By Chris Lang
REDD-Monitor’s occasional series, Carbonballs features the climate howlers made by companies and individuals claiming to be addressing the climate crisis. Today’s post features a Canadian carbon offsetting company called Carbon Neutral Royalty that recently appointed two new strategic advisers: Erik Solheim and John Mitnick.
Let’s take a look at each of them in turn, followed by a glance at the company they will be advising.
Solheim, of course, was Norway’s Minister of the Environment and International Development from 2007 to 2012. Before that he was Minister of the Environment for two years. In December 2007, Solheim was part of the team, together with then-Prime Minister Jens Stoltenberg, and the Minister of Petroleum and Energy, Åslaug Haga, that launched Norway’s strategy to prevent deforestation at a cost of about US$550 million per year.
Carbon Neutral Royalty’s press release explains that “Norway cooperates closely with Brazil, Indonesia, Guyana, and other countries to conserve rainforests”. Presumably Solheim simply forgot to tell Carbon Neutral Royalty the fact that Indonesia scrapped the US$1 billion REDD deal with Norway in September 2021. Or that Norway suspended REDD payments to Brazil in 2019, as deforestation soared under the regime of President Jair Bolsonaro.
Or that ExxonMobil has been exploring for oil off the coast of Guyana since 2015. The oil giant has discovered massive oil deposits worth hundreds of billions of dollars. The oil has made Norway’s REDD payments totalling US$250 million (most of which remains unspent) pale into insignificance. Nevertheless, Guyana is once again looking at generating carbon offsets from its rainforests.
From 2016 to 2018, Solheim was head of the UN Environment Programme. He resigned following an audit by the UN Office of Internal Oversight Services was leaked to The Guardian. The audit revealed that in a period of 22 months, Solheim had run up a bill of US$488,518 on air travel and hotels.
Pretty much the perfect background for a strategic adviser to a recently formed carbon offsetting company.
Joining Solheim as a strategic adviser at Carbon Neutral Royalty will be John Mitnick. If anything, Mitnick is even better qualified than Solheim as a strategic adviser to an offsetting company.
Mitnick is a US lawyer. From February 2018 to September 2019, under President Donald Trump, he was General Counsel of the US Department of Homeland Security. That’s the “large, beleaguered, and ill-begotten bureaucracy” as former US government official Richard A. Clarke describes it.
From 2014 to 2018, Mitnick was Senior Vice President, General Counsel, and Secretary of The Heritage Foundation. That’s the “Koch Industries climate denial front group”, as Greenpeace describes it:
The Heritage Foundation has also: misinterpreted the impacts of global warming on the US economy; twisted news reports to justify claims about ‘climate taxes’; issued deceptive economic analyses and presentations; and released allegations about economic ruin and job losses from green stimulus investments by Congress.
It gets worse, believe it or not. From 2007 to 2013, Mitnick was Vice President, General Counsel, and Secretary at Raytheon Technologies Corp. That’s the US multinational aerospace and defense conglomerate, one of the largest weapons manufacturers in the world.
Raytheon is looking forward to selling more weapons as the climate crisis intensifies. In 2012, in its submission to the Carbon Disclosure Project (CDP) Raytheon wrote that “expanded business opportunities are likely to arise as consumer behaviour and needs change in response to climate change”. In addition to renewable energy technologies, weather-prediction products, and emergency response equipment, Raytheon anticipated that, “demand for its military products and services as security concerns may arise as results of droughts, floods, and storm events occur as a result of climate change”.
Meanwhile, the Saudi-led coalition is using Raytheon-manufactured weapons to bomb Yemen. In January 2022, a GBU-12 laser-guided bomb manufactured by Raytheon hit a detention centre in Sa’adah killing at least 80 people and injuring more than 200.
Carbon Neutral Royalty
The company Carbon Neutral Royalty Ltd. was founded in July 2021. The company provides upfront payments to carbon offset project developers in order to acquire the right to buy offsets when the project starts selling them. This is known as a streaming or royalty financing model. Here’s how the company describes it on its website:
The Company intends to create a diversified portfolio of high-quality carbon credit royalties and streams. CNR provides an upfront payment to Carbon Offset Project Owners to acquire the right to purchase carbon credits at a fixed price or fixed percentage of spot below market that each project generates. Royalty and streaming are a highly proven financing model (eg mining).
Carbon Neutral Royalty is offering shares which investors can buy. The company has a “Why Invest” page on its website that argues that, “Demand for carbon credits [is] expected to grow by 15x by 2030” and that, “Higher carbon prices are predicted in order to meet carbon neutral targets.”
Carbon Neutral Royalty’s press release about appointing Solheim and Mitnick lists Brett Heath as the company’s non-executive chairman.
Heath’s background is in raising finance for mining operations, recently with two streaming finance companies, Nova Royalty Corp and Metalla Royalty and Streaming Ltd. Until recently, Heath’s LinkedIn profile looked like this:
That screenshot was taken on 5 March 2022. Perhaps wisely, given that he’s now selling a product that is supposed to have something to do with protecting the environment rather than utterly trashing it, Heath has now removed the background photo. His new company will focus on financing so-called Natural Climate Solutions.
Heath recently gave an interview to Michelle Makori, editor-in-chief of Kitco News, at the recent 31st Global Metals and Mining Conference in Florida. Having made clear that his company is in this to make money, Heath confirms that the purpose of carbon offsetting is to allow Big Polluters to continue business as usual for as long as possible:
Michelle Makori: So, I’m a car manufacturer, for example, but I’ve given an ESG [Environment, Social, and Governance] compliant pledge to my shareholders who are big institutional investors, who really care about ESG, but I can’t hamper my operations in a way at the moment that meets that target. So again, I come to you, or to the carbon credit market, and buy some licences to pollute, if you will, or to continue doing the operations that I need to do that aren’t that environmentally friendly. But then I’m doing some good. I’m detracting from the carbon that I’m putting out there by buying something that then neutralises it.
Brett Heath: Exactly. And again, this is the bridge to carbon zero. Because it’s going to take a long time, a long time, decades, for these businesses to be able to bring their operations to a place where there’s carbon neutral. There still needs to be advancements in technology, in renewable energy, and the reality is it’s not ready for that yet. The bridge is really these carbon credits that are going to allow them to continue on and manage that in a very reasonable process.
Which is exactly what REDD-Monitor and other critics of offsetting have been warning about for decades. Offsets are a mechanism to allow Big Polluters to continue business as usual for as long as possible, while giving the impression of taking action to address the climate crisis. Offsetting is a distraction that’s worse than doing nothing.