By Chris Lang
A new report by Greenpeace investigates VW’s “climate neutral” production claims for its new ID series of electric cars. Greenpeace concludes that VW has done too little to reduce its CO2 emissions, and that the carbon credits bought from the Katingan REDD project in Indonesia are neither additional nor permanent. VW’s claims of climate neutrality are “a huge sham”.
On the project website, the company behind the Katingan REDD project, PT Rimba Makmur Utama, states that,
In the absence of our work, the project area would have been cleared of forest, and the peat drained, gradually releasing the vast carbon stocks into the atmosphere. Each tonne of carbon dioxide that we prevent from release becomes a carbon credit. This process is based on robust scientific evidence, and overseen by independent auditors under the Verified Carbon Standard. Purchasing and retiring such credits permanently removes them from the market, mitigating against climate change, and protecting this unique and biodiverse habitat.
The website even features a carbon counter that claims to show exactly how many tonnes of CO2 have not been released to the atmosphere as a result of the Katingan REDD project:
Greenpeace’s new report takes apart these claims. The carbon credits do not mitigate against climate change, and the assumptions about what would have happened to the forest in the absence of the project are questionable and in any case unverifiable.
Greenpeace writes that,
Many factors indicate that the project operators’ assumptions regarding additionality are clearly exaggerated. It is highly probable that the forest would have stored comparable amounts of CO2 even without the project. The project has merely shifted deforestation to other places in the region. Destruction of forest cover that may have been prevented in the project area is taking place elsewhere. Moreover, the permanence of CO2 storage is not guaranteed. While buyers of the carbon credits continue to release CO2 into the atmosphere, where it will impact our climate for about 100 years, it is far from certain whether the forest will still be standing in 20 or 50 years.
VW’s climate action: Too little, too late
Greenpeace looks into VW’s attempts to reduce emissions in the manufacturing process, and points out that “phasing out the internal combustion engine is not enough to mitigate climate change.” VW should stop developing internal combustion engines way before its deadline of 2040, and should replace all sports utility vehicles with climate-friendly cars.
Greenpeace demands that,
VW must minimise its own CO2 emissions instead of compensating them: Compensation payments to REDD+ projects do not make any car climate neutral. The destruction of our climate cannot be “compensated”. Offsets mislead customers into believing they can continue business as usual without needing to modify their behaviour. Instead of trying to buy itself out with carbon offsets, VW must restructure its business model to make it more climate compatible.
Greenpeace also looks in detail at the questionable assumptions behind the Katingan REDD project.
Greenpeace questions the baseline scenario, which it finds “is implausible in many instances, and highly unlikely”. Several of the reference regions are 1,000 kilometres away from the project, “rendering them nearly useless for purposes of comparison”, Greenpeace writes. The project developers exaggerated the danger to the forest in the project area of conversion to industrial tree plantations. In any case the project area was legally protected under the May 2011 national moratorium on new forest concessions.
Greenpeace also reports on land conflicts with local populations and that villagers affected by the REDD project have a negative view of the project, in contrast with VW’s claims about such projects being beneficial to local communities.
Forest cover in the project has decreased since the project started. Deforestation in villages near to the project has increased, and villagers are moving away from the project area.
Additionality: The problem of counterfactual baselines
The project design document (PDD) for the Katingan REDD project lists seven potential options for what might have happened to the forest in the absence of the project. The PDD concludes that only one of these options is “credible”: “significant barriers prevent the realization of all but a single credible land use scenario: industrial acacia plantation.”
The project’s baseline scenario anticipated that between 2011 and 2020, in the absence of the project, 51,2929 hectares of the project’s 150,000 hectares would be converted to acacia plantations. That’s an average of 5,129 hectares per year.
Greenpeace compared that figure to the actual rates of deforestation for industrial tree plantations in Central Kalimantan province from 2001 to 2010, documented in a report by CIFOR, titled, “Atlas of Deforestation and Industrial Plantations in Borneo”. CIFOR found that a total of 71,599 hectares of industrial tree plantations were established in Central Kalimantan in this period. Of this, 33,713 hectares of forest was cleared to make way for plantations. The average rate of deforestation is 3,371 hectares per year.
In other words, the yearly average for the entire province of Central Kalimantan was significantly lower than the PDD anticipated for just the Katingan project area. All of the plantations established in Central Kalimantan between 2001 and 2010 were on mineral soils. The project area has predominently peat swamp soils, which would need to be drained before they can be planted with acacia trees – at considerable extra costs.
Greenpeace notes the incentive for project developers to draft a baseline that is as destructive as possible: “The less favourable the assumed development of the forest cover in the absence of a project, the greater the number of tradeable CO2 offsets.”
In addition, Greenpeace notes that certification bodies have a conflict of interest in that they are commissioned and paid by project developers.
Greenpeace argues that the project developers and auditors only agreed on the baseline scenario when the certification process was underway in 2015 and 2016. Dharsono Hartono director of PT Rimba Makmur Utama, the company running the Katingan REDD project, didn’t mention acacia plantations as a threat to the project area in presentations he gave and blog posts he wrote between 2012 to 2014.
Of course, as Larry Lohmann has pointed out, “The problem is not ‘bad baselines’ but the concept of counterfactual baselines itself.”
Reference regions: Thousands of kilometres away
To calculate the rate of deforestation in the absence of the REDD project, the project developers identify reference regions. These are supposed to as similar as possible to the project, and in the immediate area of the project.
But the only large industrial tree plantation in Central Kalimantan is Korintiga Hutani. It covers 80,000 hectares, about half of which was previously forest. But the soil is mineral, not peat swamp soil, as found in the project area.
Five of the seven reference regions are in Riau province on the island of Sumatra. That’s more than 1,000 kilometres from the project area. In the late 1980s, Riau was 80% covered in forest. The area of forest fell dramatically following the arrival of two of the world’s biggest and most destructive pulp and paper corporations: Asia Pacific Resources International (APRIL) and Asia Pulp and Paper (APP). The pulp and paper infrastructure built by APP and APRIL is (fortunately) still lacking in Central Kalimantan.
The other two reference regions are in West Kalimantan, 400 kilometres from the project area. But these reference areas cover only about 13,000 and 25,000 hectares – a small fraction of the project area’s 150,000 hectares.
The PDD states that, “Acacia plantations have already been established in peat forest areas of Central Kalimantan to the east of the project site in Pulang Pisau and Gunung Mas districts.”
Greenpeace compared this statement with the data in CIFOR’s “Atlas of Deforestation and Industrial Plantations in Borneo”, and found the statement not to true. In Gunung Mas, since 2000, 2,907 hectares have been cleared for acacia plantations, but on mineral soil. There are no industrial tree plantations in Pulang Pisau.
Moratorium, what moratorium?
In May 2011, Indonesia’s then-President, Susilo Bambang Yudhoyono, signed a decree to bring into force a two-year moratorium on new forest concessions. The moratorium has been renewed several times since then, and in 2019 President Joko Widodo issued a permanent moratorium on new forest concessions. The moratorium covers about 66 million hectares of primary forest and peatland, including the project area.
Greenpeace writes that,
The baseline scenario stipulates that applications for two of the three licenses for pulpwood plantations would have been submitted in 2010. The companies involved would have received letters with confirmation of provisional reservation in 2011, and of full license in 2012. The adoption of the now permanent moratorium in 2011 has rendered these assumptions obsolete.
Relying on the moratorium to stop deforestation of any area of forest in Indonesia would be an extremely risky strategy. Deforestation has increased since the moratorium was announced in May 2011. Nevertheless, in its 291 pages, the PDD refers to the moratorium only once:
As the majority of the project area is forested and situated on peatland, the Katingan Project must also comply with various regulations on the management of forest and peatland, including:
Presidential Instruction INPRES No. 10/2011 regarding Suspension on the Issuance of New Licenses and Improved Management of Primary Forest and Peatlands”, renewed by INPRES No. 6/2013 and No. 8/2015
Permanence: “Dark brown fire scars” in the project area
Greenpeace notes that in 2019, journalists Daphné Dupont-Nivet, Gabriel Wahyu Titiyoga, and Aqwam Fiazmi Hanifa reported on the Katingan REDD project. Dupont-Nivet wrote about “two dark brown fire scars in the protected area” on satellite images. The burned area covered a total of 1,900 hectares. In 2015, more than 9,000 hectares of the project area burned.
A 2019 masters thesis by Vivi Selviana at North Carolina State University also found evidence of forest cover loss in the project area. Selviana now works as a research consultant for CIFOR.
An oil palm plantation on the eastern boundary of the project area also threatens the project. In 2015, Dharsono Hartono told Mongabay that,
“The impact of their land clearing will be very detrimental to us, because it’s one ecosystem. If they open land in a massive way, it will interfere with what we’re doing. In the short term, the impact will not be severe. But in the long term, the peat dome in the region will be affected, and there is potential for wildfire.”
As Greenpeace points out, even if the forest is protected for the 60 years of the Ecosystem Restoration Concession, what happens when the license expires is anyone’s guess. If the forest is cleared,
The CO2 from fossil fuels burned to manufacture “carbon-neutral” VW models, which had been neutralised thanks to the forest, would still be in the atmosphere – in addition to with the emissions generated by the destruction of the forest itself.
Leakage: Substantial migration away from the project area
Leakage is very difficult to monitor, Greenpeace notes, but adds that there are signs of leakage in the Katingan REDD project. In her masters thesis, Selviana found substantial migration away from the project area in the early stages of the project. She writes that people moved out of the villages “due to lack of livelihood opportunities, to look for jobs, and for family reasons (e.g., marriage, children).” In 2014, after the project had started, more people moved of project area villages than control villages. “This might happen due to worries in the restriction of forest access as one of the local sources of income,” Selviana writes.
Land conflicts and land claims inside the project area
Greenpeace points out that although local communities are not the real drivers of large-scale deforestation, they are still being pushed out of project areas. Investigative journalist Daphné Dupont-Nivet found that there were land conflicts in the Katingan REDD project area:
In 2014, the highest-ranking Dayak leaders reached an agreement with the governor of Central Kalimantan, which stipulated that each Dayak family in the province would be granted the right to cultivate five hectares of land. They still had to find out where this land would come from. And a local politician secured votes in the Dayak community during the 2017 elections in the province by promising them that he would reclaim land, according to Bahrudin [a Dayak leader]. He showed letters and documents that had been prepared by Dayak community leaders. The villagers used these to claim land within the project area where the CO2 reserve had been in place since 2013.
Vivi Selviani’s masters thesis is titled, “Learning Lessons from a REDD+ Initiative: Assessing the Implementation Process, Forest and Community Outcomes, and Impacts on Local Households in Central Kalimantan”. In it she takes a close look at the effects of the Katingan REDD project on local communities, interviewing members of more than 250 households.
Selviani found that perceptions of the project have deteriorated over time. Three out of the four villages surveyed rated community development and well-being improvement as “very negative”.
Household income did not develop as well for villages affected by the Katingan REDD project, compared to villages outside the project area. Selviana writes that,
Findings show no differences on total income for households in REDD+ and control villages before the implementation of the REDD+ project. However short after the implementation of the REDD+ project in October 2013, the total income of households in control villages was higher compare to REDD+ villages. Furthermore, approximately after 5 years implementation for the REDD+ project, the household total income in the control villages was also higher than the total income of household in the REDD+ villages.
This report fits a pattern of misunderstanding on REDD+ projects, which is based on incomplete information and even distortion to undermine the projects’ complex and challenging work on providing concrete solutions to the social, environmental and economic problems on the ground. The Katingan Mentaya Project’s Project Design Document (PDD) and annual monitoring reports have been third-party audited and verified by an expert accredited validation and verification body (VVB) and demonstrate the project’s integrity and meaningful progress in its conservation, restoration and community development programs. Reports like these, which are able say whatever they like, regardless of how factually incorrect, are not even peer reviewed.
Greenpeace Germany did contact the project with questions relating to the baseline but ignored the evidence we provided when publishing their report.
The report’s authors have clearly spent time researching the project, but rather than giving a fair assessment, the report is full of inaccuracies, misleading interpretations and even contradicts a Greenpeace Southeast Asia reporting from earlier this year that highlighted the threat to peatland of conversion to acacia plantations.
For those with the time to read it, I will copy and paste our point-by-point rebuttal below, but generally, it is safe for me to say that the report is essentially an attack directed to the financing mechanism of offsetting. Despite the evidence provided to the journalist, the project has been used as collateral in order to undermine a means of financing forest conservation that Greenpeace Germany is principally opposed to.
We have nowhere near the financial resources or media reach that Greenpeace has to respond at the same level. We are dedicating our resources to prevent tropical forests from being torn down while finding innovative solutions to improve the lives of local communities and indigenous people who live around the forests. These exciting and important collaborative efforts on the ground are what we are doing day after day. And yet Greenpeace seems to be doing everything it can to diminish these efforts.
Undermining a project that is demonstrably protecting an important area of tropical forest and peatland, to make an ideological point, is deeply cynical, dangerously irresponsible and seems to run totally contrary to Greenpeace’s own environmental mission.
Dharsono Hartono, CEO PT. Rimba Makmur Utama (RMU), Katingan Mentaya Project.
Additionality – Acacia and other forest threats
Land exploitation and deforestation threats are not static. The Greenpeace report acknowledges this and references the multiple threats to the Katingan Mentaya Project forest area.
As explained to Greenpeace, the Katingan Mentaya Project PDD deemed acacia, which is used to produce pulp and paper, the most serious and tangible threat (we did not say acacia conversion is the “only conceivable use of the area”), due to the facts that it was legally tenable and, as the project was being established, there were active petitions to convert the land for that purpose.
Described in section 4.5.2 of the PDD, PT. Natural Wood Kencana (PT Kayu Alam Kencana) applied for the concession inside the project area in 2008.
The acacia plantation company would have been successful in its application based upon historical data that shows the pattern of acacia plantations occupying comparable peatland sites in the region. Acacia plantations had increased rapidly in Central Kalimantan and across Indonesia over the previous decade and the Ministry of Forestry was targeting further expansion in the coming years. (The 2005-2009 MoF Strategic Plan Document by Minister Decree no. 58 2006 (Peraturan Menteri Kehutanan Nomor P.58/Menhut-II/2006) stated a target to expand timber plantation to 5 million hectares).
Prior to establishing the project, the project area was both legally eligible for plantation establishment and was among sites designated as such by the Ministry of Forestry.
This is not to say the threat of conversion by other means was not high. Despite laws prohibiting the practice on peat swamp forest, slash and burn agriculture is still prevalent for smallholder farmers and as Greenpeace’s own reporting has shown multiple times, illegal land conversion for palm oil plantation is widespread across the region.
The Greenpeace Investigative Campaigner points to oil palm plantations as of greater importance to the province.
All information in 2010 pointed to the fact that pulp and paper was a priority investment per the Ministry of Forestry Strategic Plan. However, subsequently, the focus for this became more targeted to Sumatra than in Kalimantan from 2010 until now.
So, it seems the oil palm scenario would have been more likely in Kalimantan and would have strengthened the project’s original additionality. However, we did not take this route because the forest area was zoned as production forest and oil palm licences could not legally be issued on production forest zone. An application for an oil palm licence, therefore, would have required a re-zoning of the concession.
What has been observed is that the areas that are zoned production forest are being re-zoned to allow oil palm. This is why there is a large area of oil palm in Kalimantan, as Greenpeace has pointed out. See the following article about conversion of large forest area to oil palm plantations from 2010-2013: https://en.tempo.co/read/714805/petitioner-blames-former-forestry-minister-for-forest-fires
Could we have predicted that this would happen as a result corrupt practice back in 2010? Yes. Could we have included that in the PDD as a legally viable scenario? No.
So, the more likely ex ante scenario would have been that the Katingan Mentaya forest would be re-zoned to allow oil palm plantations.
To the point about forest clearance exclusively taking place on mineral soil and not peat bog soil, this Greenpeace press release sums up the reality of the situation in its title and is a clear contradiction to the report’s suggestion: Greenpeace finds Asia Pulp and Paper guilty of peatland clearance and fuelling forest fires in Indonesia https://www.greenpeace.org/southeastasia/press/43721/greenpeace-finds-asia-pulp-and-paper-guilty-of-peatland-clearance-and-fuelling-forest-fires-in-indonesia/
Baseline proxy sites
Peatland forest conversion is not exclusive to Central Kalimantan. The pattern of deforestation and land conversion can be seen in comparable sites across Indonesia.
To form its baseline, the Katingan Mentaya Project looked at and compared numerous reference sites that were similar geographically, biophysically, socioeconomically and also within the immediate area.
To select proxy areas, these need to meet a series of requirements (as per module BL-PL, VM0007 VCS methodology):
1. Land conversion practices must be the same as those used by the baseline agent or class of agent
2. The post-deforestation land use must be the same in the proxy areas as expected in the project area under business as usual
3. The proxy areas must have the same management and land use rights type as the proposed project area under business as usual
4. If suitable sites exist they must be in the immediate area of the project; if an insufficient number of
sites exist in the immediate area of the project, sites must be identified elsewhere in the same country as the project; if an insufficient number of sites exists in the country, sites must be identified in neighbouring countries
5. Agents of deforestation in proxy areas must have deforested their land under the same criteria that the project lands must follow
6. Deforestation in the proxy area must have occurred within the 10 years prior to the baseline period
7. The three following conditions must be met:
– The forest types surrounding the proxy area or in the proxy area prior to deforestation must be in the same proportion as in the project area (±20%).
– Soil types that are suitable for the land-use practice used by the agent of deforestation in the project area must be present in the proxy area in the same proportion as the project area (±20%). The ratio of slope classes “gentle” (slope <15%) to “steep” (slope ≥15%) in the proxy areas must be (±20%) the same of the ratio in the project area.
– Elevation classes (500m classes) in the proxy area must be in the same proportion as in the project area (±20%).
Finding areas that meet all these requirements is not easy, although Greenpeace may think otherwise. It is very important to note point 4, which allows a project to choose areas somewhere else if the country if suitable areas do not exist in the immediate area of the project. It even allows to choose areas in neighbouring countries if needed. The most important goal is to ensure the proxy areas chosen best represent the project area being assessed.
All proxy areas selected for the Katingan Mentaya Project were acacia plantations on peatland. The deforestation rate was estimated for each of the 7 proxy areas (by analysing Landsat images at different time steps) the highest deforestation rate observed was 14.31%, and the lowest was 3.91%. The average per year deforestation rate for all proxy areas was 7.82%. Whilst the average could have been used under the applicable methodology, the lowest observed (3.91%) was selected to be applied in the baseline. This was to ensure that the estimation of emission reductions was conservative.
Moratorium
It appears that the Greenpeace investigative campaigner is suggesting that due to the 2011 moratorium alone that all Indonesian tropical peatland is now safe and the threats have been alleviated. We would argue that this is either a disingenuous interpretation in order to undermine the baseline or else staggeringly naïve.
As we explained to the Greenpeace Investigative Campaigner:
This question is directed at how agents B and C (PDD sections 4.5.2) would have been able to obtain a license in 2011 and 2012, despite the moratorium on new licenses in primary forests and peatland, which was enacted in May 2011.
The regulations include an exemption for agents that have already received principle licenses from the Ministry of Forestry. Both agents would have applied in 2010 and received their provisional license in early 2011, prior to the moratorium. This would have enabled full license to be issued after the announcement of the moratorium.
Furthermore, it is important to add that implementation of the moratorium has been met with a number of challenges and irregularities (https://www.researchgate.net/publication/303249562_Indonesia's_Moratorium_on_New_Forest_Concessions_Key_Findings_and_Next_Steps), which has meant subsequent licenses being issued by the Ministry.
One example of this is a license being issued to an oil palm plantation to the east of the project area. The moratorium map was revised to accommodate the plantation. (https://www.rainforest-rescue.org/petitions/1024/indonesian-haze-no-oil-palms-on-peat-revoke-pt-peaks-license-now)
This interactive map by the NGO Wetlands International further illustrates the revisions to the moratorium map https://wetlands.cartodb.com/viz/ac6092d0-7cf4-11e5-b9d2-0ef24382571b/embed_map
There have also been examples of violations of the law and corruption. For example:
https://eia-international.org/news/indonesias-moratorium-on-clearing-forests-and-peatlands-now-permanent-but-excludes-vast-areas/
Permanence
The Greenpeace report quickly switches from arguing a lack of threat of conversion and deforestation, to questioning the permanence of the project because of the threats.
The Katingan Mentaya Project license is initially set for 60 years, with the possibility to extend the license for a further 35 years, so 95 years permanence will be ensured.
The report refers to an article written by a Dutch journalists, which has been roundly debunked for containing inaccuracies and poor interpretations of data.
Forests and natural environments are increasingly vulnerable to deforestation and forest fires across the tropics. Projects like the Katingan Mentaya Project work strenuously to minimise these risks.
There were extensive fires across Indonesia during the 2019 dry season. And while there was considerable fire damage in the areas surrounding the Katingan Mentaya Project, only two fires managed to cross into the project and were rapidly responded to and managed by the team. That fire incidents were limited to only two, demonstrates the effectiveness of the project teams, both those on the ground and those providing constant remote monitoring. Furthermore, the areas where the two fires did occur, were mostly non-forest.
If it were not for the project, fires in the area would have been considerably more extensive.
Leakage
The project only generates credits from the emissions avoided from conversion to acacia plantation, not from any other activity. This means the only leakage the project would have would be due to the same activity. This is the definition of leakage as per the Verified Carbon Standard (VCS). There is no evidence to suggest that illegal logging happening around the villages would not have happened if the project were not there.
For the baseline production, following VCS methodologies, the historic trend of pulp and paper concessions and their deforestation was studied to estimate the deforestation that would have occurred each year if the project had not been implemented.
Every year we monitor the deforestation in all pulp and paper concessions in Indonesia, using the most up-to-date concession data provided by Global Forest Watch and their own deforestation data, and compare it to what was predicted using the historic trend. To date, the project has never observed any such leakage. This process is explained in the PDD and monitoring reports, and follows module LK-ASP from VM0007 VCS methodology.
Verra, the organisation that administers the VCS, produced the following Case Study to showcase the project’s exemplary work in avoiding leakage: https://verra.org/wp-content/uploads/2018/02/REDD-Leakage-Case-Study.pdf
Land rights
There is absolutely no legal ambiguity over the area marked out for protection by the project.
Attempted land conflicts may occur, but in such cases it is part of the project’s responsibility to ensure no incursion happens in the project area.
The project team will make no apologies for preventing attempts to illegally cause forest fires or illegally encroach in any way into the forest area.
However, the project takes community grievances very seriously and works closely with community members to identify and resolve any issues that may arise.
The project is also constantly working to expand the reach of its community support. The annual project Monitoring Reports, which can be found on the Verra website, provide details accounts of all the community support initiatives that are taking place: https://registry.verra.org/app/projectDetail/VCS/1477
Reference to the Master’s thesis ‘Learning Lessons from a REDD+ Initiative: Assessing the Implementation Process, Forest and Community Outcomes, and Impacts on Local Households in Central Kalimantan, Indonesia’. (Under the direction of Dr. Erin O. Sills).
Having closely reviewed the thesis, which had not been peer reviewed before Greenpeace used it as evidence, we found serious issues with its robustness and validity. For example, the conclusions are drawn from an examination of 1% of the families in the 34 villages surrounding the Katingan Mentaya Project, from four of those villages, and focus groups, comprising 0.2% of the 45,000 population. We found inaccurate statistical and economic analysis, specifically when handling migration numbers and household income. And we also question the use of goldmining villages as the control groups, as the income from goldmining is far from comparable to that of the average village in the region.