The case for “living” carbon credits

Forests and their contribution to mitigating climate change are an important issue in the context of sustainable development at Rio+20, whose themes include how to build an institutional framework for sustainable development.

Campaigns such as the Prince of Wales’ Rainforests Project (which I was privileged to be part of), worked with public/private/global NGO partnerships to raise awareness of the role that forests play in stabilising the climate as part of the water cycle, their importance for maintaining biodiversity and their role as a carbon sink. With Rio+20 under way, the challenge for governments and institutions is to establish a globally robust commercial framework that generates additional revenue for emerging economies from forests that are left standing as part of a broader suite of sustainable forestry practices.

The acronyms of sustainability can be a barrier to grasping the issues at stake. The important one in this context is REDD+ which stands for reduced emissions from deforestation and degradation (the + was added to include sustainable management and the conservation of biodiversity).

A report called ‘Analysing REDD+: challenges and choices’ was published alongside a discussion on Tuesday at Rio+20 by the Centre for International Forestry Research. REDD+ offers a potential solution to the problem of valuing standing forests through a global market of tradeable credits from ‘living’ carbon. This idea is supported by the World Bank and the UN but it faces many challenges.

A key consideration is that the market for carbon credits is split into regulated and unregulated or voluntary markets. Forests are not viewed as reliable carbon credits and as such do not find favour in the regulated market (they might burn down, for example). Their best hope is in the voluntary market, where consumer industries such as retailing might choose to offset their carbon by supporting them. The complexity around the permanence of ‘living carbon’ means REDD+ carbon credits are taking longer than expected to develop. But as the hosts of the Rio+20 session point out, there is hope in the sense that some countries are initiating reforms that were unthinkable pre-REDD+, a point that Olam’s own experience in the Republic of Congo bears out.

It’s worth examining the criticisms that are most often levelled at REDD+ projects by NGOs close to the forests and the communities who inhabit them. They point out that if badly administered, REDD+ projects can impact local people who depend on the forest for food, fuel and other goods by preventing them from accessing these natural resources.

In emerging economies, establishing land ownership can be a challenge, especially where there is no method of granting formal title. And even where there is no dispute over rights, there is still a need to ensure that local communities, the traditional stewards of the land, benefit from REDD+ financially. This element of due diligence in granting land rights is described by another acronym, FPIC which stands for free, prior and informed consent, which should be obtained from indigenous forest dwellers.

Olam’s own experience of these issues is underpinned by our work with the government of the Republic of Congo (Brazzaville), working with our subsidiary Congolaise Industrielle des Bois (CIB). In May, after a robust consultation process that adheres to the FPIC principles, we announced a new public private partnership REDD+ scheme in our Pikounda Nord concession. This pioneering pilot is the first commercial deployment of REDD+ in the Congo Basin, comprising 92,530 hectares. We are currently working towards project implementation of a process that will generate revenues from this sustainably managed forest in a revenue share arrangement with the government and the local community from the voluntary carbon market.

Henri Djombo, forest minister of the Republic of Congo summed it up when he said that “initiatives like these will help unlock the full range of values of natural tropical forests in the region by providing alternative sources of revenue to the local government and communities, supporting the conservation of wildlife and encouraging responsible management of standing forests.”

Our experience suggests that while it is not easy, governments and businesses have the opportunity to work together in PPPs to create the right conditions for REDD+ to succeed by ensuring that local communities do benefit from the revenues produced. These people offer the best means of monitoring and policing forests that have been set aside to protect them from illegal logging and to ensure they fulfil their potential as biodiverse carbon sinks with the ability to positively impact climate change.

Briony Mathieson is head of corporate and sustainability communications at Olam International, an SGX listed global agricultural supply chain and food ingredients company.