in Indonesia, USA

US on the slippery slope to REDD offsets?

US on the slippery slope to REDD offsets?Reuters has reported that the state of California has signed an agreement with the Indonesian Province of Aceh to purchase carbon credits from the Ulu Masen forest ‘offset’ scheme.

The scheme attracted wide attention when it was announced in April of this year – being described as a “new front in global efforts to stem climate change”, in which Wall Street bank Merrill Lynch was to invest $9 million over four years to protect 750,000 hectares of forest. But there are many doubts about the scheme.

A report in Bloomberg has highlighted the speculative nature of the project. It is also not clear whether the projects backers or any of the ‘conservation’ NGOs involved in the scheme have paid any heed to the demand of the Indonesia’s indigenous peoples’ alliance (AMAN) that all climate change initiatives should comply with the UN Declaration on the Rights of Indigenous Peoples and should pay special attention to recognition of indigenous land and resources rights.

Doubts are now being raised about the extent to which the carbon in the Ulu Masen forest has been assessed, and the report from Reuters notes that “there have been concerns about how best to measure and verify a forest remains intact for the long term and how best to calculate a forest’s carbon stock”. According to one report, the scheme involves ‘verification’ by the New-York based Rainforest Alliance, whose certification activities, such as for the Forest Stewardship Council, have been heavily criticised. The Alliance’s questionable rigour also attracted attention when the agro-industry company Chiquita which the Alliance had certified as having “strong environmental and social standards” was subsequently fined by the US government for collaborating with Colombian terrorist organisations in order to suppress labour organisation on its plantations.

Meanwhile, according to the Financial Times this week, “Indonesia, the world’s largest palm oil producer and emitter of greenhouse gases through deforestation, on Tuesday dealt a blow to hopes it would step up efforts to combat climate change. Anton Apriyantono, the agriculture minister, told the annual conference of the Roundtable on Sustainable Palm Oil that sustainability criteria should not be made a priority, particularly for smallholders, ‘when economic needs are not being met’ in the global financial crisis.”

Another victim, or possibly perpetrator, of the global financial crisis now bearing down on Indonesia’s forests, was original project financiers, Merrill Lynch, which was forced to sell itself earlier this year to the Bank of America after disastrous investment decisions left it bankrupt.

Worryingly, ‘protection’ of the Ulu Masen rainforest offset project will depend on what was described by one of the project’s initiators, Dorjee Sun of Sydney-based ‘Carbon Conservation’, as “1,000 heavily-armed former Free Aceh rebels”.

Arnold Schwarzenegger, Governor of California, has a reputation as a tough guy and, relatively speaking for the US, for being tough on climate change. But REDD-Monitor wonders whether Arnie will step in when the 1,000 heavily armed former rebels start shooting – or, indeed, if he finds that he’s not getting quite as much carbon offsetting as he thinks he should…. 

U.S. and Indonesia link up on forest carbon credits

By David Fogarty, Climate Change Correspondent, Asia

California and two other U.S. states signed a pact late on Tuesday with Indonesia’s Aceh province that could see forest carbon credits from Aceh accepted into U.S. emissions trading schemes. The pact, the first of its kind, marks a major step in global acceptance of carbon credits derived from projects aimed at halting the destruction of the developing world’s remaining forests, which soak up vast amounts of planet-warming carbon dioxide.

The governors of Aceh, California, Illinois and Wisconsin signed the pact in Los Angeles. It commits the three states to working toward accepting avoided deforestation carbon credits from a major forest reserve in Aceh into their emissions schemes.

“This MoU (Memorandum of Understanding) will wake up the world to reducing emissions by stopping the destruction of our forests,” said Aceh Governor Irwandi Yusuf.

“This will open up a door to robust, verified forest carbon credits being accepted into American markets,” he said in an SMS to Reuters from Los Angeles.

The United Nations has backed a pay-and-preserve scheme called Reduced Emissions from Deforestation and Degradation (REDD) in which rich nations buy carbon credits from developing nations in return for keeping their rainforests standing.

Deforestation counts for about 20 percent of mankind’s greenhouse gas emissions. The scheme, which is still being developed, could be worth tens of billions of dollars a year and could transform how developing states value their remaining forests. 

But there have been concerns about how best to measure and verify a forest remains intact for the long term and how best to calculate a forest’s carbon stock.

The United Nations hopes to include REDD into the successor of the Kyoto Protocol from 2013 but for the moment a number of avoided deforestation projects are being developed to yield verified emissions reductions, or VERs. These usually trade between $4 and $10 for a tonne of carbon saved.

In Aceh, Yusuf has backed the preservation of a 750,000 ha (1.88 million acres) forest reserve named Ulu Masen. Australia-based Carbon Conservation has helped develop a plan to protect and rehabilitate the forest and linked up with Merrill Lynch to sell carbon credits from the project.

The aim was to produce the first batch of more than 500,000 VERs in the second half of next year, said Carbon Conservation CEO Dorjee Sun.

“There’s no trading scheme in the world which currently accepts international REDD credits” Sun told Reuters from Los Angeles after the deal was signed.

“The goal is to make sure the quality of the emissions reductions from Indonesia are on par with those that are being issued in America. So there’s got to be a large amount of synchronization of standards to make sure that credits created in Aceh are real, robust, verifiable and accountable,” he said.

U.S. President-elect Barack Obama has pledged to create a national emissions cap-and- trade system but already there are state-based schemes under development.

California is part of the Western Climate Initiative, set for launch in 2012, while Wisconsin and Illinois are part of the Midwestern Regional Greenhouse Gas Reduction Accord, set for launch in 2010.

Sun said the next step was to ensure the Ulu Masen project could produce robust credits to match the requirements of California’s Global Warming Solutions Act (Assembly Bill 32).

He said his team will conduct an extensive survey of Ulu Masen’s carbon stock by satellite monitoring and on the ground and have developed a sampling method.

“In order to verify it, we’ve been taking remote sensing, satellite photography. However, to do the actual verification, it is not enough to show people photos of forests.”

A key part of the project was applying newly released accounting rules governing voluntary market REDD projects under the globally recognised Voluntary Carbon Standard.

“We need to synchronize all the information against the standard and then have it independently verified,” Sun said, adding he hoped to complete the verification by around June next year.


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