California’s Interest in Overseas Carbon Offsets Schemes Makes Some Greens See Red

A plan by the state of California to include overseas forest conservation projects as part of its carbon offset scheme is drawing criticism from some environmental and Indigenous groups who say the effort will do little to reduce greenhouse gas emissions. If that weren’t confusing enough (for non-policy wonks), the controversy is further convoluted by the fact that partisans on each side of the issue can’t even agree on which programs are supposed to be involved. The confusion is emblematic of the how the entire offset infrastructure is less-than-transparent.

photos courtesy Orin LangelleThe Mexican state of Chiapas scrapped its only REDD+ pilot project earlier this month. It was
plagued by a lack of clear objectives and had failed to take into account historic tensions
over land rights in the region.

A few weeks ago I wrote an in-depth report about why carbon offsets, especially forest offsets, are problematic and how they could undermine California’s new cap and trade program that aims to cut the state’s greenhouse gas emissions to 1990 levels by 2020.

So far, California restricts offsets to US-based carbon capture projects. But it is considering including offsets from a controversial program called Reduced Emissions from Deforestation and Degradation (known as “REDD+” by policy people), which offers carbon credits for preserving natural forests and forest plantations in developing nations. REDD+ projects, that are all in pilot phases currently, are so ridden with problems that the European Union in 2008 banned the use of forest offsets in its Emissions Trading Scheme until 2020 citing too many “unresolved monitoring, reporting, verification and liability questions.”

But what the largest carbon trading market in the world rejected, California appears to be willing to take on. In 2010 it signed Memorandum of Understanding with Chiapas, Mexico, and the Brazilian state of Acre to set up an arrangement that would allow carbon offsets from REDD+ projects in these states to be included in the California cap-and-trade program. A REDD+ Offset Working Group, which includes technical experts from all three states, has been working on figuring out a framework that would enable California to use REDD+ offsets. The group has come up with recommendations and submitted its final report* on July 17 to the California Air Resources Board (ARB), the main state agency writing regulations to fight global warming.

Supporters of REDD argue that reducing deforestation offers an easy and cheap way of cutting back greenhouse gas emissions. But critics say the “pay-to-pollute” scheme that relies on market forces, one the key drivers of deforestation in the first place, to tackle deforestation is inherently flawed.

“With REDD, when you look at how these policies are implemented, its basically making nature itself into a kind of tradable commodity; it’s setting up markets to trade clean clean air or other natural assets around the world,” says Kathleen McAfee, a professor of international relations at San Francisco State University who studies global markets for environmental services. “But the problem with markets is that they generally tend to distribute wealth upwards – from the less wealthy to the more wealthy. And in the particular case of REDD you can really see this. Any time you have trading between highly unequal societies or highly unequal communities, the result is that the less empowered and less wealthy lose. And that’s what is happening here.”

That’s why many human rights advocates, Indigenous Peoples’ organizations and some environmentalists are fiercely opposing REDD+ projects. From the nonprofit research group Carbon Trade Watch:

“REDD+ projects have already proven to be fundamentally unjust. Indigenous and forest-based communities have few formal titles to their lands and many are still struggling for legal mechanisms that recognize their rights and territories. In this regard, REDD+ has already encouraged forest enclosures, militarization, fraud, coercion, forced displacements and evictions in Kenya, Congo, Papua New Guinea, Brazil and many others.”

The group says despite being such a contested issue, REDD+ projects are already happening simultaneously on different levels outside the UNFCCC framework, through national and sub-national programs like the one being mulled in California.

While the California Air Resources Board says it hasn’t made a final decision on whether it is going to include REDD offsets, Chiapas and Acre are already working on REDD+ projects that they hope the board will approve. But it appears the projects in both states have been facing some resistance on the ground.

As an earlier Journal report details, the REDD+ project being worked out in Chiapas’ Lacandon Jungle had already run into trouble as far back as two years ago. It was plagued by a lack of clear objectives and had failed to take into account historic tensions over land rights in the region.

In recent comments to the REDD Offsets Working Group, the Indigenous Environmental Network noted that even the “the supposedly exemplary case, State of Acre,” had problems. IEN said Acre officials “have not sought through meaningful consultation, [Indigenous people’s] free, prior and informed consent to REDD+ on their territories nor the time, place or manner of the imposition of REDD+.”

Then, late last week, the environmental group Friends of the Earth (FOE) sent out a press release saying that the state government of Chiapas has scrapped its REDD+ project. The release relied on an interview in the Chiapas daily El Heraldo where the Mexican state’s environment secretary, Carlos Morales Vázquez, was quoted as saying that the project “was an utter failure” and had been cancelled. FOE noted that it was likely that the project could be moved to other areas since Chiapas was still referring to REDD+ as a keystone of the state’s climate change strategy.

(To muddy the waters some more, the same day as FOE sent out its presser, Code REDD – a San Francisco-based nonprofit that partners with corporations to “profitably integrate REDD+ into their business strategies”— sent out a its own press release in support of REDD+ in California’s climate policy that was signed by “key stakeholders,” including global NGOs like Conservation International and Indigenous community leaders.)

In California, the REDD Offsets Working Group responded to the FOE release by calling it misleading. In an email to me, Tony Brunello from the REDD Offset Working Group called the FOE release “poorly researched” and said the project in concern wasn’t one that ROW was looking at. He directed me to this article and asked me “to do a little more homework.” So I did. Because, really, I’ve been following the Chiapas story for quite a while, and as far as I knew, there was only one REDD+ project being worked on over there.

I contacted Jeff Conant, who’d written about Chiapas for the Journal earlier. Conant now works on REDD issues with FOE. Here’s what he had to say:

“Until we received formal notice (scroll down the linked document for English translation), on Friday July 19, of the Chiapas administration’s plan to cancel the former REDD effort and move ahead with a program more fully integrated into the ROW process, our understanding was that the REDD program of the state of Chiapas was the self-same program instituted by Governor Juan Sabines in 2011, and which we have documented and strongly criticized.”

He said the cancelled program was frequently referred to as REDD+ by the Chiapas administration and that until this point there had been no public disavowal of the program either by the state officials or by members of the REDD Offsets Working Group.

Curiouser and curiouser! I relayed his response back to Brunello and got this emailed comment in return:

“It is a great thing Chiapas is revising their jurisdictional forest carbon program to better align with ROW recommendations. The project they cancelled was one constantly criticized by all for not being a red (sic) project.”

Am I the only one seeing some mixed messaging here?

This odd mix-up isn’t much of a big deal in the end, but it does serve to reinforce just how convoluted, fractious, and lacking in transparency the whole REDD+ process is and how difficult it is to oversee projects from thousands of miles away.

As San Francisco State’s McAfee says: “There’s so much conflict of interest, there’s so much uncertainty, that the greater the distance between the purchaser of the permit to pollute and the actual activity that is allegedly resulting in less environmental damage, the less the likelihood that there’s actual net environmental gain.”

I asked Brunello (via email), given how problematic these projects seem to be, why was California was still considering REDD+ offsets? He didn’t reply.

But the answer is pretty simple – the state needs to be able to supply business with more offsets. The cap-and-trade scheme allows polluting companies to meet up 8 percent of their emissions reductions requirements via ARB pre-approved offsets. That 8 percent number can add up to a lot – more than 200 million tons of carbon offsets over the next eight years. (Once the offsets program is up and running, that is; it’s scheduled to start this summer).

“We think there’s not going to be enough supply… everybody’s on agreement on that,” says Belinda Morris, California director of the American Carbon Registry, one of the two agencies certifying offsets in the state. Morris and other market analysts predict that forestry, which they say has the greatest potential for producing offsets, is the sector where the bulk of California’s offsets will be generated.

Bottom line, if California is going to use offsets in such high volume, and if it wants them cheap, it will have to look at forests beyond US borders.

Postscript: REDD+ offsets also face a legislative challenge in California – Senate Bill 605. Authored by Senator Ricardo Lara (D-Long Beach), the bill, which has received little publicity so far, includes a proposal to limit the offsets used to ones generated by projects within the state of California. The idea is that this would give priority to reducing pollution within California. The bill has been passed by the Senate Committee on Environmental Quality and is now with Senate Committee on Appropriations. Reuters Point Carbon analysis, says the bill, if passed, would reduce the supply of offsets by 85 percent. It predicts the bill has only a 20 percent chance of passing in its current form.

* An earlier version of this report said the REDD Offsets Working Group was scheduled to submit its final recommendations this summer. In fact, ROW has already submitted its recommendations. This article has been revised to reflect this information.