REDD Project in Brazil Nut concessions in Madre de Dios, Peru finally started paying communities a decade after the project started. “I’m still lacking money,” says one community member

By Chris Lang

The Wall Street Journal recently reported from Peru about the “opaque network of traders, registries, raters, governments and investors that each can take a slice of the transactions” when carbon offsets are sold from REDD projects.

The Wall Street Journal looked at two projects in Peru: the REDD Project in Brazil Nut concessions in Madre de Dios; and the Cordillera Azul National Park REDD Project.

REDD Project in Brazil Nut concessions

This post focusses on the REDD Project in Brazil Nut concessions – a project that has featured on REDD-Monitor four times. In 2021, the project sold carbon offsets to a company called Creol to offset the emissions generated from massively polluting blockchain transactions associated with the generation and sale of Non-fungible Tokens (NFTs). Meanwhile, a look at the project area on Google Maps revealed clear signs of logging, gold mining, and forest clearing operations in and around the project area:

A few weeks after that post, the Monitoring of the Andean Amazon Project put out a report titled, “New illegal gold mining hotspot in Peruvian Amazon – Pariamanu”. The report showed that illegal gold mining was taking place inside some of the Brazil Nut concessions that were part of the REDD project:

In November 2021, a Guest Post by Simon Counsell looked into the way the project falsely generated credits. Verra, the standards setting organisation responsible for certifying the vast majority of REDD projects, should never have verified the project:

And in May 2022, REDD-Monitor wrote about the project again, based on an assessment by Elias Ayrey who was previously lead scientist with the rating agency and carbon offset sales company Pachama. Ayrey says he was “just flabbergasted” when he looked into the project. He describes the offsets generated from the project as “worthless” and adds, “There has been intense deforestation inside this project.”

The journalists with the Wall Street Journal Shane Shifflett and Ryan Dube, uncover yet another serious problem with the REDD Project in Brazil Nut concessions. Very little of the money from sales of carbon offsets from the project has reached the communities who are supposed to be conserving the forests.

“I’m still lacking money”

Shifflett and Dube spoke to Lenardo Racua who, more than ten years ago, agreed to join the REDD Project in Brazil Nut concessions. But Racua received his first payment of US$8,000 only in 2021.

He spent the money on a dozen pigs and a solar panel. He now has electricity for the first time and can keep a light on at night to protect his pigs from jaguars.

“What they told us is to take care of the forest, don’t cut down any more trees,” he told the Wall Street Journal. “Things have changed a little, but I’m still lacking money.”

The money that Racua received was his share of almost US$4 million that the project developer, Bosques Amazónicos, paid out to 400 people living in the project area.

Bosques Amazónicos told the Wall Street Journal that in 2021 the company made about US$17 million in revenue and US$12 million in profit from sales of four million carbon offsets. The Wall Street Journal reports that the ultimate buyers of the offsets probably paid somewhere between US$15 million and US$30 million for them.

“We did everything by the book”

The Wall Street Journal reports that,

Jorge Cantuarias, an economist who founded Bosques Amazónicos, said there were no payments until last year because sales prior to 2020 were limited and the project was barely able to cover expenses. The company has recently agreed to boost the share of revenue given to residents to 50% from 30%.

Cantuarias told the Wall Street Journal that “We did everything by the book. How can people question me?”

With this comment, Cantuarias has inadvertently hit the nail firmly on the head. The “book” he’s referring to was written by Verra. And the book was well and truly cooked before Cantuarias got involved.

Verra has a clear conflict of interest: For every carbon offset issued, Verra receives US$0.10. Clearly, the more carbon offsets a project issues, the more money Verra makes.

REDD projects rely on a counterfactual baseline to generate offsets. These baselines are stories about what would have happened in the absence of the REDD project. They are impossible to verify, for the simple reason that the project did go ahead.

This is a problem faced not just by the REDD Project in Brazil Nut concessions, but by all REDD projects. “The problem is not ‘bad baselines’ but the concept of counterfactual baselines itself,” as Larry Lohmann of World Rainforest Movement points out:

Project developers have an interest in exaggerating the threat to the forest because they can then sell more carbon offsets. Verra has no interest in addressing this fiction, because the more carbon offsets generated, the more money Verra makes.

“They only verify the bits of the project that weren’t deforested”

In the case of the REDD Project in Brazil Nut concessions in Madre de Dios, Bosques Amazónicos came up with a simple solution. Here’s how Elias Ayrey describes it:

Rather than verifying the entire project whenever they want credits, they only verify the bits of the project that weren’t deforested. There are actually bits of this project that were started inside the project, weren’t verified one year because there was deforestation, were verified the next, weren’t verified the next, and then were verified the final time.

So these guys are literally only counting forest conservation when it happens. They don’t count deforestation when they don’t want to. And, this is cheating, obviously. . . .