By Chris Lang
Last week, the Democratic Republic of Congo opened an auction for licensing rights for 30 oil and gas blocks. The oil and gas blocks overlap with national parks, including Virunga, and the Cuvette Centrale peatlands that store huge amounts of carbon.
While the auction was taking place in Kinshasa a group of Regenerative Finance (ReFi) initiatives created RedemptionDAO. (DAO stands for Decentralised Autonomous Organisation.)
Here’s how RedemptionDAO describes itself:
RedemptionDAO is a movement to purchase rainforest in the Democratic Republic of Congo and co-create nature-based revenue streams with the Congolese people.
RedemptionDAO aims to raise enough money to win at least one of the blocks of land on auction. “After winning,” it states, “we will establish a network of community land trusts and demonstrate that nature-based revenue streams can be more profitable than selling oil.”
The first problem is that the DRC government is only inviting oil and gas companies to bid. RedemptionDAO says it will “work with the Congolese government to open up the auction to more parties”. Having got permission to submit a bid, RedemptionDAO aims to “raise the capital necessary to win at least one block of land”.
RedemptionDAO aims to “Co-create a new model for rainforest stewardship and nature-based revenue”:
Ultimately, we believe there exist better economic models for preserving the natural wealth of the earth. We will work with government and local organizations to establish community land trusts. At the same time, we will also work with leading buyers of carbon credits and other nature-based services to create long-term revenue streams for preservation of the land.
A post on The HBAR Foundation’s website explains that,
Formed by members of ReFi DAO, Dream DAO, and Climate Collective, RedemptionDAO now has cross-organizational support from leading players in Regenerative Finance including The HBAR Foundation, dClimate, members of Flowcarbon, Protocol Labs, Gitcoin, Regen Network, and many more.
Phil Fogel, co-founder of Flowcarbon, says that, “The RedemptionDAO movement is showcasing the best qualities of Web3 and the ReFi space, the ability for a community to come together quickly and start collaboratively working together to build an organization and coordinate capital from scratch in just a few days.”
Flowcarbon isn’t going well. After raising US$70 million, Flowcarbon recently postponed launching its carbon offset backed “Goddess Nature Tokens” because the crypto market has crashed. In fact, in the six months since November 2021, more than US$1 trillion was wiped off the value of cryptocurrencies.
And RedemptionDAO has so far achieved nothing. It is not eligible to bid for the oil and gas blocks in DRC because it is not an oil or gas company and it’s not been invited to bid. Even if RedemptionDAO succeeded in buying one or more blocks, the DRC government could seize the block at any time in the future and auction it for oil exploration. Then there are the royalties on the sales of oil and gas – which is why the government is auctioning the blocks. RedemptionDAO has no business model that can compete with the revenue from oil and gas.
Mpanu: “Our priority is not to save the planet”
In an interview with the New York Times Tosi Mpanu Mpanu, DRC’s lead representative on climate issues, and an adviser to the minister of hydrocarbons, explained that the goal of the auction is to earn money and generate economic growth. “Our priority is not to save the planet,” Mpanu said.
Mpanu told the New York Times that DRC could protect areas of forest outside the oil and gas blocks:
“If we lose 10 hectares we could now protect 20. Sure, it won’t have the same biodiversity and fauna, but the country has that right.”
This is not protecting the rainforest and the rights of the Indigenous communities that live in and around the forest that will be destroyed by oil and gas exploration. This is Banking Nature: Profiting from extracting fossil fuels, which destroys the climate and the forest, while also profiting from the sale of carbon offsets and biodiversity offsets from other areas of forest.
In May 2022, Didier Budimbu, DRC’s minister of hydrocarbons, said the country could produce up to 1 million barrels of oil per day. That’s US$32 billion a year, at current prices. Or more than half of DRC’s gross domestic product.
In April 2022, DRC’s President Félix Tshisekedi took part in US President Joe Biden’s Leaders Summit on Climate. At the meeting Tshisekedi said,
“Achieving carbon neutrality will not be possible without taking into account the conservation and regeneration of forests, but the current price of forest carbon, at $5 per tonne, is neither fair nor realistic. A fair price for forest carbon that incorporates foregone opportunities should be at least $100 per tonne.”
In September 2022, at the next meeting of the Carbon Fund of the World Bank’s Forest Carbon Partnership Facility, one of the items on the agenda is a proposal to increase the price of carbon credits from US$5 to US$10.
In October 2021, in the run up to COP26 in Glasgow, Tschisekedi wrote an article for the Financial Times. “Africa is tired of waiting,” he wrote. At the time, Tschisekedi was chair of the African Union. He urged rich countries to fund the African Union’s Africa Adaptation Acceleration Program to the tune of US$5 billion a year for the next five years:
Five billion dollars a year is a small change — the world spent $20tn to fight Covid-19 — but the key is that this initial capital will help Africa to create much more, through new financial instruments and by de-risking resilience projects to attract private investors.
Tschisekedi concludes his article with something that looks, given what the country is currently proposing, like a threat:
Let us remember that Africa’s ecosystems provide free crucial services to the world. African forests and oceans serve as natural carbon sinks. It is time for Africa to be compensated — for the good of the continent and the planet. We have waited long enough.
Needless to say, COP26 failed to give the African Union the money it was asking for. Instead rich countries and the Bezos Earth Fund offered US$1.5 billion between 2021 and 2025.
Can REDD save Democratic Republic of Congo’s forests?
Over the past 15 years, there have been several initiatives aimed at protecting DRC’s forests by trading the carbon stored in them. All of them have failed to reduce deforestation in the country. In 2021, DRC lost 499,000 hectares of primary forest – the second highest rate of deforestation in the country ever.
In November 2021, the Central African Forest Initiative signed a US$500 million deal with DRC for the period 2021 to 2030. Under the deal DRC can destroy even more forest, up to “a maximum of 667,867 hectares” every year. The deal encourages industrial logging and the lifting of DRC’s moratorium on new logging concessions.
A report published last year by Action pour la Promotion et Protection des Peoples et Espèces Menacées (APEM) and Rainforest Foundation UK highlights the problems with two REDD projects in DRC: the Integrated REDD+ Plateau Project (PIREDD Plateau) managed by the World Wide Fund for Nature (WWF); and the Wildlife Works Carbon (WWC) Mai Ndombe REDD+ project.
The World Bank’s Forest Carbon Partnership Facility signed an Emission Reductions Payment Agreement with DRC government at the end of 2018. The negotiations between the Bank and the DRC government were a shambles, and the deal has failed to reduce deforestation.
dClimate already tried to sign a US$1 billion deal in Democratic Republic of Congo. Without success
In May 2022, an article on The Africa Report website described a planned US$1 billion carbon credit deal between dClimate and the DRC environment ministry. dClimate is one of the initiatives involved in RedemptionDAO.
According to the article, “a memorandum of understanding was recently the topic of discussions between the Congolese environment ministry and the American company dClimate”.
Negotiations began in January 2022, when a delegation from dClimate visited DRC. The deal is supposed to protect 500,000 hectares of forest for 10 years. The Africa Report article explains that,
Discussions continued in March with the arrival in Kinshasa of a large American delegation led by Brian Nelson, US Treasury Under Secretary for Terrorism and Financial Intelligence. dClimate founders Philip Heilberg and Si Jha presented their project to the Congolese authorities and in particular to Deputy Prime Minister and Minister for the Environment Ève Bazaiba. The goal is to develop a system for registering carbon credits in the DRC and to enable their monetisation.
But five months after negotiations began, talks “appear to have stalled”. In April 2022, a delegation from dClimate visited DRC to finalise the project without success. The Ministry for the Environment told The Africa Report that there was a “procedural problem” and that, “the project is still under discussion and will soon be presented to the government at the Council of Ministers.” And the Ministry for Environment added that any area larger than 300,000 hectares can only be allocated by the president.