BP among founding members of World Bank carbon fund

BP, responsible for the loss of around 5m barrels of oil in the Gulf of Mexico last year and annual carbon emissions greater than more than 120 developing countries put together, has become the world's first company to try to profit from a new World Bank carbon fund.

The oil company on Tuesday joined Britain, Germany and Norway as well as the EU and NGO Nature Conservancy as founding members of a fund designed to pay developing countries for reducing carbon emissions caused by the destruction of their forests.

The six initial Forest carbon partnership facility members have so far pledged $156m, with Germany and Norway believed to have donated the most. BP's share has not been made public but is thought to be modest. The company will be allowed to offset its own emissions via the fund, or could buy carbon offsets and sell them on the open market.

A BP spokeswoman said: "According to the Intergovernmental panel on climate change (IPCC), more than 30% of global greenhouse gas emissions emanate from agriculture and deforestation. By participating in these initiatives, we increase our understanding of the evolution of carbon markets and policy, as well as helping to catalyse the development of this important sector."

If global agreement on the UN's major deforestation initiative, known as Redd, can be made in the climate talks which resume next week in Bonn, the carbon fund intiative is expected to grow into a multi-billion-dollar scheme to reward countries who protect their forests.

"The Forest carbon partnership facility is designed to set the stage for a large-scale system of incentives for reducing emissions from deforestation, providing a fresh source of financing for the sustainable use of forest resources and biodiversity conservation," said the Fcpf on its website.

Campaigners said the launch was premature, as there were not yet safeguards in place to protect people who live in and depend on forests. "This sets a worrying precedent. Decisions on the eligibility of the fund have not been taken yet," said Kate Dooley of EU forest watchdog group Fern.

"BP should focus on cleaning up its own act, including the still highly polluted Gulf of Mexico, instead of engaging in forest carbon offset credits to avoid meeting climate goals. The carbon fund is almost entirely public money and cannot be used to bail out dirty industries like BP," said Kate Horner, policy analyst for Friends of the Earth US.