THE CARBON SHOP FILES

- Asian Development Bank joins World Bank in promoting industrial scale carbon sinks projects in the South

It sometimes takes many little pieces to recognize the full picture. In the case of the continued debate about the benefits or otherwise of carbon sinks projects linked to the Kyoto Protocol's Clean Development Mechanism (CDM), many still like to envisage it as the long-sought-for funding source for community-driven, small scale forest restoration projects. However, recently published information about feasibility studies carried out by Japanese Sumitomo Forestry and the Asian Development Bank's involvement in promoting carbon sinks projects in Indonesia provide further indication of what the future CDM carbon sinks market will have on offer: carbon credits generated by industrial monoculture tree plantations. And if the comments made by Malaysian Primary Industries Minister Lim during his recent tour through Europe are an indication of what's being discussed, CDM carbon finance could subsidize not only industrial eucalyptus plantations such as the World Bank's PCF Plantar project in Brazil, but also the expansion of oil palm plantations in Southeast Asia.

Funded by the Canadian Cooperation Fund for Climate Change, the Asian Development Bank's "technical assistance" to the Indonesian government will include "a position paper on CDM-carbon sequestration projects for Indonesia for discussion at COP9" and two pilot sinks projects. COP 9 --the 9th conference of the parties to the Convention on Climate Change-- will have to come to a decision on the rules for carbon sinks projects that intend to claim credits through the Clean Development Mechanism. There is still wide disagreement by governments as to the shape of these rules, and funding of this ADB project by the Canadian government begs the question of how purely 'technical' such assistance will be. This question arises even more strongly from the 'Outline Terms of Reference for Consultants', which states that the consultant is expected to ensure that 'output on land use inventory and LULUCF [Land Use, Land-Use Change and Forestry] modeling are in keeping with objectives of the T[echnical] A[ssistance]".

But Indonesia is not the only country where ADB is promoting carbon trading of climatically worthless sinks credits (see http://www.sinkswatch.org and http://www.wrm.org.uy/actors/CCC/index.html for a detailed critique of the flaws of trading carbon sinks credits). In Laos, the ABD hired carbon consultancy Ecosecurities to assess whether ADB-funded plantations in Laos are eligible under the Kyoto Protocol's CDM. Ecosecurities is a major CDM project developer who was involved in designing the Plantar project in Brazil. This decision to contract one of the major consultancies providing services essential for CDM carbon sinks projects raises the question of conflict of interest: hiring someone commercially involved in CDM forestry to advise ADB on the feasibility of CDM sinks prospects in Laos is like asking a dairy farmer whether milk is good for you.

And then there is the history of ADB-funded plantations in Laos, which have replaced natural forest with monoculture eucalyptus trees for the production of wood chips, thus contributing through its policy advice and implementation to the release of carbon into the atmosphere. Whilst ADB claims that planting was only carried out on 'degraded' lands, the reality is that the ADB has been funding the replacement of villagers' community forests, swidden fields, grazing land and commons with monoculture eucalyptus plantations. (see also WRM Bulletin No 68: "Laos: Secrets, lies and tree plantations").

With regards to Indonesia, the ADB describes 12% of Indonesia's 108 million hectares of forest land as 'presently idle and unproductive' and as 'potential areas for carbon sequestration through forestation under the CDM'. The potential volume of credits that could be generated is huge --as is the danger that these lands are neither 'idle' nor 'unproductive' in villager's views.

Those figures, added to the ADB's track record in promoting industrial tree plantations across Asia and the keen interest in these initiatives of both the Canadian and the Japanese Governments, both stern advocates for a widest possible carbon sinks loophole in the Kyoto Protocol, doesn't bode well for those envisaging the CDM as a source for small-scale, community driven forest restoration projects.

By: Jutta Kill, SinksWatch, e-mail: jutta@fern.org ; http://www.sinkswatch.org

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What's wrong with a company pursuing a green seal for 'sustainable forest management' and a climate-friendly credit for planting trees that help soak up carbon from the atmosphere? Potentially a lot, especially when both of these claims are rather dubious, as the WRM Bulletin coverage on the Brazilian company Plantar S/A indicates. And even more problematic if a company, when faced with criticism about its carbon sinks project, resorts to such tactics as the distortion of facts to discredit its critics.

And yet again, Plantar serves as a case in point: In a letter to prospective buyers of Plantar's 'carbon' credits, the company claimed that a Brazilian civil society letter dated 26 March 2003, which was critical of the company's envisaged sale of 'carbon' credits, included signatures which had been added to the civil society letter without the signatories having been informed about this. The allegation was then repeated unquestioningly at public conferences in Europe by the Management of the World Bank's Prototype Carbon Fund, under whose auspices Plantar's 'carbon' credits will be sold.

This is a rather serious allegation, clearly aimed at tarnishing the reputation of those raising their voices against the company's activities. The allegation is false, and a simple comparison of names mentioned in the different letters would have revealed the falsehood of the company's allegation. Given the impact that the repetition of these false allegations by a senior World Bank official had on their credibility, 77 Brazilian groups have recently demanded a written apology and public correction of facts from the PCF Management.

What the PCF will learn from this episode, and a recently announced investigation into the "NGO allegations raised in the civil society letters" remains to be seen. For SinksWatch, such unquestioning repetition of company information certainly raises even more questions about the scrutiny the PCF applies to project information received from project proponents. Following the PCF approach of 'learning by doing', SinksWatch has learned that the PCF's Plantar project's 'carbon' credits are doing nothing to help avert dangerous climate change but increasing hardship for local people. The lesson: no 'carbon' credits from Plantar are good 'carbon' credits.

By: Jutta Kill, SinksWatch, e-mail: jutta@fern.org ; http://www.sinkswatch.org