were blown away. It is very lucky that nobody was hurt. Will Whitehorn, president of Virgin Galactic, told me afterwards that the only thing they found afterwards was the scale model of SpaceShipTwo.

A few days later and Copenhagen, by contrast, is windless. But the political weather is not too far from the gale force winds of Mojave. Walk outs, demonstrations, barbed comments from chief negotiators. What kind of climate deal will the world get from Copenhagen remains impossible to say. Even forestry, where it might be argued negotiations are more advanced and with greater agreement, the text is a mess and still a long way from being done according to insiders.

An interesting side note, one of Burt Rutan's hobbies (when he isn't designing innovative aeroplanes and spacecraft) is climate change. He thinks that the science behind anthropogenic global warming is overblown. I wish I thought he was right about this, it would make everything so much easier if climate change were a fiction. But for it to be true one would have to argue that thousands of the world's scientists, and many of the world's major scientific organisations, are involved in a conspiracy of silence.

Of course all this begs the question, should we be getting off the planet or saving it?

Award for coverage of climate change

Ilya Gridneff of AP Australia and myself have just been awarded a Bronze medal by The Prince Albert Foundation/United Nations Correspondents Association Global Prize for coverage of Climate Change.

The award was made at UNCA's 2009 awards in New York and presented by Ban Ki Moon.

The award recognises our joint work on the subject of forestry in Papua New Guinea in the context of climate change negotiations, and was written in The Economist, Associated Press, as well as within this blog.

How your taxes pay to despoil the environment

One of the many depressing things about overfishing is the extent to which taxpayers fund it through subsidies to the industry.

Rashid Sumaila at the University of British Columbia and colleagues have recently completed a study of how this works for deep-sea fish.

Deep-sea fish are long lived and slow growing, and as a consequence most of them are horribly over-exploited. The team studied the subsidies paid to bottom trawl fleets on the high seas--in other words, those outside of the exclusive waters owned by nations. Fisheries subsidies to these fleets are about $152m per year, about 25% of the total landed value of the fish.

Economic data for bottom trawlers suggest that the profit is usually no more than 10% of the landed value. Without these subsidies, says economist Dr Sumaila, most of the world's bottom trawl fleet would be operating at a loss and unable to fish. Simply cutting this funding would have a major effect on reducing the current threat to deep-sea and high-seas fish stocks.

Think such misspending of your money is bad? It is a drop in the ocean compared to the billions of dollars spent annually that encourage the use of fossil fuels. Cutting fossil fuel subsidies, say studies by the International Energy Agency and the Organisation for Economic Development, would result in a carbon saving of 10% by 2020.

Correspondent's Diary

Full week of my Barcelona diary is available online at The Economist.

The buzz from Buzz

Time magazine has voted NASA's Ares 1 rocket one of the 50 inventions of the year. "The best and smartest and coolest thing built in 2009 — a machine that can launch human beings to cosmic destinations we'd never considered before — is the fruit of a very old family tree, one with branches grand, historic and even wicked.

In a rather hilarious contrast, Buzz Aldrin rather blew the lid on the recent "Ares" launch in an article on Huffington Post on November 9th.

"Yes, the rocket that thundered aloft from NASA's Launch Pad 39B sure looked like an Ares 1. But that's where the resemblance stops. Turns out the solid booster was - literally - bought from the Space Shuttle program, since a five-segment booster being designed for Ares wasn't ready. So they put a fake can on top of the four-segmented motor to look like the real thing. Since the real Ares' upper stage rocket engine, called the J-2X wasn't ready either, they mounted a fake upper stage. No Orion capsule was ready, so - you guessed it - they mounted a fake capsule with a real-looking but fake escape rocket that wouldn't have worked if the booster had failed. Since the guidance system for Ares wasn't ready either they went and bought a unit from the Atlas rocket program and used it instead. Oh yes, the parachutes to recover the booster were the real thing -- and one of the three failed, causing the booster to slam into the ocean too fast and banging the thing up. So, why you might ask, if the whole machine was a bit of slight-of-hand rocketry did NASA bother to spend almost half a billion dollars (that's billion with a "b") in developing and launching the Ares 1-X?" (Read more at Huffington Post)

Kudos to the Space Frontier Foundation for pairing these two items.

Recifed wisdom

So after ten days in Recife, Brazil, the International Commission for the Conservation of Atlantic Tunas (ICCAT) has failed to make significant cuts to the tuna quota.

Certainly, the quota is a great deal lower than last year. But given that some in the industry itself had been arguing for either zero quotas or in four digits, and given the monumental scale of the illegal fish being landed, this is hardly a victory for the adherence to scientific advice. With the bluefin population in a state of collapse, some demonstration of serious concern about the recovery of the species was what was needed.

Instead, we see in ICCAT the usual serious concern about the state of the industry, and what levels of quota will support fishermen. As if biology is a matter for negotiation.

As the industry continues to shrink, year after year after year, we are all paying the price for the loss of this source of wealth from our oceans.

The world now looks towards the CITES meeting in Doha in March next year, when nations will discuss whether to ban the trade in bluefin because its population is in so much trouble.

Earth journalism

Congratulations are surely due to Gerard Wynn and Sunandra Creagh at Reuters for their triumph at the Earth Journalism Awards. At the start of the week, the awards described how Reuters had single-handedly "exposed sharp practice at the office of climate change in Papua New Guinea" and how the head of the office of climate change was "suspended within weeks of the story being published", and how questions have even been asked in Parliament.

The overview of this piece is now in at least its fourth version, having been altered to avoid one libel, and (I suspect) one repetition of a claim that is almost certainly known not to be true. What is more important to someone who has been reporting on this story since the beginning, and for the last six months, is that the most recent changes on the awards site now offer a small acknowledgment of my work in The Economist.

Thank you to everyone who supported this.

At this point, I think it is also important to recognise, Ilya Gridneff of AAP Port Moresby who has also written up a storm on this subject over this year. Ilya has recently won an award from the Asia Pacific Forum of Environmental Journalists for excellence in science journalism for all his work.

As for the Earth Journalism Awards, you can vote for your choice of overall winner of these awards here and/or leave comments on the entries. The current overview of the winner of the forest award follows:


Forest Carbon Market Already Shows Cracks
Wynn, Gerard & Creagh, Sunanda
Reuters.com (2009-06-04)

This article exposed sharp practice at the office of climate change in Papua New Guinea (PNG) in the use of funds to protect rainforests. UN climate talks and a prospective U.S. climate bill have laid the foundations for a scheme whereby rich countries pay tropical countries to protect their rainforests and in return earn carbon offsets to help them meet their greenhouse gas emissions targets. But development and environment groups have warned that multi-million carbon deals already taking place in advance of such a deal threaten to stoke corruption and land grabs.Reuters in May ran an exclusive report using leaked 2008 papers which showed that the director of the office of climate change had endorsed a $10 million donation to the office from Australia-based carbon brokers. In return, that deal would have given the brokers exclusive rights to sell the carbon stored in vast swathes of the country's forests even though these are owned by the thousands of people that live in them. Reuters obtained a face-to-face interview in Bali with the director of the office of climate change who confirmed the authenticity of the papers. The report raised concerns of questionable practice in emerging forest carbon markets in Papua New Guinea. Shortly afterwards further news of misdeeds at the Office of Climate Change emerged in The Economist. Both these stories resulted in the Head of this office being suspended. The Reuters story was published as negotiations progressed to include a rainforest carbon market in a global deal to be agreed in Copenhagen in December.

No deal at Copenhagen

The ticking clock display at Barcelon is appropriate, as time has run out. The news from the floor here at Barcelona, and also appearing in media outlets, is that we will get no legal deal at Copenhagen. Yves Boer had said at the start of the week that it was possible, but four days on and it is apparently not so. This view is being echoed by UK's David Miliband, and others. The only option now is a political deal of some sort, we are told.

Conveniently, there have been negotiations over a political deal for some time, outside of the UN. Was it always going to be like this? Did we just have to wait long enough for the politicians to say that time had run out, so they could come and save the failed UN deal with a political fudge?

At the end of the day the negotiators here negotiate according to a political mandate. If a legally binding deal had been wanted by all the key countries then more progress would have been made.

Barcelona and Copenhagen

So we are on the final stretch to Copenhagen climate change negotiations. Next week, climate negotiators meet in Barcelona, the last stop before Copenhagen. Reducing carbon emissions from deforestation (REDD) will be high on the agenda.

I'll be chairing a REDD event hosted by the World Economic Forum, on Monday evening (see details below). In December, I've also agreed to chair a plenary discussion on forestry in Copenhagen hosted by the Center for International Forestry Research, the Collaborative Partnership on Forests and the Government of Denmark. More about this event closer to the time.

Anyway, if you are going to Barcelona, you'll find me at this event at 19.15, which is being held at the Fira Congress Hotel, Meeting Room 1, Barcelona. Which is across the street from the Southern entrance of the main Congress Centre).


Solving the REDD Puzzle
Parallel public side event to the Barcelona round of the UNFCCC negotiations
Hosted by the World Economic Forum Climate Change Initiative in collaboration with the Sustainable Amazon Foundation


Forest-based mitigation through a mechanism such as REDD+ is a critical component of any global climate change solution, offering a significant win-win abatement opportunity equivalent to as much as 25% of required emission reductions by 2020. Important questions remain however regarding how to practically catalyze such abatement not only in terms of the required enabling policies at the international and national levels, but also on a range of critical issues such as how to finance REDD+ and readiness activities, integrate forestry into the carbon markets, and build robust MRV systems to ensure environmental and social integrity.

Building on recent reports by the World Economic Forum and the Global Legislators Organization for a Balanced Environment (GLOBE International) among others, this session will bring together key government officials with leaders from civil society and the private sector in a constructive dialogue on the best designs for putting together these various pieces of the REDD puzzle. This interactive session will begin with a keynote address with a proposition for how to solve this puzzle, followed by reactions and comments from the high-level panel and the audience. This session aims to engage the broad set of stakeholders required to solve the REDD puzzle and map a practical path forward to this end.

Opening Speaker:
Virgilio Viana, Director, Sustainable Amazon Foundation, IIED Fellow, Brazil

Ralph Ashton, Convenor and Chair, Terrestrial Carbon Group, Australia;
Federica Bietta, Deputy Director, Coalition for Rainforest Nations, USA
Adam Matthews, Secretary General, Global Legislators Organization for a Balanced Environment (GLOBE) International, UK
Graeme Sweeney, Executive Vice President, Future Fuels and CO2, Shell, UK


Updated with revised location and final panellist list. November 1st.

Satellite highs and lows

I worked on a couple of pieces published recently in The Economist on satellites (the second appeared in the Business section). I think the continued problems with America's NPOESS program are significant for us all, wherever we live. We all rely on the data from Earth observing satellites, even if that is invisible to us in our day-to-day lives. Whether it is predicting the course of hurricanes, or the effects of climate change, earth observation matters.

The White House has a big challenge on its hands. Any changes to the NPOESS programme which is currently facing a significant chance of failure will cost money. And Congress is mightily sick of being asked for more money to make NPOESS work. The solution is difficult for everyone to swallow but it is simply to put one agency in charge of the programme (in my mind preferably NOAA because it will improve the data we get), and simply swallow any extra cost. It might help if the contractors were paid on delivery as well.


Satellites in the alphabet soup

Oct 15th 2009
From The Economist print edition
America’s next generation of Earth-observation satellites is in trouble

WITHOUT satellites, both forecasting the weather and studying the climate would be a lot harder than they are. Such satellites, however, need replacing from time to time, and those used by the Americans are coming to the end of their useful lives. Unfortunately, the plan for their replacement is in chaos. Indeed, the National Polar-orbiting Operational Environmental Satellite System, NPOESS, as the replacement system is known, has suffered so many delays and budget increases that its whole future is in doubt. If things go badly wrong, crucial data about the climate could be lost. (More)

Beaming

Oct 8th 2009
The spread of satellite television bolsters a once shaky business


EARTH may have been hit hard, but the recession, it turns out, has not done much damage in space. Turnover among operators of satellites in geostationary orbit (GEO) grew by 7-8% last year, according to Northern Sky Research (NSR); analysts at Euroconsult, a rival research firm, put the figure even higher, at 11%. The three biggest firms in the business—SES, based in The Hague, Intelsat, based in Washington, DC, and Eutelsat, based in Paris—brought in combined revenues of over $6 billion. SES and Eutelsat boast profit margins of over 25%. NSR predicts that in the next decade the business of leasing satellite capacity will grow by an average of 4.3% a year. (More)

Kond words

Ilya Gridneff who works for the Australian Associated Press (AAP) in Port Moresby has broken a number of excellent stories on the whole Papua New Guinea forest carbon saga. A few days ago he filed another fascinating chapter in the saga, which you may not have had a chance to read as it was not picked up by the papers*.

Its a fascinating story, Carbon Planet has been paying a company called Nupan which has then been paying the vice-president of the country's ruling party, James Kond, as a consultant who offers to "assist you to secure endorsement of these projects for carbon trading from the PNG government".


By Ilya Gridneff

PORT MORESBY, Sept 24 AAP - A Papua New Guinea governing party power broker was paid 200,000 kina ($A85,000), ultimately funded by Australian environment firm Carbon Planet, for "consultation" on carbon trading deals central to a pending investigation.


James Kond, PNG's ruling National Alliance (NA) party vice-president, received the money on May 14, 2008, as part of Carbon Planet's $1.1 million spend with companies in PNG for carbon projects they predict are worth a billion dollars a year.

Documents obtained by AAP show Carbon Planet's money went through Hong Kong-based company Forest Top, that then paid a number of entities including Australian businessman Kirk Roberts and his PNG company Nupan and its local facilitator Kond.

On April 16, 2008, Kond signed a memorandum of agreement with Forest Top, Roberts and Nupan assuring his work would earn him "10 per cent of the net cash flow generated from carbon credit sales".

Kond's Western Highlands Province-based business Koo management was: "to liaise with and advise the PNG government" on Nupan's deals that Carbon Planet would then broker for the global voluntary carbon market.

Kond stands by the deal and says there was no conflict of interest.

"It is a confidential business arrangement and none of your business about the way we do business," he said.

"I've been deputy NA leader for 10 years and doing my part to improve PNG and to help policy (and) there is no need for these investigations.

"I have not dealt with Carbon Planet, I invited Kirk (Roberts) to PNG and receive money from Nupan as their country representative."

Adelaide-based Carbon Planet declined to respond to questions.

Kond's other Nupan responsibilities included: "to bring together all of the parties and other persons required to achieve the commercialisation of the carbon credits from the specific present and future projects in PNG".

In a series of letters obtained by AAP, Kond writes to Roberts on December 28, 2007, suggesting PNG's Kamula Doso forest in Western Province and April Salome forest in East Sepik as potentially lucrative future carbon trading sites.

"I will personally be there to assist you to secure endorsement of these projects for carbon trading from the PNG government as I am part of the PM Somare government through being an executive member of the NA ruling party that has direct influence on shaping government policy," he writes.

In February, 2008, Kond urges PNG Prime Minister Michael Somare to meet him and experts from Australia.

"I am delighted to inform you we have already secured two projects for this carbon trading program," he said.

"I am now seeking a formal appointment ... to brief you on this matter."

Somare's media spokesperson Betha Somare, who has seen the letters, said: "The PM has never met Kirk Roberts or his associates".

AAP understands PM Somare's then chief of staff Theo Yasause met Roberts and also met several members of Carbon Planet.

Yasause later became PNG's Office of Climate Change (OCC) director but was suspended pending an investigation that includes why the office went bankrupt in less than a year of operating.

The investigation will also delve into a series of "sample" carbon trade documents Yasause signed as OCC director as well as a mandate to assure international carbon deals.

Acting OCC director Wari Iamo in a newspaper advertisement on August 31 said PNG was waiting for United Nations endorsed carbon trading rules, expected after the Copenhagen climate summit in December.

"Carbon trading agreements cannot be legally signed over these (PNG) lands until the government has put in place an appropriate policy and legal framework," he said.

Carbon Planet in July announced a merger with Australian publicly listed company m2m Group, saying they had 25 potential carbon trading projects in PNG that could generate $1 billion a year.

But Carbon Planet has not said where their PNG projects are, what the landowners benefits are, nor do they recognise that the 800,000-hectare Kamula Doso forest is subject to a court injunction on projects.

Carbon Planet's merger with m2m is "continuing with some delay arising from the complicated and novel circumstances of this emerging industry," m2m said in a statement.


AAP ig/mo/cdh

* A note about Wire Services
To explain, Gridneff's employer AAP is what is known in journalistic lingo as a "wire service" or news agency. Other well-known agencies include Reuters, Press Association and Agence France-Presse. With correspondents around the world these agencies provide, electronically, wholesale news for their subscribers -- the world's main retail news companies (newspapers, radio and television), who may then chose to publish it.

Last gasp for the forest

This Friday, The Economist published my three-page feature on avoided deforestation. Avoided deforestation is a hot topic these days as climate negotiators have enthusiastically taken up the idea that reducing the rate of deforestation the world can make a substantial dent in global carbon emissions.

For most of those at the coal face of these things, the feature only really grazes the surface of major unresolved issues. But the point of the piece is to introduce a wider audience to the idea of REDD and some of the issues it faces.

As with most pieces of this size and scale there is a substantial tranche of overmatter to follow on this blog. A great deal was left on the cutting room floor. I've picked up some helpful material about Waxman-Markey, and also quite a lot about palm oil which is, frankly, quite depressing. But for now, here is that piece itself. You can follow the link to read it at The Economist.

The conclusion I reach about REDD, for anyone who doesn't want to read the entire article is merely that paying for environmental services is basically a good idea, but whether it is going to work to deliver global carbon emissions reductions will really depend on whether we can get a lot of little details right. That remains to be seen.

I also take the point made to me by several people I interviewed, which is that if we decide it isn't going to work, then it absolutely isn't. My view is, lets give REDD a chance to work. Scary to think that it is one of the better options on the table.



Last gasp for the forest

Sep 24th 2009

A new climate treaty could provide a highly effective way to reduce carbon emissions by paying people to not cut down forests

IN THE south-eastern corner of the Brazilian state of Amazonas, in the municipality of Novo Aripuanã, there is thick forest cover—for now. But as new, paved highways are driven into the trees, illegal loggers inevitably follow. At the current rate of deforestation, around one-third of the forest in Amazonas will have been lost by 2050, releasing a colossal 3.5 billion tonnes of carbon dioxide into the atmosphere. (More...)

Bluefin de siècle

It gives me absolutely no satisfaction to report that my previous posting about the stinky politics of bluefin tuna turned out to be entirely accurate. European nations failed to vote for a proposal to list the bluefin tuna as an endangered species on Monday.

Lets roll back to July, when President Nicolas Sarkozy made a fine speech calling for a ban on the trade in bluefin tuna. How, then, is it that France was one of the six nations that did not support a ban in the trade of this species? I do hope that Prince Albert of Monaco, who recently had the insight to ban the sale of bluefin in the principality, will not be inviting the President and his wife out for sushi any time soon.

21 other European nations supported the ban. Those that opposed were Malta, Cyprus, Spain, Italy, France, and Greece. [see update]

Its a common myth that journalists have to balance a story. In fact, we are supposed to report the truth. Balance is only really useful if you have no idea where the truth lies. (This is why, for example, the media was engaged in a long struggle that is now over, over whether to "balance" stories about climate change.) In this case the truth is that this decision by these six nations is just simply wrong and Europe's politicians have failed yet again to do their jobs.

Its not just France. Last year we had the Spanish and the Japanese strutting around at an international conservation meeting (IUCN) claiming to support a ban on the trade in bluefin--presumably because it was good public relations to be seen to be doing something at this forum. A year later we have to swallow the stomach-churning hypocrisy of the behind-the-scenes work of the Japanese lobbying Europe hard against the ban, and the Spanish trying to organise outright opposition. (Do the delegates to these meetings not mind being made to look like idiots for backing a policy that is undermined behind the scenes by the rest of the government?)

How can this happen?

In trying to fathom it out, I am reminded of an episode of the hit US series Ugly Betty when Marc takes a female date with him when he meets his parents in order to conceal the fact that he is gay. In the slang, the female date was his "beard" to make him look more masculine.

I guess what this is all leading up to is that I'm wondering is whether all these big announcements that governments are going to save the bluefin are actually little more than "green beards" which seek to conceal the true orientation of their governments. (I would invite others to nominate their politicians for "green beard" awards in this vein, for politicians who make big environmental announcements but who actually do the opposite behind closed doors. It can easily be accomplished with an impish attitude and a copy of Photoshop.)

I have to say, if the green beard is the explanation for all these 180 degree turns in policy then it must be very disheartening for the civil servants working in the environment departments of various ministries around the world to find themselves being used as PR flunkies for bad environmental policy.

Instead of helping, they are promoting the idea that their government is doing something meaningful, responding to public pressure, when the government is quietly doing the exact opposite behind the scenes.

Luckily there is still hope for a bluefin listing. Although the niceties of the convention on endangered species dictate that "range" states be the ones to propose a species for listing there are a number of other range states that might decide to step up to the plate. These include US, Canada, Brazil, as well as Norway and others. The bluefin tuna has stocks in both sides of the Atlantic. And while the stock on the American side is not collapsing as badly as that of the stock on the European side, bluefin do travel between the two stocks and it is impossible to differentiate between them at port. So any of these states are within their rights to put the bluefin up for a CITES listing now that Europe has failed.

Wouldn't it be ironic if Brazil were to propose the bluefin for listing? Brazil, which is constantly being lectured about protecting its vast biodiversity and rainforests by northern Europe. How delicious if it had to step in to protect one single species simply because the politicians in Malta, Cyprus, Spain, Italy, France, and Greece are too spineless to do it. [see update]

At the moment there has been a bit of a waiting game with everyone waiting to see what the Europeans would do. Well, governments of Norway, Canada, Brazil and America, lets get this job done. ICCAT is embarrassment to everyone.

Please do not make me report again on this farce of a meeting next December knowing that its closed door backroom deals are all that stands between the bluefin and extinction for the next two years.

Update:

1. Portugal changed to Greece throughout. Portugal surprisingly voted for a ban. Just goes to show, you can't trust everything you read in the newspapers.

2. please email me your nominations for the best "green beard" awards for politicians who advocate green policies but do entirely the opposite elsewhere or behind the scenes.

3. I have corrected the confusion between the eastern and western side of the Atlantic. 25.9.09

Fishy politics that stink

It is time for European nations to finally show leadership and ban the trade in tuna

LATE tomorrow morning in Brussels an important meeting takes place for the bluefin tuna. It could well decide the fate of the species, and whether it is going to be fished to extinction or at last protected from the overexploitation that has caused its population to crash to unprecedented lows. The northern bluefin tuna (Thunnus thynnus) is classified as critically endangered for the Western Atlantic stock and endangered for the Eastern Atlantic stock 1,2.

It is an appalling story. Historically the bluefin has been tragically failed by a group of nations that collaboratively manage the fishery. The organisation known as ICCAT (The International Commission for the Conservation of Atlantic Tunas) is supposed to manage the fishery but in reality it is little more than set of paper pushers in Madrid for the nations that meet every December. Every year, behind closed doors, the member nations hand themselves quotas far in excess of scientific advice. These quotas are handed out in the knowledge that Europe’s fishermen will then go out and catch more than double this allowance through illegal landings in the poorly managed fishery.

Bluefin politics are ugly because all these deals to allow the hunting of a species to extinction are done behind closed doors and in order to eward a vocal but powerful political group—fishermen.They have allowed the economically irrational over extraction of a resource, and essentially stolen fish that belongs to all of us and given it to a handful of people.

For a long time, Europe’s tuna fishermen have had things nicely wrapped up. The tuna fishing interests of Italy, France and Spain would lobby the Commission’s directorate general of fisheries, which would say nice words publicly about bluefin conservation, monitoring and management and then go out to ICCAT every year, and then negotiate another deal that was disastrous for the fishery.

Matters came to a head last year when the chair of ICCAT warned its members that if they didn’t show some leadership then management of the species would be taken away. Such calls were in vain. So now the world looks towards a trade ban under a convention known as CITES in order to protect this fish. While the bluefin easily qualifies (such is its level of imperilment) if only that were enough to make sure that could be protected. Politics, as ever, intrude.

The first step for the bluefin is for two members of the CITES to propose a listing before a deadline in October. Monaco the Mediterranean principality, under the leadership of its bluefin-loving Prince Albert, was the first to step forward. Now the world is waiting to see what the Europeans will do. At first the news was good, France threw its weight behind the plan, to the surprise of conservationists President Nicolas Sarkozy supported an end to the overfishing. Britain, Germany and other northern European states have supported a ban. So after some political warfare in Brussels between the department involved in ‘managing’ fish and the department involved in environmental protection, and some heavy lobbying by the sushi-loving Japanese, the Commission decided that a proposal to CITES was appropriate 3.

It is with regret that I write that I now understand that the vote on Monday is far from a formality. Rumour now has it that the French are now backing away from a full CITES listing, and the Spanish are trying to organise outright opposition.

Meanwhile, fresh evidence has emerged of how completely out of control this fishery is with illegal fishing continuing unabated, a French vessel has recorded some astonishing abuses by the Turkish fleet. The management measures that were supposed to protect the bluefin are not working.

All this underscores the need for a trade ban. Trade bans are not always the solution for an imperilled species, as they create some crazy economic dynamics such as an illegal trade dominated by organised crime. And on land a ban eliminates the value for a species and can in turn encourage habitat conversion. But habitat conversion isn't a problem for the bluefin, and organised crime is already heavily involved in the bluefin trade. So CITES is the only serious tool left to allow the international community to address the needs of a species that lives outside of the control of national governments. It is no longer reasonable to argue that ICCAT can be trusted with a job that it has failed so long to perform.

Furthermore a ban would, finally, prevent the fashionable diners of America, Europe and Japan to keep consuming the species with a clean conscience or blissful ignorance. Nobu restaurants around the world would finally be forced to remove the bluefin from the menu. Others would follow.

If European nations fail show leadership over a CITES listing, it may be that the only hope is that the Americans will step in. The politics are not straightforward, as Jane Lubchenco, head of America's National Oceanic and Atmospheric Administration, said when I asked her about this a few weeks ago, there are concerns about how a CITES ban would affect the domestic bluefin industry in America, where the situation is not as disastrous as in the Meditteranean.

Nonetheless, it is clear that the Americans are watching the Europeans very closely indeed and waiting to see how its hand plays out. At the Bali conference on climate change in 2007, America was warned that it was either to "lead or get out of the way". That message should now be delivered to the Europeans over bluefin.

Introducting Graham Corby

In April this year, when I first began working on carbon credits, I had copies of two lots of irregular carbon credits from Papua New Guinea. One was the Kamula Doso series which had been recently issued to Nupan Trading, owned by Kirk Roberts. The other set, the 'A' series dated back to 2005 and had been issued by a company called ClimateAssist, seemingly with the backing of the government.

Support for the apparent backing of the government in these credits came from a signature on the credits that appeared to be by a government minister, and an associated letter that gave the company ClimateAssist the right to monetise these carbon credits on behalf of the government.

The company ClimateAssist is in fact an Australian gentleman called Graham Corby. I spoke with him several months ago. The first thing to say is that if anything in what follows remains unclear this is not for lack of trying on my part. Mr Corby has failed to follow up on his promise to send me more information about his carbon credit generating scheme, and since I published his carbon credits, doesn't want to talk further about his business. But he told me plenty in April, so lets begin with that, because I sense I am not the only person interested in his activities at present.

Mr Corby claimed he was assisting Papua New Guinea in the sale of these carbon credits. The idea he said was to "use some of the credits to do projects up in Papua New Guinea". He told me, "The Papua New Guinea government gave us the credits and made us the brokers to monetize the credits." So I asked Mr Corby, what does it mean, exactly, to monetize the credits? Does it mean to sell them? He said, "Yes and no. There's companies that want to loan money against the credits and they want money back after the projects are finished". He continued, "Some companies want to buy them, but they're not in a position to buy them until the REDD thing comes in with Copenhagen at the end of the year. But other companies are looking at lending money to us to do the projects and then we pay them back over a four year period." In other words, the credits being offered were printed prior to any actual project to produce carbon emissions reductions.

Mr Corby agreed that the credits I had were his, and had been used to start his business, but that they had changed dramatically over the years. "We couldn't get them into trade or anything like that. And I had to go back to Papua New Guinea, it was 2007, and get others issued, and then I went back in 2008 and we got the last original ones issued". The serial numbers are the same, he added. "Because we couldn't do anything with the first two lots".

What was wrong with the original lots I asked? "Companies I was working with were not in a position to put funds there. Once Australia signed and ratified the protocol last year, we got new ones issued and the power companies actually took them as voluntary credits against the Australian government fining polluters". He added, "well they haven't bought them. They're in the process of lending money to us. They won't buy them until Copenhagen".

Have you paid the government of Papua New Guinea for these credits, I asked? "...We haven't paid them because we haven't sold them. And we, until Copenhagen comes into force we can't get any of the loan funds. But once it does come in then we'll have the loan funds to do projects there. What we've been doing has been on our own initiative and our own funds"

I'm confused, I say, how is it that the government can issue credits before they're actually generated?

Mr Corby: "They're not issuing them. ClimateAssist is issuing them on a voluntary basis from company to company"

Me: Right.

Mr Corby: "It's a company to company deal."

Me: "Are you allowed to do that?"

Mr Corby: "Oh yes. It's voluntary participation."

Me: "Right, so because the company, the power companies are voluntarily saying that they'll voluntarily buy them from you, then it's OK for them to be credits that haven't actually been generated?"

Mr Corby: "Haven't been generated until Copenhagen. Once that's been. Once Copenhagen is in then we can go back to the government and say right, you've got them there, here's the money, and generate the true credits that aren't voluntary."

So there you have it, once Copenhagen has come in, Mr Corby will be able to go and generate the "true credits that aren't voluntary".

So what about money? How much does he think these deals would be worth? Mr Corby said, "at the moment we've signed a joint venture agreement with one company and we're, we have sold them for $12 USD a tonne." You'll have to do the maths for me, I've no idea what that is, I said. He replied, "Eh – It's huge. I haven't got that in the brain, It is huge. " As for the project deals he says, "There's one that's 50 million USD, another that's 32 million, and another that's 27 million". (If you look at the notes on these "credits" one set claims to represent 87,460 million metric tonnes of carbon, the other 33,333,333 million metric tonnes.)

Mr Corby said that no money had passed hands between his company and government officials, adding that there was "a financial arrangement that if REDD comes in we would provide money for that office to operate". (This claim was first published by Reuters just prior to my first article on the subject, but as yet it remains unverified as to whether any such arrangement was ever actually officially agreed to by the government of Papua New Guinea.)

So what are all these carbon avoiding projects that Mr Corby is working on? There are projects all over the country he claimed but would not say where. He said some involve coffee projects where coffee is planted in the forest, instead of outright deforestation, another involves planting trees for the paper industry so that government doesn't have to cut down trees in the forest, and there is even a palm oil project. Are they REDD projects I asked? "They will be REDD projects if the Copenhagen summit is ratified. If it is not, then these projects are projects that can produce funds to pay back the companies that are investing with us".

Mr Corby seems to be arguing that various projects that would be financially viable in their own right, might also qualify for REDD credits if the deal is done in a particular way at Copenhagen. For example, I asked him why he would get carbon credits for planting trees for the paper industry, he said that two would be planted and only one would be used to make money. "The other tree stays there for eternity".

The international community is very keen on 'learning by doing' as a way of figuring out REDD, but I can't imagine that these are the kinds of deals that everyone had in mind. And is this part of a broader concern about creating the perverse incentives for cutting down forests and putting in plantations?

Finally, before everyone rushes in to blame the government, I think it is worth reminding ourselves that in June, The Office of Climate Change in Papua New Guinea added to the story by issuing a statement about Climate Assist saying:

"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 lawyers pursuing this matter with foreign law enforcement agencies as a matter of fraud. As such we cannot comment further on it." I've also received information which backs up this notice in the form of a cease and desist notice issued late last year by the Office of Climate Change to Mr Corby.

N.B. These credits were first issued prior to the creation of the Office of Climate Change, so the statement doesn't actually answer the question of whether someone in government did become involved in promoting the brokerage of credits through Mr Corby as early as 2005.

I think the final word in this very curious, and opaque story, must go with Mr Corby himself:

"We are issuing voluntary credits between my company and other companies. That's why we have to give the money back to the other company. But these companies then go to their government and say we're supporting these projects, and they then are given a breaks from their government because they're supporting something that's green." Mr Corby went on to explain that these were power generating companies, two in Germany, one in Canada, and two in Japan. He wouldn't be specific about which companies these were and said that they would only discuss these deals after Copenhagen."

Kirk Roberts rides again

The story so far... dodgy carbon credits purporting to represent forest carbon and signed by a government minister appeared in Papua New Guinea a few months ago. The credits caused consternation around the world, as nations prepare to do an international deal over forest carbon at the climate talks in Copenhagen. But a number of things have never been entirely clear. How much carbon, and how much money, the companies involved in these deals think they are handling in the country and what, exactly were those dodgy carbon credits used for?

Dramatis Personae

Kirk Roberts -- Nupan Trading. Dubbed the Kingpin of the carbon cowboys. Buyer of carbon credits from Papua New Guinea landowners, self proclaimed “one of the most important foreigners in PNG”. Former professional show-jumper, licensed horse trainer who was fined for doping a racehorse and instructing a vet to withhold veterinary records.

Dave Sag -- chief executive of Carbon Planet. Carbon Planet is the Australian carbon brokerage that wishes to sell forest carbon offsets to individuals, corporations, banks and governments.

Wari Iamo -- acting head of the Office of Climate Change. Dr Iamo is conducting the investigation into what went wrong previously in this office, and to pull together the country’s strategy for Copenhagen by November.

In today’s Sydney Morning Herald are two extremely illuminating articles about our drama so far. In one, Kirk Roberts has claimed to have power of attorney over 90 forestry deals in Papua New Guinea, “giving him control over land potentially worth tens of millions of dollars”. He has declined to give any information about how these deals were done, and what landowners understood by them.

But in the second article, Dave Sag finally spills the beans about the dodgy carbon credits. What were they for he is asked? Mr Sag says that Mr Roberts had used mocked-up carbon certificates signed by Mr Yasause as "props'' when negotiating with landowners, but he denied they were intended to mislead.

Quote from the article:

He said the documents, which purport to represent a million tonnes of ''voluntary carbon credits'' issued by the UN under the Reduced Emissions from Deforestation and Degradation - or REDD [Reduced Emissions from Deforestation and Degradation] scheme - were created by PNG officials simply to explain the scheme. ''Those certificates are worthless. … No one who knows anything about carbon would take them in any way seriously,'' Mr Sag said. ''They ended up in Kirk's hands because they would have been produced as a prop to be taken out and waved in front of people in order to provide some physicality to what is essentially an ephemeral thing.''

Readers ought to judge for themselves whether or not these credits were intended to deceive. It is true that nobody who knows anything about carbon would take them seriously, but I guess the point is that the landowners certainly do not know very much about carbon at all. The story then goes on to report that one landowner claimed he was co-erced into signing a deal. And Wari Iamo calls plaintively to landowners not to sign any more agreements with private companies until after Copenhagen.

But what about money, the Sydney Morning Herald reports that “Carbon Planet, which has acquired a publicly listed company, told investors recently it had $100 million in potential REDD projects in PNG, which is an order of magnitude larger than what Mr Roberts was claiming.

However, more privately, in a document I’ve obtained that was created by Carbon Planet, their business model is illuminated. In it, it claims: 25 REDD Projects have been contracted at $1 billion per annum to date. (These are probably Australian dollars but it isn’t entirely clear).

I guess the disparity between these figures could depend on a number of factors (an over-active imagination being one of them). More seriously, some of them could refer to turnover, how much money would pass through the hands of these traders and brokers, the other could refer to their cut. Seeing as we don't know what percentage of any carbon deal that Mr Sag or Mr Robert's company is getting we don't really know what they hope to make on the deal.

But lets imagine for a second, that this figure of a billion turnover is in some way accurate. Even if the companies concerned were to return most of this money back over to the landwoners, even if they only took a 1% fee this would amount to over $10m a year. If they took 10% they would make $100m. All from an initial investment of $1.2m Australian dollars. Quite a punt.

The Carbon Planet business model also claims eight REDD memorandums of understanding have been contracted in Indonesia, at $600m per annum. In addition they have five CDM projects at $76 per annum expected in 2009 in Pakistan. The company is also working on securing carbon credit projects in Africa, Australia, Azerbaijan, Peru and South America.

The idea then seems to be to create “REDD” projects for carbon and biodiversity credits and sell these onto the voluntary market after certification through the various standards that are emerging. These certified credits will then sell these on to trading organisations, climate change consulting and accounting firms, PR, Advertising and Marketing firms doing Corporate Social Responsibility programs, and direct to banks, governments, corporations and traders.

I guess the real worry is that in the rush to do something about carbon emissions quickly and cheaply, when push comes to shove, how much is it really going to matter what a landowner who cannot even read or write understood about his land when he signed a cross on a piece of paper?

I am a top foreigner in Papua New Guinea, says carbon kingpin

MARIAN WILKINSON AND BEN CUBBY, Sydney Morning Herald

September 4, 2009

Australian firm linked to PNG's $100m carbon trading scandal

BEN CUBBY AND MARIAN WILKINSON

September 4, 2009

p.s. a name check also to Ilya Gridneff the AAP wire reporter who did a lot of the legwork that ended up on the front pages of the Sydney Morning Herald this morning.

Updated September 11th, 2009. "Sidney" changed to "Sydney" throughout. Apologies.

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.

Consenting adults

In recent weeks, a number of fascinating discussions have been held across several websites that have helped to further unravel the story of forest carbon deals in Papua New Guinea. This has helped to throw some light onto a process that had formerly been going on behind the scenes, and at least allow some level of public scrutiny. See "Carbon trading under more scrutiny", and check out the comments. What is so informative about this discussion is that involves a discussion between some of the main players in private forest carbon projects in Papua New Guinea: Carbon Planet, local journalist Ilya Gridneff and at least one of the representatives of the landowners involved in a carbon deal in Kamula Doso. This conversation is also picked up by Chris Lang of REDD Monitor.

Most of those involved in negotiating over the scheme known as Reducing Emissions from Deforestation and Degradation (REDD) say that rules and regulations should be properly set before a market for these forest carbon credits is introduced and traded. But holding back the private sector from doing deals in advance of Copenhagen is impossible.

While REDD policy wonks debate about whether it should work at a project level or a national level, the private sector is busy answering this question buying up projects all over the place. Instead of a national baseline for deforestation that the government tries to minimise, bits of forest here-and-there are being tied up in deals. And you can't simply blame 'carbon cowboys'... charities and environmental NGOs are all doing project level deals as well. How will these project level forests avoid 'leakage' and the movement of forest destruction to other areas of the country? They probably won't, which makes them a concern and which is why people argue about whether REDD should work at a project or national level.

One question that crops up again and again in forums discussing carbon trading in Papua is the question of how such trading is possible and what laws allow it? The answer appears to be quite deceptively simple. The laws that allow forest carbon trading are as simple as those that allow me to sell you any piece of property that I own. Indeed, I could sell you the spirits in the trees, if you were convinced I had the ownership rights to them and could transfer this ownership to you. And this is in essence what is going on in Papua right now, as well as in a number of countries around the world. For all the talk of REDD and carbon markets in the future between nations, the deals done right now and carbon being traded, seems to involve just a voluntary market between individuals and corporations. The market that offers you ways of offsetting your aeroplane flights, or car journeys.



Where does REDD come in? Well the idea is that when Copenhagen arrives, a deal over REDD would create a large and valuable mandatory market. A highly regulated market where governments would be obliged to buy forest carbon credits in order to offset their pollution--mostly from power generation. It seems there is an expectation that these voluntary agreements being done right now could somehow be turned into some kind of REDD credits and traded on that market. (The term of art is that they would be 'fungible'.) And even if official trading doesn't begin for years, just the creation of REDD at Copenhagen would stimulate the market to produce options to deliver REDD credits. (There is also Waxman-Markey bill in the US, which will allow forest carbon to be traded a lot sooner.)

So the point about these deals is that entrepreneurs are betting that the voluntary credits they are developing today will be transferable to forest carbon credits that can be upgraded and traded on the grown-up markets for more money later down the line. And while that speculation might be unhelpful at this stage, far bigger risks have been taken in business for far less potential reward. So it isn't unexpected. Furthermore there is the attraction of potentially huge profits. In some countries, in some parts of the world, the cost of conserving an acre of rainforest is ludicrously low compared with even low estimates of the vale of the carbon per acre. That is sort of the point of a market, is that the private sector finds the cheapest ways to conserve carbon. The trouble is that this is never going to be a normal market, its a highly regulated market created by national and international legislation in order to achieve a public good. The public will simply not be comfortable with massive windfall profits for a few entrepreneurs, or even the landowners themselves. There is already an idea floating around that such profits need to be taxed, and put into other carbon avoiding projects.

Although it is hard to know exactly what is going on, I think it might be valuable to conduct a thought experiment. Lets imagine that I've got a couple of thousand dollars I want to invest in Papua New Guinea forestry in a credit project. How might I go about doing this? Well for a start, I don't actually want to buy anything physical like a forest. I want to buy the rights to trade. And I want to part with as little money as possible initially, because I want to buy as many rights as possible.

I start a whirlwind tour of the provinces, the further the better. I make friends with the landowners and sweeten them up with cash and gifts. I explain that the world needs to conserve forests because of something that has been put in the atmosphere, and that I'll act as a broker for them to make sure they get the best deal. I'll take a percentage, and maybe a fee.

I sign deals with the landowners that gives me the sole rights to negotiate and sell carbon on their behalf. All I have to do now is hire a few consultants to boff out a few reports about how big the trees are and how happy all the locals are, and I'd be very nicely set up to do a massive post-Copenhagen deal. What is more, if the consultant's reports look particularly convincing, I might even be able to recoup my initial investment at a very early stage by getting further infusions of investment by selling off a portion of my rights to someone else, perhaps in the form of some kind of option for REDD credits. With more cash in hand, I go off again in search of more rights to buy.

What makes all this even more fabulous a proposal is that if anyone complains about what I am doing, or questions its transparency or processes, I can cite commercial confidentiality and then complain to all and sundry about how all I am trying to do is save the world and give local people some kind of way of surviving without cutting down their trees. I'm a good person and all these horrid people just want to make me out to look like I'm doing something wrong.

Some of these deals may be absolutely fine, we just don't know. What we need in Papua, and elsewhere, is some way of publicly notifying these deals. A simple way of doing this would be government-backed project deal webpages, lots of them. Proposed forest carbon deals should be published on them, so that if any landowners feel there is something awry, or there are competing claims, this should be immediately apparent, and these claims should be published. Kamula Doso is a legal nightmare. We don't want more of these cases. This is not simply private business. All these companies want to sell credits on the mandatory markets. Its going to be our money that is buying these credits. We have a right to more information. If companies want privacy over their deals, they have to guarantee that these credits will not be traded on mandatory markets. Its a small price to pay for access to a billion dollar public market that is ultimately paid for by higher taxes and fuel prices in developed nations.

Finally, given that there is a legitimate public interest, we really do need to know what the landowners understand by these deals and what they've been told. In medical research a concept that has developed is "informed consent", it isn't just enough for a subject to say yes to an experiment or procedure, you have to be able to provide proof that the people who have agreed have sufficient understanding of what they have agreed to.

I wonder if this might be a useful concept for these environmental deals with local landowners. Here is a standard web definition:

"Informed consent is a legal procedure to ensure that a patient or client knows all of the risks and costs involved in a treatment. The elements of informed consents include informing the client of the nature of the treatment, possible alternative treatments, and the potential risks and benefits of the treatment. In order for informed consent to be considered valid, the client must be competent and the consent should be given voluntarily"

In conclusion: More transparency over deals. Where they are being done, what financial arrangements and promises have been made, and what the landowners really understand and have been told.

I'm all in favour of markets for environmental services. But lets recall that this is a special market, created entirely by legislation, for a policy outcome--which is less carbon in the atmosphere for the least cost. While the private sector must be given the incentives the world needs to invest money, this market will never sit comfortably with massive windfall profits, whomever they fall to. That is just one of the current unresolved debates underway over REDD.

Nupan unveiled

Congratulations to Ilya Gridneff of the Associated Press in Port Moresby in Papua New Guinea who has diligently followed the trail of the Kamula Doso carbon credit story right back to its roots. A few hours ago he filed a story on the wires about the elusive Australian businessman, Kirk Roberts. Mr Roberts is the man behind the company Nupan Trading--which had a relationship with Theo Yasause, formerly at the Office of Climate Change. Nupan Trading is also behind this website.

As Gridneff reports, Mr Roberts is a colourful character. A disgraced former horse trainer, he is currently working in the cock fighting industry in the Philippines (and currently under investigation by the immigration department in this country). In 2007, he was fined $2,800 by the Australian Securities and Investments Commission for failing to assist liquidators and failure to provide reports to the liquidator. Mr Roberts told Gridneff, "I am the most beneficial foreigner to this country (PNG) right now."

Mr Roberts is undoubtedly referring to his work all around Papua New Guinea signing up landowners for big carbon trading deals in advance of negotiations to trade forest carbon as offsets between countries. Although Mr Roberts declined to offer more details about where his forest carbon deals are to be found in Papua, we know there could be a number of them. Carbon Planet previously revealed that it provided $1.2m Australian dollars of project finance to develop carbon trading projects around the country, with $100,000 in finance for each deal. Of course the one deal that we do know about is Kamula Doso.

The story so far sheds a spotlight on the impact that international discussions over avoided deforestation are having on forests around the world. Avoided deforestation markets will not just include the UN's REDD credits. The climate bill passing through Congress at the moment also allows for the trade in credits generated by avoided deforestation.

Some of those involved speak of an orderly arrival of this market. Nonetheless, the absence of a deal does not stop the private sector from speculating that a deal will be done, or even trading on the basis that they will do. In 2008, REDD projects made up 14% of the forest carbon credits traded on voluntary markets. So even though REDD credits do not formally exist, a way is being found to trade them as options. REDD “credits” trade at a lower price than other kinds of forest carbon credits, a signal that the market recognises their risk.

Economists would see nothing wrong with this, and might well argue that such advanced trading is stimulating investment in avoided deforestation projects. The problem is that the information vacuum over forest carbon deals puts landowners at a serious disadvantage.

Landowners who don't really understand what is going on, and who really cannot be expected to fully understand, feel pressured into signing confidential agreements. In the absence of an international consensus about how the profits of such deals should be shared between landowners, local and national governments and traders, how can landowners negotiate a fair deal?

Buying up forest carbon rights is popular at the moment. Even if forest fails to make the cut for REDD credits, there are Waxman Markey credits--which could quite possibly have more relaxed rules. And even if these newly purchased forests don't qualify for either of these mandatory carbon trading schemes then there is always the growing voluntary market to fall back on. The voluntary market in forest carbon is likely to get a boost from a deal in Copenhagen. Corporations and individuals will want to get in on avoided deforestation credits. Its going to be a bonanza.

But its all good, surely? It is all going to result in less deforestation? Not necessarily. The patchwork of discussions and deals under way currently offer little but uncertainty at the moment. Will the avoided deforestation projects really avoid deforestation or would they have been saved anyway? How will they avoid 'leakage' with loggers simply finding new areas of forest to cut down? If they cannot address the drivers of deforestation in Brazil and Indonesia such as demand for beef and palm oil, how will it actually work? Questions, questions, questions.



By Ilya Gridneff
PORT MORESBY, July 16 AAP - A former Australian horse trainer who ran a Philippines cock fighting business is involved in carbon deals central to an inquiry into Papua New Guinea's suspended climate change boss.
Kirk William Roberts denies any wrongdoing in his carbon dealings in PNG and claims former business associates are running a smear campaign against him.
"I am a loveable larrikin," Roberts said from his Port Moresby home.
"I've done nothing wrong, we're doing good things.
"I am the most beneficial foreigner to this country (PNG) right now."
But Roberts' role in a series of carbon deals is now at the crux of PNG's carbon trading woes that includes an investigation in Dr Theo Yasause's role as director of the country's Office of Climate Change (OCC).
Yasause gave Hong Kong based company Forest Top and Roberts, a director of another company called Nupan PNG, an official mandate to trade carbon after Roberts locked in local landowners for potential carbon deals.
But documents show Yasause issued the mandate when he was the PNG prime minister's chief of staff, signing documents as interim director of OCC on May 12, 2008, one month before he was officially appointed director.
The documents show Yasause allowed Roberts to go to the world market offering lucrative carbon credits in PNG.
On the same day Roberts and Yasause also signed a memorandum of understanding with Forest Top director David Leamey to facilitate international carbon credit deals.
Forest Top then gave Australian company Carbon Planet the exclusive rights to broker the credits and provide technical and scientific input to verify the credits.
Forest Top was to be the body that distributed carbon credit sale proceeds to the stakeholders like Nupan, Carbon Planet and landowners.
An Australian Securities and Investments Commission (ASIC) document shows Carbon Planet last year gave $1.2 million for projects in PNG which were associated with Nupan and Forest Top.
Carbon Planet literature predicts the global voluntary carbon market will be worth around $US9.9 billion-$US17.1 billion ($A12.5 billion-$A21.5 billion) per year by 2012, with the global compliance market worth up to $US2 trillion ($A2.5 trillion) by 2020.
Carbon Planet chairman Jim Johnson said they still stood by their PNG deals but declined to comment further.
The deal between Yasause and Roberts' company Nupan became public last month, and as PNG does not have any carbon policy nor legislation for such ventures, the PNG government sidelined Yasause and launched a full investigation into the OCC.
The prime minister's media secretary Betha Somare said any of the deals struck were not valid. The new acting director of the OCC, Wari Iamo, is expected to make a similar statement this month.
"As Nupan (PNG) Trading Corporation is the power-of-attorney for numerous incorporate land groups, it is inappropriate for us to comment on any media speculation at this time," Roberts said.
Nupan and Forest Top are now in dispute and Leamey and Roberts are locked in various legal battles over wide ranging allegations centred in the Philippines, where Roberts is under investigation by the Philippine immigration department.
"I want nothing to do with carbon credits and nothing to do with Kirk William Roberts," Leamey said.
Roberts, equally as frosty in his opinions of Leamey, was involved in what is considered the Philippines' national sport of cock fighting, running an operation in Olongapo, 130km northwest of the capital Manila.
"Cock fighting in the Philippines is the equivalent to pokies in Australia," he said.
Roberts said jealous cock fighting rivals, former business partners and competitors were running a smear campaign against his efforts to help PNG.
That smear campaign includes details of his time as a thoroughbred trainer in NSW, when his horse Yobro won the 1997 Auckland Cup and came second in the Brisbane Cup the following year.
But in March 2002 NSW Thoroughbred Racing Board stewards charged Roberts for verbally threatening his vet, Dr Darren Gibbins, during a December 2001 telephone call.
Roberts was given a six months disqualification after being found guilty of asking his vet to withhold records from an inquiry.
Previously Roberts had a six-month ban for administering a prohibited substance to a racehorse.
An ASIC prosecution report for July to September 2007 shows Roberts also was fined $2,800 under the Corporations Act for failing to assist liquidators and failure to provide reports to the liquidator.
AAP ig/mo/bwl