Carbon Credit Watch

Earning money from air by harvesting carbon

John Vidal
The Hindu
October 6, 2009

Rukinga ranch in southern Kenya prides itself on the immense herds of elephants, giraffe, lions and wild dogs that have made a home among its 32,000 hectares of acacia trees in the decade since cattle were banned. But the wildlife sanctuary’s guards, who risk their lives to defend the animals from poachers, face an even greater danger.

Rukinga is on the frontline of global deforestation: every month, dozens of gangs of commercial charcoal-makers are caught cutting down trees and building fire pits to make cooking fuel for the port city of Mombasa 150 km away. No one knows how many thousands of tonnes of trees are lost a year, but there are forecasts that the reserve could be like much of the land between it and the coast — semi-desert, treeless and devoid of animals — within 20 years.

This grim prediction could change this week if countries holding talks in Bangkok this week agree to back a U.N. plan to preserve the world’s forests by allowing owners to trade the carbon stored in endangered forests on condition the trees are not felled.

If the ranch’s owners can show that Rukinga’s trees and shrubs are under threat, and independent scientists can calculate the amount of carbon in its forest, the ranch could qualify as an international Redd (reducing emissions from deforestation in developing countries) project, attracting millions of dollars of carbon credits. The carbon saved would be traded on the growing market for voluntary carbon permits and, after 2012, when the successor to the Kyoto treaty should come into force, Rukinga could qualify as an official Kenyan government Redd scheme, attracting public money from Britain and other rich countries seeking to offset emissions they have legally committed to cut.

A British conservationist, Rob Dodwell, and a California-based dotcom millionaire, Mike Korchinsky, the ranch’s two main shareholders, say they have spent $400,000 in six months measuring Rukinga’s trees and getting a Redd application validated. Despite concerns about how open to fraud Redd projects are, they are determined to show it can be done properly. The carbon stored has been provisionally estimated at about 160 tonnes an acre (64 tonnes a hectare). At the present world price of carbon, that could earn Rukinga nearly $2m a year — a big return for land bought only 10 years ago for about $10 an acre ($4 a hectare). Dodwell and the 50 local community shareholders of Rukinga will continue to earn money from eco-tourism and cattle, but hope to earn a lot more from farming carbon.

“We calculate that one third of the money earned from carbon will go to protect the forest,” said Dodwell. “One third will be cash, like dividends for shareholders, and one sixth will go to the carbon broker. The rest is profit. About $600,000 would go back into the environment every year to protect the trees. It would secure the jobs of the 150 people who already work on Rukinga and it could lead to 100 more jobs.

“The local shareholders who own 10 per cent of the ranch would earn a lot of money. The wildlife would benefit from the habitat protection and it would cut climate change emissions.”

The local communities were at first bemused, but are now delighted. “When the idea was proposed, we thought, how can you earn money from air? We asked how you could harvest carbon. We wondered if you needed containers,” said Alphonse Mwaidoma, the chairman of nearby Kasigau ranch. “Now, everyone realises it will change everything. Some we would put to long-term development of the community and scholarships.”

Dodwell and Korchinsky are also planning to get a 730,000 hectare (1.8m acre) tract of virgin Cameroonian forest classified as a Redd project, potentially earning themselves and 10,000 forest pygmies who live there nearly $10m a year. They say they want local people and wildlife to benefit, but they accept the Redd system is open to abuse by organised crime and corrupt governments and businesses.

“There’s a great worldwide scramble going on to find land that would qualify for Redd schemes,” said Dodwell.

“Redd has the potential to be fantastic for communities but also to go horribly wrong. Logging companies may turn into carbon companies. In most countries in Africa you can do what you like, log out the trees, put in roads, do anything. There is little or no monitoring. The rewards could be 99 per cent for me and 0.5 per cent for the communities.”

There are signs that nascent Redd projects are already leading to social conflict, possible fraud and worsening land disputes. In July, the director of climate change in Papua New Guinea was suspended following allegations that unofficial carbon credits worth $100m had been issued from 39 potential Redd projects by an Australian-based carbon company. Landowners claimed they had been forced to sign over the rights to their forests by “carbon cowboys.” The scandal is embarrassing because Papua New Guinea, which has a history of illegal logging, is leading world efforts to have Redd schemes backed at the U.N. climate change talks, which culminate in Copenhagen in December.

In Indonesia, where 40 million people depend on forests, potential Redd projects are in limbo because much of the forest has never been surveyed and land ownership is fiercely disputed.

Communities are supposed to earn a share of Redd credit sales to pay for health, education and alternative livelihoods but, out of 144 Redd projects analysed by the International Institute for Environment and Development, only one included a proposal to make community-managed forests or indigenous peoples’ rights a binding part of Redd.

Hans Brattskar, the director of Norway’s forest and climate programme and whose country is funding the U.N.-Redd programme, said he envisaged some difficulties could be overcome by hi-tech surveillance mixed with on-the-spot monitoring by indigenous peoples. “We know that Redd will need new laws, land reform and new institutions,” he said. “But if countries do not perform they will not be paid. The consequences if we fail are enormous.” — © Guardian Newspapers Limited, 2009

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