As has become commonplace at such gatherings, the theme this week at the United Nations Climate Summit (“COP28”) has been reducing carbon emissions. The underlying, more sinister theme is to reduce emissions worldwide and is tantamount to modern-day colonialism.
The Financial Times reported there is a “looming land grab” in Africa by corporations in richer countries to purchase land in Liberia, Zimbabwe, Kenya, Tanzania, and Zambia for “carbon credits,” which is a colossal ruse.
“The [methods] of exploitation might be new but the consequences are not so different to the last 200 years of land grabs in Liberia,” an expert on civil society’s role in forest governance in Liberia said.
Read more: Undercurrent at the UN Climate Summit – Green Colonialism, CFact, 6 December 2023
The following has been paraphrased from the article titled ‘The looming land grab in Africa for carbon credits’ published by the Financial Times. You can read the full article HERE.
Carbon credits are part of the United Arab Emirates’ (“UAE’s”) official strategy to cut its national emissions by 2030. Through a company founded by a member of Dubai’s royal family, Blue Carbon, discussions are taking place to acquire management rights to millions of hectares of land in Africa.
The scale is enormous. According to the Financial Times, the negotiations involve potential deals for about a tenth of Liberia’s land mass, a fifth of Zimbabwe’s, and swaths of Kenya, Zambia and Tanzania.
The founder and chair of the privately owned Dubai-based company is Sheikh Ahmed Dalmook al-Maktoum, a member of Dubai’s royal family. Under an unfinished international accounting framework for carbon markets being designed by the United Nations, Blue Carbon intends to sell the emission reductions linked to forest conservation in African and South American nations as carbon credits. Blue Carbon is among the most active private brokers in this carbon market that is being designed for and by governments.
Climate negotiators at COP28 have been looking to finalise this UN framework to kickstart a new market in carbon credits which would allow countries to shrink their own carbon footprints by buying emission reductions from others.
The trade is supposed to be simple. The 195 countries that have signed the 2015 Paris Climate Agreement committed to setting targets for reducing their carbon emissions by 2030. If a country exceeds these or future targets, it can sell those additional emission reductions to another country.
The governments of the UAE, South Korea, Switzerland and other countries have been wagering that these international carbon markets will play a major role in the climate solutions offered to world leaders at COP28.
The current global carbon credit market is valued at nearly $2 billion. Approximately four out of ten carbon credits traded are based on nature restoration projects. To achieve their own reduction targets, private buyers – from businesses to individuals – can purchase offsets for their own emissions. Brokers similar to Blue Carbon obtain rights to buy and sell carbon credits, taking a cut of their value.
But the scale and speed of dealmaking between countries over available land have sparked concern about a lack of guardrails around this system.
Community leaders and activists in the countries where Blue Carbon is active say that seller countries are not being given enough time to develop a natural resource strategy that would promote a fair trade in carbon credits. Key issues include revenue-sharing, land rights and the potential impact on the host countries’ ability to hit their own climate target.
“The [methods] of exploitation might be new but the consequences are not so different to the last 200 years of land grabs in Liberia,” says David Young, an independent expert on civil society’s role in forest governance in the country. “The promises to the communities are vague and unpredictable and it’s like logging or mining or palm oil all over again.”
Until recently, governments had steered clear of buying and selling directly into this market. But as countries are increasingly pressured to reach targets to cut national emissions by 2030, importing carbon credits at scale has become increasingly attractive. And as plans for a national scheme have emerged, there has been a new rush for access to resources in countries rich in biodiversity.
South Korea, Switzerland, Japan, the UAE and Singapore are among the states to have struck 95 preliminary deals since the start of 2021 to buy future emission reductions from countries including Ghana, Vietnam and Senegal, according to data from MSCI carbon markets.
However, some of the earliest deals are being criticised for their lack of transparency and accountability, for example, Liberia. Unlike other nations that Blue Carbon has approached, Liberia does not yet have a law governing the sale and taxation of carbon credits.
A copy of Blue Carbon’s memorandum of understanding with Liberia, dated July and seen by the Financial Times, proposed to give the Dubai-based company exclusive rights to generate and sell carbon credits on about 1 million hectares of Liberian land. It would receive 70 per cent of the value of the credits for the next three decades, and sell these tax-free for a decade. The government would receive the other 30 per cent, with some of this going to local communities.
Community consultation was due to take place between August and November. But Andrew Zeleman, who helps lead Liberia’s unions of foresters, says that the local leaders he engages with on the land have still not been consulted about the deal.
Activists have heavily criticised the proposed deal. Groups including the Rainforest Foundation UK, Friends of the Earth and Earthsight have said that allowing a foreign company to manage such a big portion of Liberian land would endanger the livelihoods and community land ownership of up to a million people.
The government was “handing over decisions about how a substantial part of its carbon emissions for the next 30 years are to be managed [to] a UAE firm that has existed for less than a year, and which has no track record in carbon trading,” they said in a letter earlier this year.
Wilson Tarpeh, head of Liberia’s Environmental Protection Agency says that no contract with Blue Carbon has yet been signed. He estimates that Liberia had 2 billion tonnes of carbon dioxide locked in its forest, absorbed through photosynthesis. “The size of the carbon stock is huge, so anybody will be tempted to sell our carbon,” he says. “But it has to be a rules-based system. It’s not like buying a candy bar.”
Ministers of South America’s Suriname, another country almost entirely covered in tropical forest, received a similar offer to Liberia when they met with al-Maktoum in Blue Carbon’s offices in Dubai in August.
Suriname has a gross domestic product per capita that is about 10 times greater than Liberia’s. Additionally, its government has more than a decade of experience engaging with financing mechanisms for emission reduction, including under the UN’s ill-fated Clean Development Mechanism, which had its roots in the 1997 Kyoto Protocol eventually superseded by the Paris Agreement. So, Suriname’s ministers were better able to push back against Blue Carbon’s initial proposal to take a significant cut of future carbon credit revenues.
A person close to Suriname’s environment ministry confirmed that it was still considering Blue Carbon’s latest updated offer, alongside other offers for its 4.8 million credits tied to national deforestation reduction. But such offers can be hard to turn down.
“[Blue Carbon’s] pitch is that they have untold wealth from the royal family,” an adviser to Suriname on the deal says, a powerful incentive for poorer countries looking to insure themselves against volatility in carbon pricing.
Other countries have taken action to put safeguards around their arrangements. Shortly before Blue Carbon and Tanzania’s forestry agency signed a memorandum of understanding in February for the future development of 8 million hectares of forest, a strict taxation regime for carbon credit trading went into effect. Sixty-one per cent of the proceeds from the sale of carbon credits go to local governments.
Blue Carbon has not said what proportion of the credits it develops in Liberia, Kenya and elsewhere it would sell to the UAE versus selling these on to other countries, or potentially other companies.
One priority for negotiators at COP28 as countries battle over how to strengthen the framework for governments to trade carbon credits, is to avoid repeating mistakes made by corporate buyers and sellers on issues of accounting and human rights.
In particular, scientists have pointed to several flaws in the idea of issuing credits to reward a developer for protecting a forest from hypothetical future deforestation, as Blue Carbon is expected to do. For example, Verra, the largest accreditation body for voluntary credits, has been accused of over-crediting projects based on inflated projections of future deforestation. Claims that Verra has denied.
Under the UN’s emerging system, to avoid double counting between countries governments must cancel out carbon credits transferred to another country by inflating their own carbon footprint. So, countries need to strike a balance between attracting revenues and being able to meet their own climate targets. This could heighten the political risk for foreign developers of carbon credits because each credit sold makes it harder for a government to hit its own climate target.
The stakes are high when defining what counts as a carbon credit and who should profit from it. Honduras has already deployed a tenth of its standing army to protect its forest stock and to boost its chances of selling deforestation reduction credits to richer countries in future.
