McKinsey & Co. is one of main promoters of the myth that REDD will be cheap. In 2009, Carter Bales, an emeritus director at McKinsey said that, “You can do this forestry work without technology risk, without hard infrastructure costs, there are some soft infrastructure costs in terms of readiness for these countries, and at very low cost relative to other abatement options.”
Bales is also a trustee of The Nature Conservancy and was on the advisory council of the Princes Rainforest Trust. Clearly a man of some influence in REDD circles, then. But he hugely underestimated both the cost of REDD and the difficulties of implementing it.
This is clearly demonstrated in a 2009 report that McKinsey produced on REDD in the Democratic Republic of Congo. The hastily produced report appeared to confirm that REDD would be low cost and, to anyone who has looked at the political realities in DR Congo, surprisingly easy to implement.
In a recent post on Global Policy, David Ritter makes some suggestions to explain how McKinsey could have got it so wrong. Ritter is Head of Biodiversity Campaigns at Greenpeace UK – this post is written in a personal capacity.
McKinsey Again: The Consultants and the Congo
David Ritter – 5th May 2011
The Democratic Republic of Congo, one of the successor states to the European colonial empires of sub-Saharan Africa, contains staggering natural resources – including the second largest remaining block of intact rainforests one earth. On the face of it, the DRC (profiled by the CIA here) should be one of the primary targets for the emerging global REDD mechanism – the international scheme to reduce carbon emissions from deforestation and degradation of forests.
Back in 2009, the global consultancy firm McKinsey was commissioned to produce a study of DRC’s REDD potential. Despite McKinsey’s nearest African outpost being more than 1500 kilometres away from the DRC’s capital, Kinshasa, the consultants quickly got to work, allegedly producing a report in a mere five weeks. That report is now forming the basis of the DRC’s approach to REDD. The DRC’s Environment Minister Jose Endundo recently confirmed that his government simply ‘adopted the McKinsey scenarios’ that were presumably put together in that five week period.
The DRC is not only enormous – the twelfth largest nation on Earth – but is home to more than 200 ethnic groups, and has been the site of a bewildering array of internal and transnational conflicts over the last fifteen years, which are some times referred to as ‘Africa’s World War’. As The Economist highlighted last week, five million people have been killed in wars that defy simple understanding and which continue to persist in the east of the country.
In order for REDD to work, effective forest governance is essential, necessarily including the establishment of reliable baselines, effectual monitoring, reporting, verification (MRV), and law enforcement. It should be impossible to overlook just how difficult it will be to secure a functioning REDD scheme in the DRC. Yet despite this, the McKinsey influenced DRC REDD plan:
seems blissfully unaware of the scale of the challenges: it talks of ‘finalising’ institutional reform as if this system was more or less ready to go, and blithely notes in one sentence the need to provide MRV bodies with adequate financial and human resources (quoting from here).
It is genuinely puzzling: how did the McKinsey influenced approach end up adopting such a blasé attitude to the DRC’s phenomenal real world problems? Perhaps one source of the chasm between the plan and the reality can be found in the McKinsey mentalité. According to McKinsey:
Our scale, scope, and knowledge allow us to address problems that no one else can.
Any common law lawyers reading this blog will be familiar with the notion of ‘mere puffery’. To adopt a definition applied in one US case, puffery typically involves:
exaggerated, vague, or loosely optimistic statements about a company that are deemed so immaterial and unworthy of reliance that they cannot serve as the basis for liability. The difference between a statement of fact and mere puffery rests in the specificity or generality of the claim.
McKinsey’s claim to problem solving powers that are uniquely superior to everyone else and every other organisation on earth is classic puffery. But to dismiss McKinsey’s declaration of the firm’s own specialness as mere corporate self-aggrandizement for marketing purposes is to overlook the overarching power dynamics at work.
Imperialism – to take a usefully broad definition offered by the late Edward Said – is ‘the practice, the theory and the attitudes of a dominating metropolitan centre ruling a distant territory’. Despite their claims to disinterested objectivity McKinsey’s approach clearly embodies a certain set of normative values and a particular political economy. When combined with their level self-assurance – McKinsey confidently believe they recruit only ‘the best people’ – and closeness to global elites, we have a construction of knowledge and power that is distinctly imperial in nature.
It should perhaps come as no surprise then that some of the outcomes also look distinctly imperial:
The assumption – made explicit in the DRC study – is that commercial agriculture is a desirable norm to which forest dwellers would obviously want to ‘evolve’, if only circumstances would permit. There is no mention of people’s right to free, prior and informed consent or how forest people who do not wish to comply with these plans will be dealt with.
None of this criticism implies an argument that the global community should not try and implement a mechanism to tackle deforestation in the DRC – or anywhere else for that matter. Nor is it being argued that external advisers can’t play a constructive role in developing nations per se. But REDD policy that is the product of an imperial mindset is unlikely to be effective and may well produce highly perverse outcomes.