WRM Bulletin Nº 92- Carbon Shop / March 2005

Issue Number 92- March 2005

Index - Viewpoint - Africa - Asia -South America

THE CARBON SHOP FILES

V&M do Brazil's carbon plantations proposal backfires
BioCarbon Fund = data_fiddling_Inc.jail.com?

- V&M do Brazil's carbon plantations proposal backfires

For the second time, the Clean Development Mechanism's (CDM) Executive Board has rejected the reasons of Vallourec & Mannesmann do Brasil for requesting carbon credit money for industrial tree plantations.

At a meeting in Germany (23-25 February) the Executive Board of the Kyoto Protocol's CDM decided to follow the recommendation of its Methodologies Panel to reject the latest draft of the V&M do Brazil “avoided fuel switch” project methodology. This technical document is the basis on which the amount of carbon credit, that a CDM project can sell, are based. In it, V&M do Brazil argues that only through additional income from the sale of carbon credits can it continue using charcoal from its eucalyptus plantations for pig iron smelting. Otherwise, it says, it will have to use coal – a more harmful fuel climatically.

Many doubts have been raised about the credibility of these claims. When it first rejected V&M's reasoning in May 2003, the CDM Methodologies Panel pointed to “doubts” about the scenario presented by V&M; that without additional carbon money a switch to coal under current trends in the Brazilian pig iron industry would be unavoidable. In February 2004 the Panel expressed concerns about the “immaterial nature of the project activity and the moral hazard related to the fact that [it] consists of continuing current practice.”

The decision to reject the V&M proposal for the second time bodes ill for the equally controversial Plantar project, which also includes an “avoided fuel switch” component. The Plantar project, which will expand eucalyptus plantations on 23,000ha of “cerrado” land (savanna), is promoted by the World Bank's Prototype Carbon Fund as the fund's only carbon sink project but has been criticised by numerous Brazilian civil society organisations for its negative environmental and social impact. NGOs criticised the proposed expansion of tree plantations, saying that carbon credits generated by tree planting are climatically worthless, among others because emission reductions from tree planting cannot be sufficiently verified.

The CDM Board decision adds yet more weight to the arguments of those who have long maintained that tree plantations' ability to absorb any specifiable amount of carbon from the atmosphere is unverifiable and that tree planting to generate carbon credits is not a solution to averting dangerous climate change. Instead, it diverts attention away from creating efficient energy measures and economies based on renewable energy use.

By Jutta Kill, SinksWatch, e-mail: jutta@fern.org , web site: www.sinkswatch.org

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- BioCarbon Fund = data_fiddling_Inc.jail.com?

In early March 2005, the first carbon sinks project promoted by the World Bank's BioCarbonFund entered the first stage of registering as a CDM project under the Kyoto Protocol. Around the same time, a template document for BioCarbonFund sinks project developers to estimate sequestration rates was posted on the World Bank carbon finance website. The template used some slightly irreverent examples to illustrate how to fill in certain fields. The highlight was in the section “Contact (preferably email)” which was filled in “ fred@data_fiddling_Inc.jail.com ”.

SinksWatch has long argued that calculations to determine the amount of carbon cycling in a forest for carbon credits are flawed and that the figures cannot be verified because of the complex and ever-changing nature of how carbon cycles between forests, atmosphere and oceans. This natural exchange of carbon between forests, atmosphere and ocean distinguished biological carbon in e.g. trees from fossil carbon, which without human intervention (.i.e. fossil fuel burning) will rarely enter the atmosphere. Carbon storage in trees is thus very temporary and tree plantations acting as a ‘carbon sink' today may well turn into a ‘carbon source' in the near future. As Sten Nilsson of the International Institute for Applied Systems Analysis (IIASA) in Austria pointed out in a 2000 publication "The current state of knowledge regarding carbon sources and sinks cannot determine the levels and flows of carbon with sufficient accuracy to form the basis for the [Kyoto] Protocol and any viable trading scheme."

Proponents of carbon sinks projects, like the BioCarbon Fund, are trying to do the impossible regardless, pretending that the calculations put forth in their technical project documents are of an accuracy that many scientists argue cannot be achieved.

But maybe fred@data_fiddling_Inc.jail.com is not only beginning to doubt the sinks rhetoric of the World Bank's carbon finance unit. Could he also be concerned about potential “Inc.jail” risks? At a presentation at COP 10 in Buenos Aires in December 2004, cement company Holcim -who were involved in developing CDM projects but then pulled out– stated that t he CDM in its current form will create "other Enrons with project developers" and "other Arthur Andersens with auditors and desk reviewers". Inc. jail?

By Jutta Kill, SinksWatch, e-mail: jutta@fern.org

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