Voluntary carbon markets - be advised to carefully choose your credits!

PORT MORESBY, Jul 30, 2009 (AsiaPulse via COMTEX) -- The pristine forests of Papua New Guinea could be worth billions of dollars a year in carbon trading but potentially lucrative projects are on hold amid court orders and a government investigation.

One Australian company boasting 25 potential Reducing Emissions from Deforestation and Degradation (REDD) carbon trading projects in PNG appears to be caught up in the crossfire of confusion and red tape.

And PNG's special envoy to the United Nations on climate change Kevin Conrad has warned villagers and landowners to beware of the fool's gold being offered by so-called carbon cowboys acting as middlemen in the emerging carbon trading market.

Essentially REDD projects are a way for carbon polluters to offset their emissions by paying poorer developing countries like PNG to stop cutting down their forests.

The projects are voluntary at this stage but may move towards compliance markets similar to those that already exist in the EU after the UN Climate Change summit in Copenhagen at the end of the year.

But until then Conrad wants to rein-in the "carbon cowboys ... confusing forest communities with tall tales of gold trains just around the corner".

"Voluntary markets are largely fool's gold comprising only a minuscule portion, less than one per cent, of global compliance markets," he said from his New York office.

"The role of voluntary markets for REDD should largely disappear as the UN Framework Convention on Climate Change (UNFCCC) REDD mechanisms come into effect over the coming years."

Currently PNG has no formal policy or legislation to deal with carbon trading and the government has launched an investigation into the country's Office of Climate Change (OCC) and its now suspended director Dr Theo Yasause.

But several companies looking to do carbon deals in PNG say no policies or laws are required to lock in landowners for projects.

Australian company Carbon Planet, which last week announced a merger with Melbourne-based m2m Corporation Ltd in a deal expected to create a A$117 million (US$95.55 million) public company by the end of the year, says it has 25 potential REDD carbon trading projects in PNG that will generate A$1 billion a year.

Last year Carbon Planet put A$1.2 million towards projects in PNG associated with a company called Nupan PNG run by Australian Kirk Roberts, a former horse trainer who claims to represent landowners throughout PNG including in the disputed 787,678ha Kamula Doso forest in Western Province.

Some of the deals linking Carbon Planet and Nupan have been caught up in the investigation into PNG's OCC and Yasause after he gave Nupan a mandate to trade carbon one month before officially becoming director.

A court order has also restrained the OCC and Yasause from dealing with timber rights and carbon credits in relation to Kamula Doso pending the outcome of a judicial review.

"I do not recommend that the new OCC director entertain any voluntary projects at all," Conrad said.

Roberts and Carbon Planet have denied any wrongdoing, and on his website carbonowontok.org Roberts claims no court order exists over Kamula Doso. Carbon Planet's chairman Jim Johnson is of a similar belief.

"The documents are simply for a court order for a hearing, they are not an injunction against protection of the forests," Johnson said in a written statement.

Three independent law practices and leading environmental NGOs in PNG verified the court order and agreed it prevents any deals in the disputed forest.

Johnson declined to comment on the hurdles they face with setting up 25 projects in PNG.

The Kamula Doso forest has been locked in legal battles between logging interests, landowners, PNG government agencies and NGOs since the late 1990s.

The orders were sought by the PNG Eco-Forestry Forum, which disputes the allocation of logging rights over Kamula Doso to Malaysian logging giant Rimbunan Hijau in a judicial review case that started in 2006.

Despite this, Nupan's website displays a letter signed by Roberts and dated July thanking Kamula Doso landowner company Tumu Timber for signing up.

It states: "We confirm that the independent verification process to enable your project to be formally recognised under the UNFCCC guidelines for REDD Carbon Credits is now well underway."

While talks are ongoing at the UN level, there is no agreement nor does the UN support any offsets based on avoided deforestation.

Roberts did not respond to questions regarding this anomaly.

In May Kamula Doso landowners took out a full page advert in a PNG weekend newspaper "not supporting" carbon trading.

Tumu Timbers chairman Abilie Wape said his board betrayed him and pressured him to sign a deal with Nupan.

"The people do not want carbon trading, we don't know anything about it and we don't want to deal with Kirk Roberts," Wape said.

"I told them they are wasting their time but they kept pressuring me."

But Kamula Doso landowner Wisa Susupie says Wape has been sacked as chairman, while Wape says Susupie has been sacked as a director.

Western Province governor Bob Danaya said landowners told him Roberts and Nupan employees were not welcome in the region.

He said it was improper for landowners to be pressured into signing the agreement.

"Whatever they've signed will be challenged in court," he said.

Dave Melick from WWF's PNG office said the mess of landowner disputes, confusion and divisions is spreading throughout PNG.

"We are hearing of the same problem in other regions like the April Salumei, in the East Sepik Province," he said.

"But other fundamental questions remain: Is carbon a commodity that is exported? Who owns the carbon, is it a resource or product?

"How will companies buying into PNG carbon schemes verify or monitor remote communities and their forests?

"Can you set up carbon deals without going transparently through the designated national authority?

"How can you operate carbon deals when the office director is suspended?

"In PNG where ... more than 85 per cent of the people live in rural subsistent farming, issues arise as to whether people will stop farming so they can carbon trade.

"All these questions and more remain unanswered.

"Everyone, except probably loggers, want carbon trading to work for the environment and to provide a revenue stream for landowners but at the same time we are worried there is abuse by foreign speculation.

"This can easily lead to perverse outcomes where frustrated landowners turn against the carbon option after having being spun so many half-truths - Kamula Doso is a good example."

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Issue date: July 30, 2009

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