Don’t Throw REDD out with the Bathwater
Just make sure the Safeguards work

I don’t recall who said it, probably Oscar Wilde, but whoever it was defines a cynic as just another disappointed optimist. Nowhere in our age would this be more true than in the arena of climate change.

A healthy skepticism in all spheres when it comes to what politicos and corporate honchos of all stripes and their pet boffins tell us is clearly warranted. Cynicism can even be an attractive quality, when accompanied by a reasonable degree of  self-knowledge. It’s dangerous however when motivated by prejudice, passivity, sense of hopelessness or mild doses of habitual paranoia. Cynicism does not automatically mean inaction or intellectual laziness, but is very often an excuse for both.

Opinion polls over the past year tell us the majority of people today no longer believe climate change is a threat. A year ago the majority was worried about climate change and wanted something done. I don’t buy it, the majority of us are worried but don’t know what to do about it. We’re confused by the science and conflicting claims, have little faith in our politicians, whom we feel are in the pockets of big corporations. We don’t want our lives made more difficult or expensive, especially when we have a strong sense that cheats will prosper at our expense (just like the bankers in the recent financial meltdown). In short, we have a strong suspicion we’re being railroaded.

Climate Change is Real

Meantime the planet continues to cook, glaciers melt, our over-fished seas turn toxic, our forests and wildlife disappearing, world population soars, hunger, disease and poverty are  endemic in many parts of the world. Rich or poor - we are drowning in our own filth. Great  progress has been made in many areas confronting these challenges and if we had all the time in the world, who knows, we might eventually achieve Great Society status for all - at least we had the luxury of dreaming that one day we might get there.

But not any more, we don’t. Climate change is the great game changer. The latest scientific consensus in a report released at the Copenhagen Climate Change Conference last December clearly states unless the world’s carbon emissions peak between 2012 to 2015 and drop substantially thereon in, we can kiss goodbye to all hope of keeping global warming below 2?C. If that happens, then all our hopes and efforts are vain as the Mother Nature imposes her own remedy.

One of the few hopeful things to come out of the Copenhagen meeting, which signally failed to agree to binding curbs on carbon emissions, was the decision to proceed and fund REDD, which stands for the Reducing of Emissions from Deforestation & Degradation. In brief, what this means is that a mechanism has been devised whereby rich countries pay poorer countries, fortunate enough to have large tracts of tropical forest left, large amounts of money not to cut them down. This is funded by the sale of carbon credits to companies wishing to reduce their carbon exposure, who cannot or will not do so themselves.

Benefits of REDD

The potential advantages are clear. Best of all, it would make a significant dent in global carbon emissions equal to all forms of transportation by air, sea and land annually. Our forests and peatlands are carbon sinks, the rain forest stores 300 billion tons Co2 equal to forty times our annual global total of GHG emissions. Plants convert Co2 into oxygen via photosynthesis thus regulating climate. Destroy the forests and you damage the process, putting any solution to climate change beyond human reach. You also release all that stored Co2 back into   the atmosphere. REDD serves to protect wildlife habitat and biodiversity, it protects the culture and traditional rights of indigenous peoples. It allows them to maintain their culture, by providing the means to pay for the modern facilities they want via better education, medical services, clean water & sewage treatment, roads and communication etc. In short, REDD promises to do all this and do more to avert catastrophic climate change than grounding all jets and banning coal. A rare and effective partnership of capitalism and conservation in action.

So what’s wrong with REDD? Nothing at all really. Properly implemented and monitored, with effective safeguards and sanctions, REDD can deliver on all of the above. However you do not have to be unduly cynical to spot where things could very easily go astray.

First of all, does it make sense to pay other people not to cut down trees so you can continue to pollute at will by buying cheap carbon credits? A good point, and exactly what the Australian government stands accused of by many international NGOs. How does that reduce GHG emissions globally? Clearly, governments and corporations in the developed world must take effective action to reduce Co2 emissions as well (Australia take note). But even if they don’t, we’d be even worse off if we destroy the forests. So let’s not be eco dogs-in-a-manger about it. Hatred of capitalism, corporate fat cats and cheats should not blind us to the merits of ideas like REDD.

What’s the Downside?

Let’s take a gallop through some of them.

Corruption: The countries with the most forest, Brazil, Indonesia, Congo, Papua, etc.) are not renowned for honest governance. These countries to varying degrees all continue to log anddegrade peatland. First there’s the central government, then the army, well-connected businessmen, the police, provincial and local government, all of whom will seek to be involved in the process. The need for stringent safeguards, monitoring and sanctions is very clear. However world bodies like the UN and the World Bank, IMF etc. have not historically shown themselves to be very effective in making sure the money does not get siphoned off by national élites.

Financing & Administration: Who’s actually putting all this  together? Inevitably there will be some wide boys getting in on the act, but usually it’s an NGO or group of international businessmen with connections to investment banks and their clients, large corporations in the mining, palm oil and agro-extractive industries operating in REDD host countries.

What about the traditional owners and their rights? Ownership is a complex legal question, which needs to be addressed with all parties beforehand, especially central governments whose various ministries fight to control what they rightly or wrongly  see as national resources. What do you do when the traditional owners want to have it both ways, taking the money for part of their land for REDD and flogging off other tracts to Sinar Mas and BHP Billiton? That’s within their rights too, logically.

The Money is Mega

The sums of money involved are potentially colossal. Here’s how it works with a pilot 150,000 ha REDD project in a remote part of Papua Niugini. An Australian Company ‘X’ acting as broker invests its time and money negotiating with the clans involved spending upwards of a year visiting and staying with them. Company ‘X’ is in competition with the big boys in LPG, nickel, gold, coffee, palm oil etc., who are all after clan lands too and promising much. Trust is established an agreement reached and Company ‘X’ goes to market looking for a few million US$ financing.

A typical valuation by World Bank standards shows 150,000 ha of virgin rainforest saved x 3% x 200 tonnes carbon per hectare saved is valued at between US$10 to $28 per tonne. That means this pilot project will earn between US$9.0m and $$25.2m per annum for 30 years. Company ‘X’ takes 20% of this and the  remainder is meant to go to the benefit of stakeholders in a manner to be agreed between all parties. Company ‘X’ warrants they will be the ones disbursing the money and ensuring it gets spent in the manner intended.

Meantime Company ‘X’ is in discussions for a much larger REDD project on a 760,000 ha slice of PNG rainforest. This would earn anything between US$25.6m to $71.6m per annum for a 30-year period. 20% of that - at a possible $14.3m per year for the next 30 years is a nice chunk of change. And if it works as it should, I reckon they earned it.

Other mega REDD projects are currently under way in Indonesia.The Norwegian government have undertaken to pay Indonesia $1 billion over the next 8 years on REDD projects. The Norwegians, unlike the Australians, will not use REDD as an excuse to avoid action on domestic emissions, are exercising due diligence and taking steps to protect the local stakeholders. In Aceh another mega REDD project is underway organized by a British NGO, which at least promises to monitor these aspects effectively. In Central Kalimantan the Australian government has backed another huge REDD project with backing from BHP Billiton who have coal mines in the area, which appears wanting when it comes to such safeguards.

For those of us here who are not part of the Indonesian political process, we can at least support those who are and organizations in our own countries seeking to cut emissions and expect internationally agreed safeguards for REDD projects are honoured.

Someone had to say it, and of course they have….better our forests are REDD than dead.