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Why is Brazil so interested in carbon credits for “forests in exhaustion”?

On the final day in Poznan, a dispute took place between Saudi Arabia and Brazil over the Clean Development Mechanism (CDM). Saudi Arabia wants carbon capture and storage to be included in the CDM. Brazil wants carbon credits for “forests in exhaustion”. Saudi Arabia’s motivation is obvious. It wants to continue extracting and selling oil. But what is Brazil’s motivation? And what, exactly, are “forests in exhaustion”?

At around 22:00 on 12 December 2008, the monitor screens in the Poznan conference centre announced that the UNFCCC Plenary would be restarting at 22:15. While we were waiting for the delegates to file in, someone handed me a copy of a draft negotiating text on the CDM.

The start of the closing Plenary Session, it turns out, had been delayed by an argument between Saudi Arabia and Brazil during negotiations about the CDM which took place behind closed doors. The compromise was a request to the CDM’s Executive Board to assess both proposals. But there are serious problems with including both carbon capture and storage and “forests in exhaustion” in the CDM. Even if the techniques of carbon capture and storage could be developed so that it is 100 per cent sure that the carbon will not leak back into the atmosphere, including carbon capture and storage in the CDM would do two things. First, it would create a subsidy for oil extraction, meaning that every last drop of oil is likely to be extracted, no matter what the environmental and social costs. Second, by trading carbon credits, it would allow pollution to continue elsewhere, guaranteeing that there is no overall reduction in greenhouse gas emissions.

I admit that I’d never heard of “forests in exhaustion”. But neither had anyone else, outside the Brazilian delegation, it seems. When I googled the phrase a few days after the Poznan meeting, there were no hits. Now there are four — all related to the last minute CDM discussions at Poznan. I asked one of the government delegates, who explained that Brazil is asking for carbon credits for industrial tree plantations that have over several rotations sucked so much water and nutrients out of the soil that the trees will no longer grow fast enough for the plantation to be managed as a commercial venture. In other words, these “forests in exhaustion” are abandoned plantations, not forests.

UPDATE, 6 April 2009: A couple of colleagues have written to correct my understanding of “forests in exhaustion”, for which I’m grateful. Currently, any plantation established on land that was forested after 1 January 1990 is excluded from the CDM. Brazil hopes to overturn this ruling by arguing that severely degraded logged-over forests (i.e. “forests in exhaustion”) store little carbon and that the only way of storing more carbon on the land is by planting trees. This would create a massive subsidy for industrial tree plantations. See Why Brazil is interested in “forests in exhaustion” for further details.

At a side event about the Amazon Fund the previous day, Brazil’s Minister of Environment, Carlos Minc, said that its proposals for reducing the rate of deforestation in the Amazon will not create any carbon credits or rights to emissions. But under its proposals for the CDM, Brazil does want carbon credits from abandoned industrial tree plantations.

As REDD-Monitor has previously pointed out, the UNFCCC forest definition fails to differentiate between forests and plantations. Meanwhile, Brazil’s government representatives talk about reducing the rate of “net deforestation” — meaning that old-growth forests could be clearcut, replaced by soya or sugar plantations and an equivalent area planted with monoculture tree plantations. With the current definition of forests, the UNFCCC would not notice the difference.

Brazil already has two extremely controversial industrial tree plantation projects which are attempting to register under the CDM in order to claim carbon credits for their operations. One is run by Plantar and the other by Valourec & Mannesmann. The companies claim that these vast areas of eucalyptus plantations are reducing greenhouse gas emissions by producing charcoal for the steel industry. The argument runs that if it did not use charcoal from eucalyptus plantations, then the steel industry would use coal. Neither of these plantation companies is currently registered with the CDM, although both have had applications underway for several years.

One possibile explanation for Brazil’s interest in “forests in exhaustion” to be including under the CDM is that it would create a whopping new subsidy for the establishment of plantations in Brazil. Under this proposal, companies could abandon all or part of their existing plantations and claim credits under the CDM. Then they could use this subsidy to take over even more land for new plantations.

Plantar and V&M both inflict massive social and environmental impacts on the local communities living near the plantations. In 2002, World Rainforest Movement produced a report which documents these impacts in detail. WRM’s researchers noted “an atmosphere of repression and fear” and did not name the people interviewed in their report. They emphasised their “concern over the fear these interviewees feel”.

In 2006, journalist Heidi Bachram wrote in Red Pepper magazine that when she visited the V&M plantations, a villager told her that “The threat to workers and people here is great. Shots have been fired on people by the armed guards. They feel prisoners within their own lands.” Also in 2006, a local community submitted an international complaint, pointing out that the destruction of the native cerrado (savannah) vegetation has left the community without access to firewood and fruits and has led to the drying up of the Cana Brava River. V&M’s response was to increase the pressure on the community.

In February 2007, armed guards employed by V&M shot and killed Antonio Joaquim dos Santos in front of his 16 year-old daughter. He was collecting firewood.

Although these companies are managing industrial tree plantations and not forests, the examples of Plantar and V&M give a warning message about the dangers of REDD. Both companies prevent local people from entering the plantations to gather fuelwood. By increasing the value of forests to corporations and states there is a real danger that REDD will lead to similar situations with armed guards patrolling forests to protect their carbon investments from local communities.

One response to this argument is that REDD is developing standards, which are to be monitored by independent third-party assessors. But when dos Santos was shot, V&M’s plantations were certified. And not under any old rubber stamp certification scheme. V&M’s plantations were certified under what is widely regarded as the best forestry certification system in the world: the Forest Stewardship Council. FSC ignored calls from Brazilian NGOs to withdraw the certificate. After the shooting, V&M announced a “voluntary decision to leave FSC”. This has, apparently, made no difference to V&M’s CDM registration process.

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  1. A colleague suggested that I should clarify that “both V&M and Plantar are CDM registered for the more efficient charcoal ovens component of their CDM applications, they just never succeeded to date to get the plantations part registered.”