To Keep the Oil Flowing

7/31/2019 To Keep the Oil Flowing

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To keep theoil lowing

A Conversation onCarbon Credits

Oil rig, Ecuadorean Amazon. A woman appeals or helpa ter Hurricane Katrina, New

Orleans, September .

Extractfrom forthcoming issue of

Development Dialogue,published by

Dag HammarskjöldFoundation.



This document is a dra t extract rom a orthcoming special issue o Development Dialogue to be published byDag Hammarskjold Foundation, Uppsala, Sweden, edited by Larry Lohmann ([email protected])with the assistance o colleagues in the Durban Group or Climate Justice and elsewhere.

Thanks are due to all o the authors – Hannah Wittman, Patricia Granda, Timothy Byakola, Harald Eraker, Jorn Stave, Javier Baltodano, Emily Caruso, Vijaya Bhaskara Reddy, Yakshi Shramik, Adivasi Sangathan, CynthiaCaron, Trusha Reddy, Marcelo Calazans, Winnie Overbeek, Tamra Gilbertson, Jutta Kill, Heidi Bachram,Ben Pearson and Adam Ma’anit – as well as the Centre or Science and Environment, K. Sivaramakrisnan,Sajida Khan, Michael K. Dorsey, Ricardo Carrere, Cathy Fogel, Esperanza Martinez, Raj Patel, Patrick Bond,

Nualnoi Thammasathien, Ponglert Pongwanan, Ida Aroonwong, Olle Nordberg, Niclas Hallstrom, Ceciliavon Otter, Robert Osterbergh, Lotta El strom, Mattias Lasson, Kerstin Kvist and innumerable local activistsin the places described.

Montreal, December 2005.

The Corner HouseStation RoadSturminster NewtonDorset DT10 1YJUK+44 (0)1258 473795http://[email protected]

Dag Hammarskjold FoundationOvre Slottsgatan 2SE – 753 10 UppsalaSWEDEN+46 (0)18 12 72 72http://www.dh .uu.seniclas.hallstrom@dh .uu.se





T he climate crisis is, above all else, a problem o oil, coal and gas. It’s a problem that has comeabout mainly through ossil carbon being taken outo the ground, run through combustion chambers,and trans erred to a more active and rapidly-circu-lating carbon pool in the air, oceans, vegetation andsoil.

Fossil carbon is plenti ul. It’s the fnal resting place o carbon removed by plants rom the atmosphere over millions o years. But the carbon-absorbing capacityo oceans, vegetation and soil at any one time islimited. a Something has to give. Inevitably, someo the huge amounts o carbon being trans erred

rom underground to aboveground builds up in theatmosphere, destabilizing the climate.

This over ow cannot go on indefnitely. As biologistTim Flannery notes, “there is so much carbon buriedin the world’s coal seams alone that, should it fnd itsway back to the sur ace, it would make the planethostile to li e as we know it”. b I even a substantial

raction o remaining ossil uels is burned, the resultcould well be catastrophic. c

In the end, then, climate politics boils down to fnd-ing ways o keeping most remaining coal, oil and gasin the ground.

Given industrial societies’ dependence on ossil uels,this isn’t easy to do.

But it may help to remember one thing that’s o tenorgotten in all the panic over the new problem o

global warming. This isn’t the frst ossil uel crisis.Coal, oil and gas have been associated with environ-mental degradation, damaged lives, social con ictand war or a long time.

For decades, exploration or new oil and gas feldshas gone hand in hand with encroachment on peo-ple’s land and with preparations to dispossess them.

Road built through orest in Ecuador to extract oil.

Oil spill in the Ecuadorean orest.

Extraction, meanwhile, has provoked resistance allover the world. From Ecuador to Sakhalin, romNigeria to Burma, ossil uel corporations, usuallybacked by governments, have stolen or contaminatedlocal land, orests and water, and communities a ect-ed have responded accordingly.

Gas faring in Delta State, Nigeria and protests, right.

Refning and transport have brought their own lega-cy o impairment, disease, dispossession and contami-nation.

1 Introduction



Women rom coastal communities in Songkhla, south-ern Thailand, protest a gas pipeline and separation

plant project which threatens local sheries, commonland and livelihoods. Below, the polluting ENGEN oil

re nery in Durban South A rica, another ocus o com-munity resistance.

And pollution rom industrial and power plants burn-ing ossil uels has le t a mark o su ering, disease, andcon ict on a ected communities or over 150 years.

Finally, militarization and the craving o industrial-ized societies or oil has endangered security, poi-soned lives and blighted politics around the world.Today, wars costing uncounted lives and billions o dollars can be ought over only a ew months’ or

years’ worth o oil.

US soldiers in Iraq.

The struggle to stabilize climate – to stop the world’sabove-ground carbon dump rom over owing – takes

its place as merely one more aspect o this long history.Nevertheless, there’s a sense in which this latest bat-tle throws a new light on the older ones. It suggests,more strongly than has been suggested be ore, that allthese struggles against the damage wrought by ossil

uels must ultimately point in one direction: towardthe need to fnd ways o leaving coal, oil and gas inthe ground.

The Empire Strikes Back

Predictably, however, many power ul groups areworking to obscure this emerging vision.

Shell, BP, and ExxonMobil continue to act as i it isa oregone conclusion that all remaining oil and gaswill have to be taken out o the ground. Other energyfrms appear to think the same about coal. Many gov-ernments, United Nations bodies, business consultan-cies and intellectuals claim that perhaps we don’t needto phase out ossil uels, or that we can wait a whilebe ore thinking seriously about doing so.

Instead o halting the ow o ossil carbon to the sur-ace, they say, perhaps we can carve out more space

to put our emissions in, so that they don’t build upin the atmosphere.

Perhaps we can park carbon dioxide in holes in theground, or lique y it and inject it into the bottom o the ocean.

Perhaps we can put carbon in trees that we grow or the purpose, and keep it out o the atmosphere inthat way.

Or perhaps we can “compensate” or extracting re-maining ossil uels by making extra e orts to “save”them or use them more e ciently. Or by cuttingdown on the use o other greenhouse gases likeHFCs or NO 2. Or by building more windmills thanwe were planning to. Or by burning o the methane

that coal mining releases rather than just venting itinto the atmosphere.

And i all o these things are just as good as haltingthe extraction o ossil uels, perhaps we ought tobe able to construct a market to exchange the one

or the other. A market o a new kind. A market inwhich you pay or continuing to drill oil by screw-ing in e cient light bulbs, or in which you pay or continuing to dig up coal by burning the methanethat seeps up out o the same mine – a market thatstrikes a counterblow against the view that stoppingthe ow o ossil uels is the only realistic approachto global warming.

The “carbon-saving” projects that generate the cred-its bought and sold in this market thus become a new

rontier in the de ence o ossil uel use.



But they are also a new battlefeld. In addition tohelping perpetuate the old problems o coal, oil andgas, these “carbon-saving” projects bring new prob-lems as well.

In order to generate carbon credits rom trees, plan-tation companies have to maintain their hold on landordinary people need or other purposes. In order togenerate carbon credits rom burning the methanebubbling out o landfll sites, authorities have to keepthe sites open. In order to keep track o the carbontheir agro orestry schemes generate, rural develop-ment organizations have to divert resources romtheir traditional work. In order to get carbon credits

or halting aring, oil companies have to keep their polluting extraction sites open.

And all the while, new strip mines continue to beopened, oil to be spilled, and chemical pollutantsto wa t over power-generating plants. Every CleanDevelopment Mechanism or Joint Implementationproject set up under the Kyoto Protocol, or “car-bon o set” scheme launched by a private frm, helpsperpetuate the atal ow o ossil carbon out o theground and into the air just as surely as any drill bitor transcontinental pipeline.

The ossil uel economy’s new rontier, in short, hasbecome a new battlefeld. Added to classic local con-

icts over extraction, pollution, and labour abuse are

now, increasingly, local con icts over “carbon o sets” – the projects that justi y the extraction, the pollu-tion and the abuse.

At frst glance, these con icts may seem to be onlyindirectly connected to ossil uels. People fghtingindustrial tree plantations in Brazil, or example, maynever catch a whi o the hydrocarbons whose re-lease in Scotland the plantations sanction. But thestruggle o the exploited community in Brazil andthe polluted community in Scotland are, in a sense,one. The Kyoto Protocol and other carbon marketsspringing up around the world, in globalizing the de-

ense o ossil uels in a new way, have also globalizedcon icts over ossil uels in a new way.

About this Booklet

It is this new set o struggles that this booklet at-tempts to introduce, in the only way it can be intro-duced: through looking at what actually happens onthe ground.

In the past, the deeper meanings o dependence oncoal, oil and gas could be understood by coming togrips with the experience o things like oil wars, pol-luted armland, lung disease, militarization, disappear-ing orests, and ever more threatening tropical storms.

But this is no longer enough. Today, anyone whowants to understand what coal, oil and gas depend-ence means also has to look closely at the “carbono set” and “carbon saving” projects now being setup around the globe, under the auspices o the KyotoProtocol’s “ exible mechanisms”, the World Bankand innumerable consultancies and other privatefrms; to ask questions about them, and to listen tothe voices o those who are a ected.

Looking at tensions and con icts in Brazil, India,Uganda, Costa Rica, Sri Lanka, Tanzania, Ecuador,Guatemala, Thailand and South A rica, this dra tdocument – one part o a orthcoming special issueo Development Dialogue produced by the Dag Ham-marskjold Foundation on carbon trading – bringstogether a ew o these questions and voices.

The topic is di cult. The market in credits gener-ated by the “carbon saving projects” involves some o the most arcane and convoluted technical, legal andintellectual exercises ever devised in the service o perpetuating inequality and environmental olly.

But by putting the issues in question-and-answer orm, and enlivening them with the voices o many

actors and many authors, we hope to have taken onestep in bringing the question o the new carbonmarket closer to open public debate. The authors andother contributors would welcome comments and

criticisms as a sign that this e ort has succeeded.

(Endnotes)a Falkowski, P. et al., “The Global Carbon Cycle: A test

o Our Knowledge o Earth as System”, Science 290,13 October 2000

b Tim Flannery, “Monstrous Carbuncle”, London Re-view o Books 27 1, 6 January 2005.

c Leggett, J. (1999) The Carbon War: Dispatches rom the End o the Oil Century (London: Allen Lane).



2 The Beginnings: A Story rom Guatemala

The beginnings o the “carbon o set” idea can

be traced back at least as ar as 1977, when thephysicist Freeman Dyson speculated that large-scaleplanting o trees or swamp plants could be a cheapmeans o soaking up excess carbon dioxide in theatmosphere. a That, Dyson fgured, would buy timeduring which ways o phasing out hydrocarbon usecould be ound.

But it wasn’t until 1989 that the frst orestry projectunded explicitly to o set greenhouse gas emissions

was set up. b

Applied Energy Service, Inc. (AES), a United States-based independent power producer, had been look-ing or a cost-e ective technique or reducing carbondioxide emissions at a new 183-megawatt coal-fredpower plant in Connecticut in order to make theplant more acceptable to state regulators.

On the recommendation o the Washington-basedWorld Resources Institute (WRI), AES decided totry to “mitigate” the plant’s carbon emissions by o -

ering US$2 million to fnance ten years’ worth o “land-use activities and multiple-use orestry proj-ects” in Guatemala.

The activities would be undertaken by the organiza-tion CARE with the help o USAID and the Gua-temalan Directorate General o Forests. c CARE hadbeen working in agro orestry since 1974 in the West-ern Highlands -- one o the country’s ew remaininghighland areas with existing orest and the potentialto o set signifcant quantities o carbon – and it washoped that the AES money could leverage additional

unds rom other sources (debt- or-nature swaps) aswell as volunteer services rom groups such as the USPeace Corps.

Some 40,000 smallholder armers would plant 50million pine and eucalyptus trees in the course o es-tablishing 12,000 ha o community woodlots, 60,000ha o agro orestry and 2,880 km o live ences. Some2,000 ha o vulnerable slopes in local watershedswould be protected and training provided or or

orest fre brigades to reduce the threat o fre andpotential CO 2 release. All these activities would ei-ther increase sequestration potential or decrease car-bon emissions in the project area. During its frst ten

years, the project would also train local communitiesso that its activities would become sel -sustaining. Inall, AES fnance would make possible the sequestra-tion o 15.5 to 16.3 million tonnes o carbon in Gua-temala – more than enough to cover

the 14.1 million tonnes the Connecticut plant would

emit over its 40-year li etime.d

e

Did it work?

No. In 1999, an external evaluation o the AES-CARE project showed that, even by its own carbon-accounting standards, it was alling ar short o theone million tonnes o carbon it was supposed to have“o set” to date.

What happened?

The project was built around the assumption that us-ing the area or carbon production would be com-patible with improving local quality o li e throughincreasing agricultural productivity, watershed pro-tection, and improved uelwood access. But thedesigners didn’t su ciently grasp what the projectwould mean or armers given their local politicalcontext.

First, many o the mainly indigenous subsistencearmers in the project area in the Western Highlands

had been pushed by extreme land concentration bythe agri-business sector in the ertile lowlands to theedge o the agricultural rontier. The Western High-lands encompass the country’s poorest communi-ties and most environmentally degraded areas. Morethan 90 per cent o rural households live in absolutepoverty, g and with population densities exceeding 100people/km 2 and a de orestation rate o 90,000 hect-ares/year, erosion and land degradation have led to anintensifcation o rural land use even as poverty ratesincrease. The average amily in the Western Highlandshas arming access to less than one hectare o land.

The Western Highlands o Guatemala ( ve provinces at le t).



Yet the same time, land with o cial orest status waso ten declared o -limits to continued agriculturaluse under Guatemala’s 1996 orest law. The govern-ment was trying to re-locate control over communal

orests into the hands o municipal authorities, andthe law criminalized subsistence activities such as u-elwood gathering.

Well, wasn’t that a good thing? It helped protect the carbon stored in the trees.

What it did frst and oremost was to take access tothe trees out o the hands o ordinary people. Oneresult was that con ict grew between municipal andvillage authorities and individual landowners. Anoth-er was that re orestation looked less attractive. Whowants to plant trees i by doing so you deprive your-sel o daily necessities? A third result was increasingdistrust o government orest o ces, some o whichwere partly unded by the CARE/AES Agro orestryProject. Not a good outcome, whether your objec-tive was people’s wel are or long-term carbon sav-ings.

Then, too, in the early years o the project, the treespecies promoted were o ten inappropriate or theclimate and or degraded land areas. Damage by ani-mals and sabotage o replanted areas also limited theexpansion o re orested areas.

But what about agro orestry systems, which allowarmers to make use o the carbon-sequestering ar-eas?

Agro orestry systems are indeed more attractive tolocal armers, as they serve multiple purposes (graz-ing, odder and uelwood provision, and subsistenceor cash-crop components). But they typically takethree to fve years to become productive. That alsomakes them a di cult option or amilies with lim-ited land.

So it was hard to reconcile local people’s needs with the goal o carbon production.

In more ways than one. Another problem wasCARE’s need to channel more and more o its lim-ited personnel and fnance toward monitoring andmeasuring carbon instead o trying to improve peo-ple’s lives.

In the past, CARE had had a respectable record o promoting sustainable agriculture and agro orestry,and even some success in protecting water sourcesthrough re orestation, although less so in the West-

ern Highlands. The organization had a great deal o experience in training local community extensionagents, providing seeds and tree nursery supplies,and training local people in soil conservation, odder

production, and watershed management. That wasthe sort o thing it did. CARE extension agents alsoprovided advice and mater ials or improving grazingareas and soil recuperation, services that local projectparticipants continue to evaluate positively.

The new carbon ocus or its work, however, meantthat fnance and sta time began gravitating away

rom agro orestry toward re orestation, and awayrom arm extension work toward un amiliar work

in modeling and monitoring carbon emissions ben-efts.

Couldn’t the sta do both things at once?

It’s not so easy. Carbon accounting is specialized,complicated work. The market needs hard carbonnumbers. You can’t just look at a couple o trees andsay that they will have soaked up the carbon equiva-lent o one 1000-km airline ight by 2020. You haveto look at growth rates, soil changes, interactionswith local communities, counter actual scenarios. In

act, i you look care ully enough, you fnd you can’tdo the calculations at all. h

The complexity (or impossibility) o this new jobplayed real havoc with CARE’s original mission.CARE was used to training and agricultural exten-sion, not carbon monitoring. In 1999, the organiza-tion still didn’t have a methodology in place or mea-

suring and monitoring carbon in agro orestry plotsand orests.

An external evaluation conducted in 1999 by Win-rock International laid down the law: the project’scertifed carbon production had to be improved tomake it “more acceptable as a CDM-type o proj-ect”. i A land-use mapping system using a GeographicIn ormation System had to be developed together with remote sensing technologies that could trackproject changes. “Proxy areas” had to be identifedto serve as a “without-project” baseline, and a car-bon monitoring program or all project activities or which carbon credits would be claimed had to beset up.



The research on Guatemala on which this sectiondraws was carried out by Dr. Hannah K. Wittman o Simon Fraser University. It was conducted in the con-

text o a participatory evaluation (that included com-munity mapping and a household-level questionnaire)o CARE’s agro orestry extension program operat-ing in two villages in the municipalities o San José Ojetenam and Ixchiguán in the state o San Marcosin the Guatemalan Highlands.

In short, the Winrock evaluators, the needs o thecarbon market in the ront o their minds, reversedCARE’s own emphasis on livelihood over carbon se-questration. By 2000, CARE o cials were openlydiscussing the possible need to redirect resources or-merly channeled to extension activities to pay out-side consultants to develop carbon accounting meth-odologies. From being a development organization

ocusing on extension, livelihood provisioning andpoverty alleviation, CARE was increasingly beingpushed into the role o carbon technician.

And given the infnite complexity o the task o get-ting the right carbon numbers, there was no end insight to the potential questions. For example, was theburning o uelwood rom agro orestry systems or re orestation projects properly accounted or in theproject’s carbon budget?

But surely most o CARE’s agricultural extension workwent on as be ore?

There were changes there as well. Another side e ecto the new carbon money, and CARE’s need to showgood carbon numbers, was that CARE’s work beganto be more directed toward larger armers than inthe past. It was large armers who were riendlier tore orestation and who were more likely to approachCARE extension workers or help with their ownre orestation e orts, becoming an essential partner in

helping CARE to achieve and to comply with itscommitment to sequester carbon.The new carbon ocus o CARE’s work also made itsobjectives and premises harder to share with armers.

Farmers were, even as o 2000-01, not being told whatthe project was about, nor how their re orestationand fre brigade e orts contributed to carbon miti-gation, nor what the impacts on them o a changingclimate might be. Nor were they even directly paid

or their re orestation activities. That, o course, madeit impossible to discuss with them their responsibilityor role in, or rewards or, o setting Northern carbonemissions, or to ask them how their own knowledgemight improve carbon sequestration design or dis-semination. “Participatory” carbon sequestration itwasn’t.

(Endnotes)a Freeman J. Dyson, “Can We Control Carbon

Dioxide in the Atmosphere?”, Energy 2, 1977, pp.

287-291.b P. Faeth, C. Cort, et al., Evaluating the Carbon Se-

questration Bene ts o Forestry Projects in Developing Countries, World Resources Institute/EPA, Wash-ington, 1994; S. Brown and M. Delaney, CarbonSequestration Final Evaluation: Final Report toCARE Guatemala or PNO3 Agro orestry Project ,Winrock International, Arlington, VA, 1999.

c See www.careusa.org/careswork/project.asp.d World Rain orest Movement Bulletin No. 37,

August 2000, available at www.wrm.org.uy/bul-letin/37/Camerica.html. Guatemala Agro orestry

estimates 100 tonnes o carbon sequestered per hectare or orests and 30 tonnes or regrowth.e See www.careusa.org/careswork/project.asp

Brown and Delaney, op. cit.g World Bank, Guatemala – Integrated Manage-

ment o Natural Resources in the Western Altiplano(MIRNA). Project Appraisal Document , World Bank,Washington, 2001.

h Larry Lohmann, Democracy or Carbocracy? Intel-lectual Corruption and the Future o the Climate Debate, Corner House Briefng No. 24, pp. 36-44,available at http://www.thecornerhouse.org.uk.

i Brown and Delaney, op. cit.



3. From The Netherlands to the Andes: A Tale rom Ecuador

T he Dutch FACE Foundation or “Forest Ab-sorbing Carbon Dioxide Emissions”, was es-

tablished in 1990 by the Board o Management o the Dutch Electricity Generating Companies, N.V.Sep. The original idea was to set up 150,000 hectareso tree plantations to compensate or the emissions

rom a new 600 MW coal fred electricity generationplant to be set up in the Netherlands. “For reasonso land availability and cost-e ectiveness,” FACE ex-plained, “greater emphasis has been placed on col-laboration with developing countries and countriesin transition.” a

Since 2000, the FACE Foundation has been pro-ducing and selling carbon credits rom tree planta-tions independently, without Sep unding. It tradesthe credits through two Dutch companies: Business

or Climate (set up by FACE in 2002 jointly withTriodos Bank and Kegado BV) and Triodos ClimateClearing House.

The FACE Foundation has fve projects worldwide:in Malaysia, the Netherlands, the Czech Repub-lic, Ecuador and Uganda. The FACE Programme

or Forestation in Ecuador S.A., or PROFAFOR,currently the largest, is a company incorporated inEcuador in 1993, with FACE fnance, to establishtree plantations to “fx” CO2 rom the atmosphere.PROFAFOR has not been approved as a UN CleanDevelopment Mechanism project. But it does see it-sel as “potentially CDM-compliant” – as sequester-ing carbon over and above what would have beenthe case otherwise, as providing social, economic andenvironmental benefts, and so on.

PROFAFOR originally thought to plant 75,000ha o trees, but later revised this goal downward to25,000 ha. So ar contracts have been signed or theplantation o 24,000 ha, and 22,000 ha have actuallybeen planted. Initially, PROFAFOR activities were

ocused on the Andean region, or Sierra, and 8,000hectares have been planted under contract with 39indigenous mountain communities. However, since2000, contracts have also been signed in Ecuador’scoastal region. b

Well, planting trees is bound to be a good thing or everybody involved, isn’t it?

It’s not so simple. The Sierra sites used by PROFA-FOR are located in a biome known by the colonialSpanish term paramo – which denotes high altitude

plains or barren plateaus without woodlands. Thiszone was never orested and supports ew trees. Thedominant vegetation is Andean grasses rom the ge-nuses Festuca, Stipa, Calamagrostis and Deyeuxia.

The dark, volcanic paramo soils have a complex par-ticulate structure that, in the cold, moist climate o the Sierra, enables them to retain a great deal o wa-ter and organic matter. The soils have a ar greater capacity to hold water than the vegetation coveringthem, although a layer o plants is important to keepmoisture in the soils during dry seasons. In the hu-

mid but not high-rain all Sierra environment, paramo soils are believed to be the main water reservoirs or the local inhabitants.

Although indigenous agriculture has been practicedor hundreds o years up to 3,500 metres (the Sacred

Valley o Cuzco, a shrine o indigenous agriculture,lies at around 3,000 metres), the ecological balanceo the paramo above 3,200 metres is very ragile. I the plant cover is removed even temporarily, evapo-ration rom the sur ace increases and organic matter in the soil begins to decompose, resulting in reduced

capacity to hold water. Once dry, the soils cannotrecover their original structure and organic content,even when they get wet again.

The monoculture tree plantations PROFAFOR setsup to fx carbon are a bizarre and damaging innova-tion in this environment. The species used are ex-otics used in industrial plantation exotics. Some 90per cent are pine, either Pinus radiata (particularly inthe provinces o Carchi and Chimborazo) or, to alesser extent, Pinus patula (mainly planted in Cañar and Loja). Eucalyptus and cypress species make upanother our per cent.

But what’s wrong with pine trees? PROFAFOR saysthat experiments with pine in di erent places get di -

erent results and that “it cannot be categorically stated that pine is noxious or paramo soils.”

PROFAFOR’s non-indigenous pines dry out andcrack the soils, not only because they disturb the exist-ing vegetative cover, but also because their nature is touse a great deal o water. Organic matter and biologi-cal activity decline, uncompensated or by the all o pine needles. Soils tend to be trans ormed rom water retainers to water repellents, and surrounding ora and

auna are deprived o ood habitat.c The threat is not only to local hydrology, but also,



ironically, to local carbon storage capacity. Subject toless extreme variations in temperature and humiditythan the drier Southern Andean zone known by theindigenous term puna, the paramo stores in its thicklayers o soil vast amounts o carbon – perhaps 1,700tonnes per hectare in the case o Carchi province,more than a tropical orest – but only as long as thesoils are not exposed to the air and to increased ero-sion through planting operations and frebreaks.

In addition, the carbon in the trees is at risk romfre. In the community o SigSig in Azuay province,fres have already killed or stunted the growth o many pines. And fres are likely to recur continuously,given a fre-prone natural ora, traditional burningpractices used to encourage odder regrowth, strongwinds, frebreaks that are too ew and too narrow,and the lack o permanent wardens or fre-fghtingequipment. The yellowish needles appearing on nu-merous local stands o Pinus patula signal the species’poor adaptation to the Andean environment, possiblyindicating lack o a crucial micronutrient or o themycorrhizal ungi that acilitate the tree’s nutrientabsorption in its native environment. Animals havemeanwhile broken o many terminal shoots, giv-ing rise to a bushy growth which may prevent thetrees rom developing trunks suitable or the sawmill.Growth is also noticeably slow.

Wait a minute. Are you telling me that a project which was designed to absorb carbon may actuallybe emitting it?

That was exactly the conclusion reached by scholar Veronica Vidal in a recent doctoral dissertation onenvironmental management at the Autonomous Uni-versity o Barcelona. Vidal ound not only that thesoils under PROFAFOR plantations are releasingmore carbon than the frm takes account o , but alsothat the pine plantations are capable o absorbing lesscarbon than it claims. She concluded that the net car-bon balance in PROFAFOR plantations may well be

negative: “We are acing a lose-lose situation, in whichthose who most lose are the uture generations thatwill have to ace the problems o climate change.” d

But according to PROFAFOR, local soils have been“degraded by extensive use”, and planting pine and eucalyptus in the paramo will restore them and pre-vent erosion.

Although some o the sites used by PROFAFOR,situated between roughly 3,200 and 4,800 metres,have been used or grazing, they have not usually

been cultivated, due to their remoteness and harshclimate. The idea that the soils on these sites, whichstill ulfl their or iginal unctions, are being degradedin any way that pine plantations could remedy is sim-

ply alse. As or erosion, it is the pine plantations andtheir frebreaks themselves that are likely to createthe greater problem.

Under the PROFAFOR project, villagers are obliged toconstruct rebreaks in which the pajonal grasses protecting

the soil o the paramo are uprooted in a strip bordering the plantation, leaving the soil exposed.

Wait, I’m getting con used here. PROFAFOR saysthat this environment is in bad shape. And, a ter all,doesn’t their claim stand to reason, with the zone’shistory o overexploitation? I know that ollowing the Spanish conquest, many indigenous peoples had toretreat to high altitudes because Hispanic and mestizocommunities were spreading out in the inter-Andeanvalleys and the Spaniards were taking over land or large estates or private ranches. And I understand that

the land re orm laws o 1964 and 1973 helped intensi ythe exploitation o the paramo even urther by trans er-ring higher, less productive areas o hacienda lands toindigenous peoples. Today, I hear, agriculture is being

practiced up to 3,900 metres and cattle-raising up to4,500 metrese . On its plantation sites, PROFAFOR says, the land is so degraded that arming is just “not

pro table and the land is not suitable or subsistence activities”. In this context, surely pine trees will be bothan ecological and an economic improvement, no? And a way, as PROFAFOR puts it, o “taking advantage o land that is not being used and that could generate income to the local economy”?

Well, con usion is only to be expected in a situationlike this, in which PROFAFOR is saying one thing



(largely to an international audience) and local peo-ple are saying another thing (largely to themselves).But it’s use ul to remember that there’s a long glob-al history to the kind o claim that PROFAFORis making, that a certain set o common lands are“waste”, “degraded” or “unused”, and are idly wait-ing to be brought into the commodity market be orethey can become “productive”.

It’s a claim that was used in the Americas during thecolonial era to seize indigenous people’s croplandand hunting and gathering grounds and trans ormthem into the private property o Europeans. It wasused again in India, with more mixed success, duringthe colonial era there, and in A rica as well. And itwas used in Europe during the great eras o enclosure200 and more years ago. In each o these cases theclaim concealed and justifed takeovers o land thatwas not only usable and ecologically rich, but used

or all sorts o livelihood purposes. And the same istrue o the paramo.

That doesn’t ft very well with PROFAFOR’s claimthat it would have liked to use native species but that“the majority o native species have almost disap-peared, and local knowledge o indigenous tree spe-cies has been lost with the trees.” g

Well, now that you mention it, although the paramo is a zone that has never been orested, people therein act retain a remarkable knowledge o native trees.In one PROFAFOR area, San Sebastián de SigSigin Azuay province, villagers are easily able to nameand describe uses or a dozen native species. h Yet theonly Andean tree species used by the PROFAFORproject, and on a very small percentage o its sites, isPolylepis incana. This is a sub- paramo species and it toois being planted in monoculture.

Well, that’s interesting, but so what? The English-lan-guage PROFAFOR brochure says that local people“have a say in species selection and they pre er plant-ing non-indigenous pine and eucalyptus species.” i And I also notice that when it arrived, PROFAFORgained the immediate support o what is now the

Ministry o the Environment, too. The Ecuadoreangovernment saw PROFAFOR as contributing to itsown plans or a oresting or re oresting 250,000 hect-ares in the Andean zone over 15 years.

Well, I don’t want to try to explain the government’sposition, but to see what local people think o thepine plantations now, we need to look at the storyo how the project was introduced and what hap-pened next.

Yes, let’s get on to that. Because whatever ecological problems you think these plantations create, surely theymust be bringing social bene ts to these marginalized mountain communities!

That’s certainly they way they were presented. PRO-FAFOR said the communities would get both in-come and employment rom the project. In addi-tion to payments per planted hectare, they wouldget seedlings, technical assistance and training. Theywould have work or many years. They would haveaccess to the plantations to collect mushrooms, resins,frewood and wood rom thinning. And a ter 20-30

years they would be allowed to harvest the trees andsell the timber. All PROFAFOR asked in return was100 per cent o the rights to the carbon fxed in thetrees. It sounded terrifc.

I have a eeling you’re going to tell me that things didn’t turn out as promised.

That’s an understatement. Let’s start by looking atwhat happened in three communities that that signedcontracts with the company between 1997 and 2000.Communities were o ered payments o betweenUS$165 and $189 per hectare planted. But the cost o plants and technical assistance during the frst threefrst years o plantation was then deducted, leavingthe communities about hal o what they were ini-tially o ered (see Table 1).

Community

Arealeased

Paymentagreed per

hectare

Totalamounto ered

Deductionsor plants

and technicalassistance

Amountdisbursed to

the community

Percentagededucted

San Sebastián deSigSig

ha US , , , %

Pisambilla ha , , , %

MojanditaAvelino Dávila

ha , , , %

Source: PROFAFOR Forestation contracts

Table 1



When SigSig community asked how much technicianswere being paid or this technical assistance, they weretold that PROFAFOR did not have the “capacity toask or these reports . . . it is an administrative matter.”Meanwhile, the price o the planting stock doubled or tripled. And in the end it was the commune, and notPROFAFOR, as specifed in the contract, that had totransport the stock rom the nursery.

Well, but little misunderstandings like this will crop upin every business transaction. You just have to get onwith it. What does this have to do with the big picture o addressing climate change?

It doesn’t end there. A ter having deducted the cost o the seedlings and technical assistance, PROFAFORwas obligated to pay 80 per cent o the remainder in three instalments during the frst year a ter thecontract was signed – as long as it wasn’t necessary toreplant more than 25 per cent o the seedlings. Theremaining 20 per cent was then to be handed over to the community “ ollowing complete ulflment o the activities oreseen” by the company or the sec-ond and third year a ter the contract was signed.

There were several problems here that villagersweren’t ready or. First, when trees die because they“do not adapt”, the community has to take on thecost o new seedlings or re-plantation. This happensquite requently, because o the quality o the plants,the cold and windy conditions o the high-altitudeplantation areas, or or other reasons. According toMary Milne o the Centre or International ForestryResearch, the re-plantation rate or PROFAFOR is“between 15 and 30 per cent and costs range betweenUS$865 and $5820, which have to be absorbed bythe communities.” j

A bigger problem is that because o the necessity o guaranteeing a long li etime or the carbon seques-tered in PROFAFOR’s trees, each community has tomaintain the trees itsel or 20-30 years be ore beingallowed to harvest them and sell the timber. (Morerecent PROFAFOR contracts demand even longer terms, o up to 99 years.) But the money runs outlong be ore that. Nor are the communities given anyin ormation on where or how they might marketthe timber.

“ At an assembly this engineer came, he told us thatthousands o dollars would enter the commune

[ or tree-planting] … that a terwards we were goingto have sources o work till a ter the harvest, that wewere going to collect who knows how much money.

And the assembly signed . . . you know, sometimeswe country people, we don’t know, we all or it na-ively…”

SigSig community member

But it’s not only a money matter. Essentially what thePROFAFOR contract does is ensure that the com-munity turns over communal land and communal la-bour to the company or carbon production or ree.

How does that work?

Well, take land frst. Under the contract, PROFA-FOR gets – rent- ree – large tracts o communityland which then cannot be turned to any other pur-pose than the production o carbon credits or theinternational market or 20 or 30 years.

This is not armland. Cultivation goes on in other zones o communal property where the land has al-ready been divided up among amilies. But PROFA-FOR’s claim that the land is “degraded”, “not beingused” or “is not suitable or subsistence activities”,and that it is idly waiting to be trans ormed into anasset by being “incorporated into the national econ-omy”, is simply alse.

In addition to having important hydrological unc-tions, much o the land is used or grazing or couldbe rented out or that purpose. When the plantationsare set up, amilies owning cattle may have to rentother lands or their animals, purchase odder, or re-duce their herds. This has an impact on amily sav-ings, not only because the monetary compensationvillagers get rom PROFAFOR is too small and mustbe used immediately or plantation expenses, but alsobecause, by its nature, cash cannot play the role o themore stable, less liquid, traditional savings embodiedin amily cattle.k

Small wonder that local people eel that they haveessentially trans erred the land and its potential togenerate savings or exclusive PROFAFOR use. Asone said, “We cannot touch or do anything on thearea signed over.”

OK, but you also said PROFAFOR also appropriatescommunities’ labour or ree. How does that happen?PROFAFOR says that the locals get good wages or the work they do on its plantations.

PROFAFOR maintains that it provides thousands o jobs to indigenous communities in Ecuador. But alot o these jobs are extremely onerous and unremu-nerated tasks that the communities fnd themselvesunwillingly taking on because o debt.

In act, PROFAFOR has not only ailed to providethe jobs it has o ered, but has also orced communi-ties to hire people rom outside to carry out PROFA-FOR work. Local people, it turns out, o ten do notpossess the necessary technical skills PROFAFORmanagement plans require.8 PROFAFOR’s train-



ings – workshops or two leaders rom each commu-nity, held in hotels or other venues in nearby cities

– are widely seen as insu cient and too theoretical.xiv In addition, the plantations are o ten too mote or subject to too extreme climatic conditions or localpeople to work on themselves.

Where tasks remain incomplete, the community hasto all back on its own unpaid labour pool – a sys-tem called minga – to ulfl its contractual obligations.Essentially, villagers are orced to exploit their ownsystem o ree communal labour in order to escapedebt.

Minga: Organizing Labour without a Market Minga is a communal pool o nonmarketed labour typical o the indigenous communities o the Andes.Among the Quichuas, minga is directed at a specifccollective mater ial objective: planting and harvesting,or building or maintaining access routes, irrigationchannels, schools or health centres. It is a complexmechanism or social interaction in which, generally

or one day each week, both men and women, adultsand children, are mobilized.

People working under minga receive no money.

Rather, the system is one o reciprocity and mutualhelp. When minga is granted to achieve individualpurposes, the mingado, or benefciary, enters into anobligation to return minga to the mingueros, or work-ers, at some point in the uture.

As one villager rom Chuchuqui said:

“… they paid or dibbling or pine only not or euca-lyptus. And they did not pay me, I worked under min-

ga . . . Where we could not work, they hired people

rom Quito and Chimborazo and the communitypaid the workers.”

But surely the communities must have made some money out o the deal?

Well, it’s instructive to try to do the math. Look atwhat happened to SigSig. The community was toreceive about US$75,000 or 400 hectares o Pinus

patula plantation to be sited on land a three- toour-hour walk rom the settlement’s centre, at ap-

proximately 3,700 m. Plotting, dibbling, planting

and construction o the fre-break was carried outbetween June 1998 and December 1999. But somethe seedlings didn’t take, and the community had tohire outside labor to replant, using the unds supplied

by PROFAFOR. The community built a house inthe area o the plantation mid-1999 and a guard washired or the frst two years.

Then, in 2000 and again in 2004, fres swept throughlarge parts o the plantation. The community had totake on most o the costs o replanting – includinglabour, transportation and ood – with PROFAFORpicking up only the costs o seedlings. The commu-nity has also had to take responsibility or replantingsdue to maladapted trees dying. Yet the 20 per cento the unds that should have been disbursed to thecommunity three years a ter the contract was signedin 1998 have still not been received. And the planta-tion has to be maintained or nearly 15 more yearsuntil harvest. To top it o , i the community decidesnot to continue carrying out PROFAFOR’s planta-tion work at that time, it must hand over 30 per cento the income rom the sale o the timber to thecompany.

“We made an assessment and … it was like a buck-et o cold water. On doing our accounts, we real-

ized how much money we have put in, and the treesare still small. . . . Although we have no money le t, . . .we have to look or a warden to look a ter the plantsand pay him, we have to prune, we have to put downmanure, all the care and then the harvest. . . . we our-selves have to fnd a [timber] market. . . . How is that!We are depleting our land, we are providing labour,

harvesting and also giving 30 per cent.”SigSig community member

In a workshop conducted with SigSig residents, anattempt was made to draw up a balance, showinghow much the community had gained and lost romits agreement with PROFAFOR, although much o what the community put into the plantations can-not be satis actorily quantifed, such as the minga andthe work o the community leaders. Calculationswere made or plotting, dibbling, frebreaks, right o way, replanting, seedlings, maintenance, management,

training and so orth.

The community concluded that, even without tak-ing account o the value o the environmental liabili-ties the project has saddled local inhabitants with, or the cost o the plantations or another 15 years interms o labour, inputs, insurance, security, tools, har-vest and timber marketing, its losses already amountto over US$10,000.

Isn’t there anything the community can do tosave the situation?

PROFAFOR has a lot o power in this context. Oncea contract is signed, there isn’t much communitiescan do to modi y it, even when, as in SigSig, the



agreement with the company was signed by onlyf ty community members when there were over twohundred registered. l

PROFAFOR can even claim payment o compensation i its sta decide that a community hasnot ulflled its obligations. This compensation canamount to up to triple the original payments to thecommunities, or many tens o thousands o dollars(see Table 2).

Table 2

CommunitiesAmounts

initially o eredAmounts disbursed

to communityAmount o

penalty clausePenalty/

disbursement ratioCaguanapamba n.a. $15,716 $42,660 271%San Sebastián de SigSig US$75,600 $38,800 $108,000 278%Pisambilla $ 49,500 $27,000 $ 81,000 300%Mojandita AvelinoDávila

$ 21,450$11,700 $ 35,100 300%

Source: PROFAFOR Forestation Contracts

One villager reported:

“When I told the engineer Franco Condoy that wewanted to undo this agreement, he told us: You can-not rid yourselves o the agreement, the communeis mortgaged.”

According to Ecuadorian law, Condoy is wrong.Communal property o indigenous communities isnot subject to mortgages or land tax. Mortgages canonly be contracted with private estate and land hold-ers, individuals or corporate bodies. In practice, how-ever, Condoy is right, since even contracts involvingcommon property are subject to penalty clauses andfnes in the event o a breach, and PROFAFOR iswell able to en orce mortgage-like arrangements bytaking advantage o the inter-ethnic power relationswhich are a legacy o the colonial era in the region.

In one community, Caguanapamba, where the leaderswho had signed the contract mismanaged the PRO-FAFOR unds they were entrusted with, communitymembers did not get paid or the frst planting op-eration and many seedlings were lost. The leader whosucceeded them will now have to use the last instal-ment o unding in order to pay o the people whodid the original planting. To complete the frebreak,he has had to rent a machine with community undsand rely on labour rom minga.

All right, I can see that things haven’t all gone according to plan with carbon sinks in the Andes. But so what? Canyou draw any general conclusions rom all this?

In Ecuador, as elsewhere in the South, “carbon-sav-

ing” projects unded by industrialized countries, withtheir promises o income and “development”, haveattracted a lot o o cial attention.

The theory is that Southern countries have a hith-erto unrecognised and unpriced resource in the ormo spare or unused carbon-absorbing potential. Bybringing this dormant, unexploited resource intosomething called “the market”, the theory goes, theSouth will be able to trans orm it into living capitalor exchange it or cash or other things, adding to itswealth and to that o world society as a whole.

Over hundreds o square kilometres o the Ecuador-ian Andes, new transactions involving carbon are in-deed being made. But or the most part, they are nottextbook “market” transactions, nor do they addressclimate change, nor have they resulted in communi-ties realizing new value out o ormerly unused as-sets.



This section is extracted

rom the research o PatriciaGranda, who studied the FACE-PROFAFOR

project or Accion Ecologica,an Ecuadorian NGO.

What has happened instead is that common land,community labour and much o the paltry but crucialsavings o peasant communities have been trans erredto a private frm or production o a new commod-ity which, although largely notional, has the materiale ect o shoring up an anachronistic pattern o os-

sil uel use in The Netherlands. While claiming to“absorb” carbon, PROFAFOR has in act been ab-sorbing Andean wealth while helping to enlarge theNorth’s ecological ootprint in the South. Indirectly,it is also trans erring wealth rom uture generationsto the present, through its ailure to address climatechange.

The mechanisms that have done the real work inmaking this trans er possible are not the abstract,benign “wealth-creating” trade mechanisms o eco-nomics texts or manuals on “markets in environmen-tal services”. On the contrary, they are mechanismsthat compel, discriminate, narrow choices, increasedependence, reduce transparency, and centralizepower and knowledge in bureaucracies and expertinstitutions – just the sort o thing that this ghostlyentity called “the market” is advertised as reeing us

rom. These mechanisms include:

• Un amiliar tree species planted in exclusivemonocultures and requiring extensive technicalintervention.

• Non-transparent and exploitative written legalcontracts backed by historically-ingrained un-equal power relations, through which a privatecompany retains 100 per cent o the carbon sinkcredits rom plantations while local communitiestake on debt and responsibilities or maintenanceand managing environmental impacts.

• An internationally-disseminated discourse ac-cording to which the lands to be used or planta-tions have been “degraded” by excessive use andwhere subsistence activities such as cattle-raisingare “not proftable”.

• Expert procedures o “verifcation” o carbon owsthat by their nature are resistant to public scrutiny.

One last technocratic mechanism that makes PRO-FAFOR’s manu acture o carbon credits possible is“ orest certifcation”, a seal o environmental andsocial approval that was granted to 20,000 ha o PROFAFOR’s plantations in 1999 by the ForestStewardship Council (FSC). The FSC is an indepen-dent international body with membership rom bothindustry and NGOs, but the actual job o decidingwhether a plantation meets FSC standards alls toprivate frms hired by the plantation company. InPROFAFOR’s case, this was the Societe Generale deSurveillance (SGS), which has also certifed PROFA-FOR’s carbon sequestration.

These certifcations are important or PROFAFOR’sinternational transactions, since they reassure buyerswho will never visit the Andes that PROFAFOR’sproduct is a valid, environmentally- riendly com-modity. Buyers o FSC-certifed products generallyassume that they come rom plantations that “striveto strengthen and diversi y the local economy” and“maintain or enhance the long-term social and eco-nomic well-being o orest workers and local com-munities”. They assume that workers have been ade-quately trained. They assume that local communitieshave been comprehensively advised in advance aboutthe impacts o the relevant project and participate

ully in decision-making (FSC Principles). Finally,they assume that an environmental impact assess-

ment has been conducted, that threatened specieshave been identifed, and so on.

The SGS certifers boosted PROFAFOR’s credibili-ty on all these points, noting as one o PROFAFOR’sstrong points the “participation o local communi-ties in decision-making.” While recognizing that pineand eucalyptus can contribute to the degradation o soils rather than to their protection, they also praisedPROFAFOR’s continued “commitment” to use na-tive species.

Local communities’ lack o power to intervene in thecertifcation process helps lubricate PROFAFOR’Sinternational trade in carbon credits. No communitymember interviewed in 2004 even knew o the ex-istence o the FSC, nor o its Principles and Cri-teria, nor how they might be en orced. The publicsummaries o the visits by SGS are available on theinternet only up to the visit o the year 2000, andonly in English. Asked or in ormation at its o ce,PROFAFOR demands that a signed memorandumbe submitted be orehand, and even then ails to pro-vide the in ormation requested.



(Endnotes)a Verónica Vidal, La Aplicacion de Politicas Sobre Cambio

Climatico en el Sector Forestal del Ecuador , Memoriade Investigación Doctorado en Gestión Ambiental

y Economía Ecológica, Autonomous University o Barcelona, October .

b Since , PROFAFOR has established orestationcontracts in the provinces o the Ecuadorian Sierra:Imbabura, Pichincha, Chimborazo, Cañar, Azuay andLoja. It has also signed contracts in coastal provinces,in the bu er zone o the Mache-Chindul EcologicalReserve within the polygon ormed by El Carmen,Pedernales, Cojimíes, Muisne, Atacames, Bilsa andQuinindé, that is to say, in the north o the provinceo Manabi and in the south o the province o Esmeraldas.

c Robert Ho stede, “Impactos Ecológicos dePlantaciones Forestales”, in R. Ho stede, J. Lips, W.

Jongsma and J. Sevink, Geogra ía, Ecología y Forestaciónde la Sierra Alta del Ecuador: Revisión de Literatura,Editor ial Abya Yala, Ecuador, . See also RobertHo stede, “La Importancia Hídrica Del Páramo yAspectos de Su Manejo”, EcoPar, August .

d Vidal, op. cit.e G. Medina and P. Mena, “El páramo como espacio de

mitigación de carbono atmos érico, Serie Páramo, ”,GTP/Abya Yala, Quito, , quoted in Verónica Vidal,“Impactos de la Aplicación de Políticas sobre CambioClimático en la Forestación del Páramo de Ecuador”,Ecología Política, , , pp. - .

See http:// www.stichting ace.nl.g Ibid.h See also C. Borga and S. Lasso, Plantas Nativas para

Re orestación en el Ecuador , Fundación Natura, Quito,, available at http://www. ao.org/documents/

show_cdr.asp?url_fle=/docrep/t s/t s w.htmi Pro a or, op. cit.

j Mary Milne, “Transaction Costs o Forest CarbonProjects, Center or International Forestry Research,available at http://www.une.edu.au/ ebl/Economics/carbon/CC .PDF.

k Montserrat Alban and María Arguello, Un análisis de losimpactos sociales y económicos de los proyectos de jación de Carbono en el Ecuador : El caso de PROFAFOR-FACE ,IIED, London, .

l The agreement was signed using as a re erence adocument rom the property registry and some alse

title deeds.



4 The Story Continues:Carbon Forestry in Uganda

O ne thing can be said or the US-Guatemalacarbon trade mediated by CARE described

in chapter 2: it at least attempted to square the pro-duction o carbon or the North with local socialgoals. It would be di cult to say the same or a Nor-wegian project to grow carbon credits in Ugandathat started up a bit later. Journalist Harald Eraker,who investigated the project, labeled it as a case o “CO 2-lonialism”.

The Uganda project was closely tied to the construc-tion o conventional gas-fred power plants in Nor-way by Naturkra t and Industrikra t Midt-Norge.The plants were supported by Norway’s Labour Party, Conservative Party and Progress Party on theground that they could be made environmentally-

riendly through the purchase o carbon credits. a

Some o these credits were to be provided by TreeFarms, a Norwegian orestry company operat-ing in A rica. In 1995, Tree Farms (or Fjordgløtt, asit was then called) had been awarded a grant romNORAD, the Norwegian aid agency, to explore the

scope or activities in East A rica.b The ollowing year, the company set up in Tanzania and Uganda,and, later, in Malawi as well. In Uganda, it obtained

rom the authorities an extremely low-cost 50-year lease on 5,160 hectares east o the town o Jinja inthe Bukaleba Forest Reserve on Lake Victoria, whichit planned to plant mainly with eucalyptus and ast-growing pines. Bukaleba is one o more than 700large and small state-owned Central Forest Reservesset aside or orestry and orest protection, coveringin all seven per cent o the land area o Uganda. c

Shortly a ter the Kyoto Protocol was adopted in De-cember 1997, Fjordgløtt increased its capitalizationand invited outside investors to buy shares. By 2000,Tree Farms controlled at least 20,000 hectares o landin the region, and was in the process o acquiring a

urther 70,000 in Tanzania (see BOX: Tanzania). Thefrm had had planted 600 hectares, mainly with ast-growing pines ( Pinus caribaea, P. oocarpa, P. tecunumani )and eucalypts ( Eucalyptus grandis), with Industrikra tMidt-Norge securing a frst option on the associatedcarbon credits.

What does the Ugandan government get in return or turning over its land to this company or 50 years?

They get a one-o ee o US$410 and an annual rento about $4.10 or each hectare planted with trees.

The rent, paid in ast-depreciating Ugandan cur-rency, is adjusted every ten years according to theindex o in ation as defned by the Bank o Uganda.No rent is paid or areas that the companies havenot planted with trees. For six square kilometres o plantation established by 2001, then, Tree Farms hadpaid Uganda, when in ation is actored in, less than$11,000. For f ty years’ use o the same area o land,given current rates o in ation, it was set to pay lessthan $110,000.

That’s outrageous!

Yes. Several years a ter the deal was made, the deputycommissioner or orestry in the Ministry o Water,Lands and Environment, Ignatius Oluka-Akileng,told the Norwegian NGO Norwatch that the au-thorities had recently realized that investors were“taking advantage o the system” to get cheap land.O course, the act that no rent is paid or areas not

yet planted with trees makes such arrangementsparticularly attractive to land speculators. Yet it hasproved hard or the Ugandan authorities to negotiate

better terms. According to one reliable source, whenUgandan o cials tr ied to negotiate a higher rent or 12,000 hectares in the Kikonda Forest Reserve withthe Institut ür Entwicklung und Umwelt (IEU), aGerman company headed by a ormer Green politi-cian rom the European Parliament, the company re-

used, saying: “Our plane to Germany leaves tonight;i you don’t sign now, there will be no deal.”

Norwegian journalist Harald Eraker investigated early attempts byNorwegian power and orestry rms tosequester carbon onUgandan land.



One problem is that orest authorities o ten simplydon’t know how much oreign companies mightproft rom carbon trading (see BOX: No Need toKnow? The Secret Economy o Carbon, chapter 6),or how long they plan to keep plantation land outo other uses to ensure that carbon continues to bestored on it. Forest authorities, to say nothing o localpeople, are also poorly equipped to con ront min-isters, politicians and government climate negotia-tors who take advantage o their position and insideknowledge o European corporate and governmen-tal carbon plans to get unding that helps them gaincontrol o “degraded” state orest land.

Well, it’s not as though the land is being used or anything else.

Well, actually, it is. Since the 1960s and 1970s, localarmers and fshermen have moved in and out o

Norwegian as well as German concession areas in Bu-kaleba. In act, many people had migrated into the areaalready by the early 20th century. Although an out-break o sleeping sickness then caused people to ee,when the tsetse y vector was brought under controlin the 1970s, people moved back to Bukaleba, and IdiAmin authorized a cattle-herding project in the mid-dle o the reserve. Politicians under the Obote regimein the 1980s also supported settlements in the orestreserve, one minister observing that “trees don’t vote,but people do.” d People were once again evicted in1989-90. Crops were destroyed and houses torn down.Most evictees settled just outside the borders o the

orest reserve, but then slowly started venturing backinto the reserve to arm and fsh. By 2000, fve fshingand arming villages were inside the Tree Farms areain the Bukaleba Forest Reserve, and people rom atleast eight villages outside the reserve were cultivat-ing the earth on Tree Farms’ lease. Iganga distr ict, thelocation o the reserve, was densely populated withmigrants rom other parts o Uganda, as well as romneighbouring countries. With scant opportunities or work outside agr iculture, and with growing numbers,

pressure on land was strong.e

Neither the authorities nor Tree Farms knew howmany people were living or arming within the com-pany’s concession area. Estimates o the populationo one fshing village alone, Walumbe Beach, varied

rom 700 people to several thousand. One 1999 EU-supported study suggested that about 8,000 peopleearned a livelihood rom arming and fshing insidethe reserve.

But these people must be there illegally.

According to state law, yes. But some armers claimthey right ully bought the land they are now work-ing back in the 1980s, or that the land they are arm-ing has been owned by their amily or generations.

In any case, in 2000, orest authorities told Tree Farmsthat armers and fshermen now living in or usingthe Bukaleba reserve had been served notice to va-cate – although one o cial accused the Norwegiancompany o not telling the local people the truthabout their illegal presence in the reserve. g AlthoughTree Farms has said that it can accept the presence o fsher olk in the reserve, i the orest authorities agreeto designate an area or them, Tree Farms’ managingdirector has placed the job o evicting others in theauthorities’ lap, stating that the company will not do“the dirty job o throwing them out” itsel .

Apart rom the people rom the fshing village Wa-

lumbe Beach, however, no one interviewed by Nor-Watch in 2000 said that they had been given notice toleave the reserve. Several had heard rumours about it,while others were clearly surprised at the news. Somehoped that they might be allowed to stay – a hope per-haps based on the act that the environmental impactassessment comes close to recommending that fsher-men be allowed to stay to avoid social unrest. h Almostevery armer and fsherman told NorWatch that theyhad no other place to go, let alone land to arm. Allexpressed ears or the uture, and asked NorWatch toconvey to the Norwegian owners o Tree Farms their

request that they be allowed to stay or arm or fsh inthe reserve. i

Can’t Tree Farms provide jobs or local people to do?

Tree Farms originally employed several hundredpeople to manage the Bukaleba plantations. In 2000,however, only 43 were le t, according to the assistantadministrator at the company’s orest station, withonly 20 working on the plantations themselves.

Tree Farms did allow armers to grow maize, beans,and other products between the rows o plantedtrees during the frst ew years, until the trees grewtoo high or other plant li e to grow beneath them.According to the EU-supported study mentioned



above, however, this taungya scheme, as developedby Tree Farms, “resembles a Middle Age eudal sys-tem but without the mandatory ‘noblesse oblige’ andwith the armers paying or the bulk o the invest-ment cost o the plantation establishment.” j

First, local armers clear, plough, weed and manage theplantation areas at no cost; indeed, Tree Farms actu-ally encourages agricultural encroachment because itdepends on armers to “provide ree labour to groundclearing and weeding.” k Yet many armers reportedhaving to pay the frm cash or a share o their cropto be allowed to arm on the company’s lands. Oneextended amily with fve adults working on one acretold NorWatch that the previous year they had hadto pay 100 kilogrammes o maize to Tree Farms outo a harvest totalling 250 kg. l Con icts over land andunpaid labour were seen by several locals as threaten-ing the project’s uture as a provider o both wood andcarbon credits. Farmers have reportedly overprunedtrees, uprooted seedlings, and neglected weeding ine orts at surreptitious sabotage. m The Ugandan orestauthorities, meanwhile, reprimanded Tree Farms or low technical standards and demanded that the com-pany abandon taungya and “do some real investmentto produce quality tree stands.” n The eucalyptus plan-tations have also su ered termite attacks. By 2001, theTree Farms project was way behind schedule and su -

ering rom lack o unds. To raise some quick money,the company was even orced to clear 50 hectares or

commercial maize crops, arousing urther criticismrom the orestry authorities.

But is the project at least storing some carbon?

Tree Farms’ original management plan called or their plantations in the Bukaleba reserve to cover some 4,260 hectares o the company’s total area o 5,160 hectares by 2005. The frm anticipated beingable to sell 500 tonnes o CO 2 credits per hectare,or 2.13 million tonnes o CO 2 in all.o The account-ing that resulted in this fgure was wildly optimistic,ignoring not only risks, but also uncertainties andindeterminacies (see BOX: Global Warming and theGhost o Frank Knight, chapter 5). As with other bi-ological carbon projects, it is in act impossible to saywhat climatic e ect the project would have.

For one thing, proper carbon accounting or the proj-ect would require ollowing around thousands o evict-ees, many o whom would probably have to clear landelsewhere, resulting in carbon emissions attributable toTree Farms. This would be impossible, particularly ina country such as Uganda, where poverty, landlessness,and political instability keep people constantly moving

rom one end o the country to the other.

For another, advance sale o carbon credits wouldrequire that the long-term political uture o Bu-

kaleba be known in advance, so that any re-invasiono the area could be predicted and its e ects on car-bon storage precisely quantifed and insured againstor compensated or. Yet no basis exists or derivingnumbers o this sort.

The uture investment climate or such projectswould also have to be calculated, as well as the prob-ability o fres; the ecological e ects o plantationson local patches o native vegetation through hydro-logical or other changes; the soil carbon loss attribut-able to clear ing, ploughing and erosion caused by theproject. p Even to attempt to do all this would drivethe costs o the project through the roo .

I the original easy numbers posited by Tree Farmswere accepted by the market, however, they wouldtranslate into carbon profts on the order o US$10million, well over a dozen times Tree Farms’ outlayon land. This would not include possible income

rom timber and wood sales. Turning Bukaleba intoa Norwegian carbon plantation, moreover, wouldmean that its lands would not be available or longperiods either or agriculture or or plumping upUganda’s own carbon accounts.

It’s worth noting, incidentally, that i Norway tried toavoid all the emissions cuts it has to make by 2012under the Kyoto Protocol by planting trees in Uganda,then, even on Tree Farms’ untenably optimistic or iginal

carbon accounting, 40,000 hectares o Uganda wouldhave to be converted into tree plantations every year.

In sum, the project was not just a “lose-lose” initia-tive or orestry and local people, as concluded by theEU- unded study, q but in act a “lose-lose-lose” stateo a airs. The orestry e ects o the scheme were un-healthy, local villagers were su ering, and, as TrygveRe sdal, advisor to the Ugandan orest authorities,warned, Uganda was in danger o being subjected toa “new orm o colonialism”:

“Forest-planting in Uganda and other poor coun-tries must, frstly, aim to meet the needs o the coun-try and the local people, not the needs o the ‘inter-national community.’ I these can be combined, it’sOK, but experience rom similar initiatives show thatlocal interests, local needs, and traditional land r ightsare easily pushed aside, and that land con icts arisewhen outside commercial interests enter.” r

Growing international criticism ultimately preventedTree Farms rom claiming carbon credits or the proj-ect. But trees continued to be planted. A ter lengthynegotiations, the Norwegian owners conceded a

little under fve per cent o the land they had leasedrom the government to local people, but locals com-

plained that they were still paid badly and that mosto the labour was not sourced locally.



“The Money Came rom a Place Far Away”:Tanzanian Land, Norwegian Carbon

In addition to its project in Uganda (see main text),Norway’s Tree Farms company was also, by 2000,trying to acquire savannah land totalling over 70,000hectares in Tanzania. Between 1996 and 2000, some1,900 hectares o trees were planted in Mufndi andKilombero Districts at about 2,000 metres above sealevel, where a seasonally moist climate provided lotso water or thirsty industrial monocultures o Pinus

patula and Eucalyptus saligna.

The land had been leased rom the government atUS$1.90 per hectare per year or a 99-year period oncondition that it be used solely or orestry. Indus-trikra t Midt-Norge, the Norwegian power utility,meanwhile signed an options contract to pay TreeFarms nearly $4.50 per tonne o CO2 supposedlysequestered. Over a 25-year period, this would giveTree Farms a carbon proft o about $27 million or one plantation complex, Uchindile, compared to$565,000 paid to the Tanzanian government in com-pensation or losing the opportunity to do anythingelse with the land.

Yet according to Tree Farms Managing Director Odd Ivar Løvhaugen, the frm would have investedin Tanzania’s orestry sector regardless o possible car-bon money. Løvhaugen emphasised that the com-pany considers any trade in carbon credits merely as asupplement to those rom conventional orestry. TheTree Farms carbon project would thus be in breacho the requirements or carbon projects outlined bythe Kyoto Protocol, which disallow credits rom ac-tivities that would have been undertaken withoutspecial carbon fnance.

Promising various social benefts, the company hadsucceeded in overcoming villagers’ reluctance tocede their uncultivated land to the project, but in theend pledges to provide health and education serviceswere not kept. There were also labour problems. Upto 500 local villagers were hired to plant and nursethe trees, build roads, or watch over the plantations.But planting took place only between December andMarch, so the work could not replace agriculturalor animal husbandry occupations. In addition, thepromised wage was too low – US$1 a day, less thanthe government’s recommended minimum – or anything other than daily subsistence. More seriously,many workers were not paid at all. Some workersinterviewed by NorWatch in 2000 had eight monthso wages owing to them, while others complainedthat payments had been irregular and unpredictable

rom the beginning.

“When we asked about the salaries,” commented theresidents o Uchindile village, “the company told usthat the money came rom a place ar away and thatthere was nothing that could be done about it.”

The Tree Farms’ monocultures’ impact on biodiver-sity is unclear, since very ew ecological studies havebeen carried out in this part o Tanzania. Even theimpact assessment or the project, however, notesthree endangered plant species within Tree Farms’project area (two orchids and one Aloe species).

Source : Jorn Stave, NorWatch/The Future in Our Hands, “Carbon Upsets: Norwegian ‘Carbon Plan-tations’ in Tanzania”, in Friends o the Earth, Tree Trouble , Friends o the Earth, Asuncion, 2000 .



But perhaps the Tree Farm experience will lead to lessexploitative arrangements in the uture.

Sadly, the evidence suggests otherwise. The interna-tional carbon economy has subsequently played a bigpart in stimulating land grabs by private developersin Uganda’s state orests. In 2003, several o cials o the Ugandan government, including not only ormer vice-president Dr Specioza Kazimbwe but also o -cials amiliar with the international climate negotia-tions, received large concessions or land suitable or a orestation and re orestation, while communitiesalso applying or concessions were le t empty-hand-ed and may be excluded rom access to the orests inthe uture. The World Bank has meanwhile namedUganda as one o the A rican countries to beneft

rom three o its carbon fnance unds, the PrototypeCarbon Fund, the Bio Carbon Fund and the Com-munity Development Carbon Fund.

Recent carbon orestryinitiatives in Uganda

have been researched byTimothy Byakola o the Ugandan NGO ACS.

Meanwhile, a carbon project o the Uganda Wildli eAuthority (UWA) and The Netherlands’s FACE Foun-dation s to plant trees in a national park has contributedto a ra t o social and environmental problems.

Not again!

I’m a raid so. The idea, as usual, sounded innocentenough: to plant mainly native trees in encroached-upon areas inside and along the boundaries o MtElgon National Park near the Kenyan border. In1994, FACE undertook planting and in return wasgiven rights over the carbon supposedly sequestered

– expected to amount to 2.11 million tonnes o CO2over 100 years. t UWA’s role was to manage the plan-tations, protecting biodiversity, sa eguard park bor-ders and so on.

As documented by Timothy Byakola o the UgandanNGO ACS, no one denies that the project has had

some good e ects. It is acknowledged by locals ashaving improved regeneration on the boundaries o the park, particularly in areas that had been badly en-croached on by agriculture, and as having increased

stream ow rom the orest. In 2003, the UWA-FACEproject was even certifed by Societe Generale deSurveillance as a well-managed orest according toForest Stewardship Council principles. But the evic-tions associated with the project have contributed toa whole ra t o social and environmental problems.

Like what?

Homeless and hungry people, or one thing. In 2002,or instance, 300 amilies were evicted rom disputed

land by park rangers in Wanale, Mbale District. Com-plaining that they had lived on the land or 40 years,with some even holding government land titles, the

amilies said that they were orced to seek re uge inneighbouring villages where they now live in cavesand mosques. Fires have to be kept burning the wholenight in the caves to protect against cold, and school-going children have had their studies disrupted. Dodg-ing armed ranger patrols, children slip back to their

amilies’ ormer gardens to steal what they regard astheir own ood. Local people have lodged a case seek-ing compensation or destroyed property and the re-turn o their land with the Mbale district court.

Hundreds o amilies have also been evicted in other locations, increasing social tensions. u In 2003, villag-ers disgruntled at UWA’s militarized approach de-stroyed over 400 hectares o eucalyptus plantations inone night. At a November 2004 community meeting

held in Luwa trading center, Buwabwala sub-county,evicted locals insisted that they would go back to theorest rather than ace starvation. The park warden,or his part, promised that whoever would be caught

in the orest would be shot.

In act, so tense has the atmosphere become thatmembers o parliament rom eastern Uganda haveappealed to the government to degazette Mt Elgon’sboundaries to ease the su ering.

Conservation En orcement and Local People: Voices o Protest

“The boundaries were made unilaterally, displacingover 10,000 people. The wildli e people who operatethe park are very militarized, and have killed over f ty people.”

David Wakikona, Member o Parliament, Manjiyav

“The biggest problem is how to secure ood or theamily. All our gardens, where we used to get ood,

have been taken over by the park rangers”.

Amina Gidongo, widow and mother o seven childrenliving in a cave as a result o having been evicted



But maybe a little short-term pain was necessaryin order to preserve the orest and its carbon.

But what else gets destroyed in the process? It’s not just a matter o temporary social dislocation, but also

armland shortages, environmental damage outsidethe park, and disrupted relationships between localpeople and the orest.

Today, with a population density o over 450 peopleper square kilometre in the armlands around Mbaletown and 250 per square kilometer in Kapchorwadistrict, the village areas bordering Mount ElgonNational Park are the most densely populated inUganda, partly due to UWA evictions. Communitiesliving close to the orest mainly grow ood crops likebananas, yams, sweet potatoes and vegetables at baresubsistence levels with ew surpluses remaining or sale in local markets. Production o a ew cash cropslike co ee and wheat is ast dwindling due to rag-mentation o land. A typical peasant holding in thearea averages between 0.25 – 1.0 ha, with a house-hold having an average o 10-15 members.

One result is that soils are quickly losing ertility.Most o the trees and other vegetation in the villagesoutside the park have been cut to provide uel-wood

or cooking and building materials, leaving open anddenuded slopes. De orestation has le t the land opento erosion as more areas are being converted to ag-

riculture. In 1996, a one-kilometre landslide killednine people in Budesi and Buwali parish, and duringthe heavy rains o the 1997 El Nino, another fveby landslides in Bunabokha village in Budesi parish.Many locals are concerned that rivers owing romthe mountain are now carrying higher sedimentloads, especially during rainy seasons. Communitiesand community development organizations alikenote that fsheries have su ered.

All this is due to there being too many people. That’snot UWA-FACE’s ault.

It’s not so simple. Land scarcity in the area is partly aresult o the “encroachment” o the national park onlongstanding armland, and the hand o the evictionauthorities has unquestionably been strengthened bythe project.

Survival and the preservation o social networks havealso been endangered when UWA cuts o villagers’access to intact orest and its animals, bamboo shoots,frewood, mushrooms, vegetables, herbs, medicines,building materials, and wood used in circumcisionceremonies.

“W hen the UWA people came with their tree-planting activities, they stopped us rom getting

important materials rom the orest. We were stoppedrom going up to get malewa(bamboo shoots), which

is a very important traditional ood in the area and

is a source o income. They were certain productsthat we used to get rom the orest or the embaluceremony (circumcision ritual) to be per ormed inthe proper traditional way.”

Cosia Masolo, evicted village elder and ather o 20now living on a 0.3 hectare piece o land in Mabembe,

Buwabwala sub-county.

In Bubita sub-county, council o cials reported thatfrewood is now hard to fnd and that people have re-sorted to using banana leaves to prepare ood, mean-ing they can no longer eat oods that require longcooking. Goats and cows have to eat banana stemsbecause the orest where they used to graze on grassis now a no-go area. In Buwabwala, many young girlsare crossing over to neighboring Kenya to earn mon-ey to buy land or their parents. Some have movedinto prostitution and contracted HIV.

But hasn’t the project improved the economy o the region?

Locals indignantly reject FACE Foundation claimsthat the project has increased incomes, improvedstandards o living work, provided jobs in planting

and nurseries, and given out seedlings or villagers toplant on their arms.



A Funny Place to Store Carbon:The History o Land Disputes at Mt. Elgon

Mt. Elgon was frst gazetted as a Crown Forest in1938 and became a central Forest Reserve in 1968and a National Park in 1993. But the area has a longhistory o human occupation and use. Already in the1930s, many amilies were living within the bound-ary, with about 70 heritable licences issued to ami-lies living and cultivating the orest reserve. In 1954,when the frst working plan or Mount Elgon or-est reserve was written, there were still around 30licensed amilies living there.

Forest boundaries were originally marked by holes.In 1962, the orest was resurveyed and live boundarymarkers, including trees o exotic species, were putin place. However, the boundaries were not plottedon the national land grid, making it hard later onto establish where they had been when the markerswere destroyed.

Between 1970 and 1985, during an era o breakdowno law and order, high levels o industrial timber ex-ploitation and con used orest policy, some 25,000hectares o prime high montane orest between 2000

– 3000 metres in altitude were destroyed or degraded

through clearing or agricultural activities. Pit-saw-ing combined with swidden cultivation reduced thedensely- orested lower slopes to barer landscapes col-onized by Kikuyu grass ( Pennisetum clandestinum).w

In 1993, the orest was designated as a national parkamid acrimonious intra-governmental wrangling,politicking and donor pressure. In 1989, Uganda Na-tional Parks had unilaterally requested the cabinet toendorse designation o Mt Elgon as a national park.

But local people were not consulted, in violation o

the law. Families ound inside the 1963 boundaries – some o whom had occupied the land or over 40 years – were given nine days to vacate, despite the un-derstanding among many o them that the land wastheirs and that such arbitrary evictions are in breacho land laws as well as the subsequent 1995 Constitu-tion, which recognizes customary ownership.



(Endnotes)a See the website o the Norwegian organization Joint

Action Against Gas-Fired Power Plants (http://www.grida.no/ngo/ mg/eng/index.htm).

b NORAD (Norwegian o cial aid agency), letter toNorWatch, 30 March 2000.

c Trygve Re sdal in telephone conversation, March2000.

d Ibid.e B. Koppers, Social Impact Assessment o the Proposed

Natural Forest Resources Management and ConservationProgram, K Consult, Oslo, October 1999.

D. N. Byarugaba, Commissioner or Forestry, Utilisationo Bukaleba Forest Reserve , 25 January 2000.

g MP Bunya West, letter regarding utilisation o Buka-leba Forest Reserve, 25 January 2000. This harsh let-ter was a reaction to a proposed solution or the landcon ict put orward by a parliamentarian rom thedistrict on behal o the Norwegian and the Germancompany. The proposal entailed (e.g.) that those onlyengaged in fsheries could keep a landing site or thefshing boats, and that the rest o the intruders had toleave the reserve by the end o July that year.

h John R. W. Aluma, Report on Environment ImpactAssessment o the Management Plan or BukalebaForest Reserve under Busoga Forestry Company Lim-ited, consultant’s report, September 1999.

i The company’s environmental impact assessment,too, has noted the ears o local people: “The [local]communities have expressed very strong desire to bepermitted to continue to stay there [in the reserve] asit would be extremely di cult to fnd alternative loca-tions and activities or livelihoods” Yet the summaryo the impact assessment states that the armers andfshermen “consider the project as a positive socio-economic development” or the area. Ibid.

j Koppers, op.cit.k Nsita Steve Amooti, Forest O cer, Field Visit to Buka-

leba Forest Reserve , 24 November 1999.l According to one report, armers must also pay a cash

rent ranging rom 10,000 to 85,000 Ugandan shillingsper hectare, at a time when Tree Farms is only paying5,000 shillings per year to the authorities or everyhectare planted with trees. Ibid.

m Koppers, op. cit.n Nsita Steve Amooti, op. cit.o Odd Ivar Løvhaugen, email, 20 January 2000.

p Intergovernmental Panel on Climate Change, Special Report: Land Use, Land-Use Change, and Forestry, Dra t Summary or Policymakers, Ox ord, Ox ord UniversityPress, 2000.

q Koppers, op. cit.r Trygve Re sdal, email, 24 March 2000.

s FACE Foundation (Forests Absorbing Carbon-DioxideEmissions) contributes fnancially to the “re orestation”o about 150,000 hectares worldwide. FACE is an ini-tiative o the Dutch Electr icity Generation Board.

t According to a Societe Generale de Surveillance as-sessment report done in 2001, the project is expectedto result in an increase in the average storage capacityo 3.73 million tones o CO 2 over its 99-year li espan.SGS is the world’s largest inspection, verifcation and

testing organization.u New Vision, Monday, 15 April 2002. New Vision is

Uganda’s leading daily newspaper.v New Vision, 30 June 2004.w Miriam van Heist, Land Unit Map o Mount Elgon

National Park , IUCN technical report, Gland, unpub-lished, 1994.



5 Costa Rica:“Environmental Services” Pioneer

C osta Rica has always been one o the countriesin Latin America keenest to host carbon

orestry projects and other “environmental services”schemes. In the mid-1990s, looking or new ways toderive value rom its orests, it decided to become thefrst country to bring its own government-backedand -certifed carbon orestry credits into the globalmarket, a and even be ore Kyoto was signed was sellingthem to the Norwegian government and Norwegianand US corporations.

To work on the scheme, Costa Rica hired Pedro

Moura-Costa, a Brazilian orester with experienceon early Malaysian carbon orestry projects backedby The Netherlands’s FACE (see chapters 3 and 4)and New England Power o the US. Moura-Costain turn convinced Societe Generale de Surveillance(SGS), one the world’s leading testing, inspection, andcertifcation companies, to use Costa Rica as a test site

or learning how to make money as a carbon creditcertifer, and on the back o his own experience setup a new carbon consultancy, EcoSecurities. An earlyCosta Rican project called CARFIX – implementedby the voluntary organization Fundacion para el

Desarrolllo de la Cordillera Volcanica Central andunded by US Aid or International Development(USAID), the Global Environmental Facility andNorwegian fnanciers – earned its North Americansponsors carbon credits by promoting “sustainablelogging” and tree plantations on “grazed or degradedlands”, claiming to provide locals with incomethey would otherwise have to earn through orest-endangering export agriculture and cattle production.b Following the emergence o the Kyoto Protocol in1997, Costa Rica pushed or the same certifcationtechniques it had pioneered to be adopted aroundthe globe, and signed urther carbon deals withSwitzerland and Finland.

Costa Rica’s enthusiasm or carbon o set projects seemsto suggest that there are a lot o bene ts in this market

or the South, a ter all.

The enthusiasm is not unanimous, even in CostaRica. In act, the boom in carbon orestry fts into anexisting trend o support or monoculture tree plan-tations that has aroused much concern among localenvironmentalists. Between 1960-85, about 60 per cent o Costa Rica’s orests disappeared due to catt-

le arming. Then there was a “wood shortage” scare,and the government subsidized monoculture treeplantations extensively between 1980-1996. Helpedby government incentives, over 130,000 ha has been

covered by monoculture tree plantations over thepast 20 years, with the total plantation area in 2000standing at 178,000 ha (well over three per cent o Costa Rica’s territory).

A typical ecosystem on which a Costa Rican plantationmight be established. The carbon released rom the standing trees removed to make way or the plantation o ten will not appear in project accounts.

The CDM, Costa Rican environmentalists ear, mayhelp spread monoculture tree plantations even ur-ther. In the late 1990s, a government o cial activein the climate negotiations helped promote a newlaw supporting monocultures. Hal o a 3.5 per cent

uel tax went into an “environmental service progra-mme” designed largely to give incentives to priva-te landowners to be “green” in a country in which20 per cent o the land is national parks, a ew per-cent indigenous territories and the rest private land.Under the programme, a landowner might get, or example, US$90 per hectare per year to conserve o-rest, or $500 per hectare over fve years to establish

a plantation. In return, the state gets rights to thecarbon in the plantation, which it can use to bargainwith in international negotiations.



How much o this tax money goes to orest conservation,and how much to plantations?

Most payments under the environmental servicesprogramme go to orest conservation, but 20 per cent is used to subsidize monoculture plantationsand agro orestry. This has roused objections romecologists, academics, indigenous peoples whoargue that monoculture plantations, o ten lucrativein themselves, can damage the soils, water andbiodiversity that the programme is supposed toprotect. The programme may also soon be supportedby a tax on water and electricity.

A 12-year-old plantation o Terminalia trees. The carbonreleased rom eroded soils such as appear in the photographo ten does not appear in project accounts.

Still, twenty percent is a pretty small proportion, isn’t it?

Overall, Costa Rica is today putting US$1.5 millionannually into fnancing 4-6,000 ha per year o newplantations. That may not seem much, but CostaRica’s total territory is only a bit over fve millionha. A UN Food and Agriculture Organizationconsultant’s study has suggested that the countryset up even more plantations, up to 15,000 ha per

year, using carbon money. Another study estimatesthat, during the period 2003-2012, some 61,000hectares o monoculture plantations, or 7,600 a year,

could be established in so-called “Kyoto Areas”.That’s well above the current rate, c implying thatplantations could start competing aggressively withland that might otherwise be given over to secondaryregeneration and conservation o native orest.

In addition, because CDM orestry projects, or economic reasons, would probably have to cover 1000 ha and up (see below), they could well threatenthe land tenure o people carrying out other orestprojects in Costa Rica. The average landholding inthe country is less than 50 ha, with most parcelsbelonging to amilies, although o course hugecorporate arms also exist. Land concentration inconnection with monoculture tree plantations isa amiliar phenomenon rom around the world,

including areas o Costa Rica where pulpwoodplantations have been set up. d

Research or this section was done by Javier Baltodano o Friends o the Earth-Costa Rica.

But again, sacri ces do have to be made or the climate,don’t they?

Ironically, one o the things that the Costa Rican casereveals is the impossibility o determining whether the climate in act would beneft rom a policy o pushing such projects – or even o ulflling theconditions set out in the Kyoto Protocol and theMarrakech Ministerial Declaration e or re orestationand orestation carbon projects.

Take, or example, a study on carbon projects doneby the Forest and Climatic Change Project (FCCP)in Central America, jointly executed by the Foodand Agriculture Organization o the UN and theCentral American Environmental and DevelopmentCommission (CCAD).

Research done or the FCCP report shows thatavailable soil use maps are not precise enough toshow how carbon storage in prospective carbon sinkareas (or Kyoto Areas) has changed since the 1990s,and are also hard to compare with each other. Thatwould make accounting or increased carbon storageover the period since then impossible.

The study’s conclusions also suggest that it wouldbe impossible to show to what extent Kyoto carbonprojects were additional to “those that the countryimplements as part o its orestry developmentprojects”: “it is not possible to predict in what exactproportion these activities will be in or out o theKyoto Areas and any assumption in this respectis enormously uncertain”. In addition, Kyotocarbon projects could fnd it hard to actor outthe anthropogenic activities to encourage naturalseed nurseries that are being promoted and undedwithout carbon fnance. One example is landowners’protection o their lands against livestock and fresthat has been paid or since 1996 by the NationalFund or Forestry Financing (FONAFIFO).

The FCCP study reveals, above all, the tensions be-

tween accounting convenience and accuracy in mea-suring carbon. For example, it considers that mea-surements o soil carbon be ore and a ter the start o any carbon orestry project would be too costly, even



though such measurements are widely held to be akey to carbon accounting or plantations, which dis-turb soil processes considerably. g Similarly, the studyaccepts or convenience a blanket carbon storage fg-ure o 10 tonne/ha or grassland sites that could beconverted to carbon orestry. However, Costa Ricaboasts too wide a variety o grasslands and agricul-tural systems – most o them comprising a lot o trees

– or such a fgure to be used everywhere. h

A new teak plantation near the San Carlos River in nor-thern Costa Rica. Exposed soil heated by direct tropical sunlight is likely to release signi cant quantities o carbon.

But can’t you cover such unknowns just by taking the amount o carbon you think you might be sequestering and reducing the gure by a certain percentage, just to be on the

sa e side?

That’s what many carbon accountants do. The FCCPstudy, or example, suggests a 20 per cent deduction

rom the fgure designating total potential o carbonsequestered to compensate or political and socialrisks and a 10 per cent deduction to compensate or technical orestry risks.

The problem with such “risk-discounted” fguresis that carbon sequestration is characterized by ar more than just risk. This goes back to a distinction

frst made by the economist Frank Knight 80 yearsago between risk and uncertainty (see BOX: GlobalWarming and the Ghost o Frank Knight).

In situations characterized by risk, all possible outco-mes are known in advance and their relative likeli-hood expressed as probabilities. In such situations, itmakes sense to talk about “margins o er ror” and sa elevels o discounting.

Where the probabilities o outcomes are unknown,however, you’re aced with a situation o incalculableuncertainty.

The situation is even more serious when not even allthe possible outcomes are known. i Such conditions

o uncertainty and ignorance, and not simply risk, arethe typical realities that biological carbon account-ing has to cope with. j In these conditions, it’s impos-sible to be sure whether any particular numerical r isk

actor is conservative enough to compensate or theunknowns involved.

In Costa Rica, or instance, most monoculture treeplantations are less than twenty years old, with atrend toward planting just two species – Gmelina ar-boreaand Tectona grandis. Pest or disease epidemics canthere ore be expected, but their extent is incalculableat present. Furthermore, El Niño climate events maypropagate enormous fres whose extent, again, can-not be calculated in advance. During the dry seasono 1998, in the humid tropical zone where uncon-trollable fres had never been reported be ore, over 200,000 hectares were burned. Part o this terr itory isunder monoculture tree plantations. Given such rea-lities, it’s unsurprising that the FCCP carbon projectstudy could give no reasons or its low “technical”risk fgure o 10 per cent. There is in act no scientifcbasis or the assignment o any such number.

At present, there is also little basis or guessing howmuch carbon sequestered in Costa Rican trees willre-enter the atmosphere and when. The FCCP studysimply assumes that 50 per cent o the carbon se-questered by a given project will remain so once thetimber has been sold and used. However, the most

common plantation species in the country ( Gmelinaarborea) is logged at least once every 12 years andmost o the timber is used to manu acture pallets totransport bananas. The pallets are thrown away thesame year they are made and probably – though noone has done the empirical studies necessary – storecarbon no longer than a ew years.

The FCCP study also assumes that anthropogenicactivities to oster natural seed nurseries will resultin secondary orests that will be in place or at least50 years. Accordingly, they make no deductions or re-emission o carbon . However, although current

orestry law prohibits trans orming orests into grass-lands, both legal changes and illegal use could resultin large re-emissions whose size would be impossibleto determine in advance.

It seems that one o the big problems with doing the ac-counts or orestry “o set” projects is that you can’t store carbon permanently in trees.

The impermanence o tree carbon isn’t itsel a prob-lem, but rather the act that you can’t veri y how im-permanent it is.

Everyone knows that the carbon stored in trees has adi erent li espan rom the carbon le t undergroundin coal, oil and gas deposits. Over historical time



spans, the carbon in ossil deposits will stay prettymuch where it is unless somebody disturbs it. Youdon’t need to worry too much about it leaking outto the atmosphere. But once carbon enters the above-ground system consisting o the air, oceans, trees,grass, soil, resh water, and so orth, things change.No part o the above-ground pool o carbon can bepermanently separated rom the atmosphere. It be-longs to a system in which carbon is always cyclinginto and out o the air in hard-to-predict ways.

So when you try to “sequester” this carbon in trees – to separate it rom the atmosphere – you know thisseparation is going to be temporary compared to theseparation between underground ossil carbon andthe atmosphere. Eventually the carbon in the trees isgoing to go into the air. The only question is when.The carbon in grass or a tree trunk, in the top seveninches o soil, in urniture or paper or a cigarette, mayall be separated rom the atmosphere or a while, butin a way much harder to predict than the way thecarbon in coal deposits a kilometer underground or in carbonate rock dozens o kilometers beneath thesur ace is separated rom the air. To put it another way, ossil carbon ows into the biosphere/atmo-sphere system are essentially irreversible over non-geological time periods, while those rom the atmo-sphere into the biosphere are easily reversible and noteasily controlled.

Fossil Carbon vs. Forest Carbon:Two Environmental HistoriansSpeak

“Carbon cannot be sequestered like bullion. Biologicalpreserves are not a kind o Fort Knox or carbon.Living systems store that carbon, and those terrestrialbiotas demand a fre tithe. That tithe can be givenvoluntarily or it will be extracted by orce. Takingthe carbon exhumed by industrial combustion romthe geologic past and stacking it into overr ipe livingwoodpiles is an approach o questionable wisdom . . .Eliminate fre and you can build up, or a while, carbonstocks, but at probable damage to the ecosystemupon the health o which the uture regulation o carbon in the biosphere depends. Stockpile biomasscarbon, whether in Yellowstone National Park or in aChilean eucalyptus plantation, and you also stockpile

uel, the combustion equivalent o burying toxicwaste. Re use to tend the domestic fre and the eralfre will return – as it recently did in Yellowstone andBrazil’s Parc Nacional das Emas, where years o fre

exclusion ended with a lightning str ike that seared 85per cent o the park in one fery ash.”

Stephen J. Pyne, Arizona State University k

“Undeniably, having more trees will work in the rightdirection – but to a minute degree. For its practicale ect, telling people to plant trees is like telling themto drink more water to keep down rising sea-levels.”

Oliver Rackham, Cambridge University

But storing carbon or even a short time inbiological systems can still delay carbon buildup inthe atmosphere and there ore delay climate change.So biological carbon, even though temporary, is stillhighly relevant to climate change and should bepreserved wherever possible. Accordingly, carbon

orestry projects needn’t be permanent to be use ul.

Exactly! So why can’t we just gure out how muchtemporary carbon storage in trees is equivalent tokeeping X amount o ossil uels in the ground?

That’s the unjustifed leap that many techniciansand politicans make. They assume that just becausetrees are good or climate, there has to be a way o measuring how many trees equals, in climatic terms,how much ossil uel emissions.

The o cials and diplomats responsible or the CDM,or example, have committed themselves to the claim

that a world that closes a certain number o ossiluel mines ought to be equivalent to a world that

leaves them open but plants a certain number o newtrees. They have embedded in the Kyoto Protocol

the doctrine that planting a certain number o treescan make industrial emissions “climate-neutral” or “carbon-neutral”.

What has arisen is what scholar Eva Lovbrand calls a“political requirement” to “determine the long-term

ate o carbon stored in biomass and soils” l and tocommensurate it with underground ossil carbon.To meet this politics, technicians have been busycoming up with accounting methods or trying totackle the problem that carbon stored in trees may bere-emitted to the atmosphere at any time.

The Global Change Group o the Tropical AgronomicCentre or Research and Teaching (CATIE), or example, has been assessing ways o putting non-permanent biological carbon in the same ledger with

ossil carbon emissions, so that the two can be addedand subtracted, in ways relevant to Costa Rica andCentral America. m



Trust Me, I’m a Doctor: Three Pro essionals on How to Measure Carbon O sets

“ ...I’ve o ten mysel , when I’ve been ying in an air-cra t, and I’ve own over complex landscapes, and . . .how the hell can you measure carbon down there toa ew per cent? The people that measure the carbon,either by satellite measurements or by ux towers,or by, sort o , sort o looking at the orest… all claimthat within some reasonable degree o accuracy or precision you can do it. But when I look down on acomplex landscape, I have to be honest, it’s . . . um . . .I get very impressed i these guys are indeed correct.But, hey, the act that when I look down in an aircra tand I think its going to be complicated, that’s my gutinstinct versus the scientifc community’s. And theyclaim they can demonstrate what precision and accu-racy they can get. . . . One has to go with what thesescientists are saying.”

Dr. Bob Watson, Ex-Chairman,Intergovernmental Panel on

Climate Change, interview with CathyFogel, Washington DC, 6 October, 2001.

“I you know that saving the Amazon is better or theatmosphere than keeping one car o the road, then

you ought to be able to calculate how many cars are

equivalent to saving the Amazon. The calculationsmay be di cult, but I don’t see why the problemsshould be insurmountable.”

Dr. Richard Tipper, EdinburghCentre or Carbon Management

“Baselines are not a question o imagination. At theInternational Centre or Research in Agro orestry,we have developed a method or monitoring andevaluation o environmental and development proj-ects that involves project baseline measurement or any response variable that one deems important (e.g.household income, adoption o improved armingtechnologies, etc.). This same method could easily beused or carbon accounting and take the guessworkout o ‘without-project’ baselines, additionality andleakage. The simple solution to a problem that hasbeen overcomplicated in the debate is: just measureit! It is really not that hard. Environmental monitor-ing is a mature feld and rigorous methods exist or attributing project impact.”

Dr. Louis Verchot, Lead Scientist or Climate Change, International

Centre or Research in Agro orestry

It sounds like a great idea. What’s the problem?

Well, let’s look at one proposal or biological carbonaccounting surveyed by CATIE. This is “tonne-year”accounting.

The frst step in tonne-year accounting is to deter-mine the period that a tonne o carbon has to besequestered in order to have the same environmen-tal e ect as not emitting a ton o carbon. Becausethe li etime o greenhouse gases in the atmosphereis limited, this time period should be fnite. I the“equivalence actor” is set at 100 years, then onetonne o carbon kept in a tree or 100 years and thenreleased to the atmosphere is assumed to have thesame environmental e ect as reducing carbon emis-sions rom a ossil- uelled power plant by one tonne.

The second step is to multiply the carbon stored over a particular year or decade by the complement o this equivalence actor to fnd out what the climaticbenefts are o that project or that year, and to limitthe carbon credits generated accordingly. So the or-estry project doesn’t have to be permanent to gener-ate carbon credits, it will just generate ewer creditsthe more short-lived it is.

You still haven’t mentioned any problems.

The frst problem is that you still have to measure the

carbon stored by a project over a particular year or decade. That runs into the same problems with igno-rance, uncertainty and all the rest mentioned above.Second, no one knows how long the “equivalencetime” should be. Figures ranging all the way rom 42to 150 years have been mentioned. n Another di cultyis that even i one settles on a fgure o , say, 100 years,it does not necessar ily ollow that carbon sequestered

or ten years will have 10/100 th o the climatic e ecto being sequestered or 100 years. Again, the prob-lem is not that any given patch o trees is temporary,but that there’s so much uncertainty and ignoranceabout how to measure its relevance to climate. It’snot a matter o calculable “risk”, but something ar more recalcitrant to market accounting.

In addition, tonne-year accounting can make whatallowances it does make or uncertainty only at thecost o generating carbon credits very slowly. Thatmakes it unattractive to business. It also militatesagainst small projects. The CATIE study ound thatat prices o US$18 per tonne, the tonne-year meth-odology allows or proftability only in projects o over 40,000 ha.



Aren’t there other possible accounting methods?

CATIE surveyed several, but they all run up againstsimilar problems o uncertainty, scientifc ignoranceand the impossibility o reconciling cost and verif-able climatic e ectiveness.

For example, a method called “average storage adjusted or equivalence time” (ASC) gives you morecredits more quickly, but only at the cost o makingunwarranted assumptions about how long biologicalcarbon can be verifably sequestered.

A Costa Rican acacia plantation. The logs in the oreground have been discarded and le t to rot. In a ew years,they will release all their carbon back to the atmosphere.

Then there are the UN’s “temporary” CERs, whichexpire at the end o the Kyoto Protocol’s secondcommitment period and must be replaced i retired

or compliance in the frst commitment period; and“long-term” CERs, which expire and must be re-placed i the a orestation or re orestation project isreversed or ails to be verifed. These beg the ques-tion o how such credits are to be verifed in the frstplace and also involve complex accounting and higheconomic risk to business.

In the end, CATIE came to the conclusion thatCDM orestry projects had to be big in order or it tobe worthwhile to ulfl all the accounting and other requirements. Out o a total o over 1500 simulatedscenarios, only eight per cent made it possible or projects under 500 ha to participate. The mean sizeo a project or the sale o carbon to be proftable was5,000 ha. One way out would be to bundle smaller projects together and employ standardized assump-tions and procedures, but again that would magni-

y accounting mistakes and also would be hard toachieve given the Costa Rican land tenure system.

You’ve talked a lot about how much harder it is tomeasure how much carbon is sequestered in tree projectsthan simply to keep ossil carbon in the ground. But maybe we don’t need to compare carbon sequestered

in trees with carbon stored or the long term in ossil deposits. Isn’t it true that about a quarter o the excessCO2 in the atmosphere comes rom de orestation? The atmosphere doesn’t care whether its carbon dioxide hascome rom burning coal or rom burning orests. We should think o orestry carbon projects like Costa Rica’sas replacing carbon released rom orests, not as replacing carbon released rom ossil uel combustion. The point o carbon orestry should be to help stabilize biospheric carbon releases to the atmosphere by returning more carbon rom the air to the land, not to compensate or

ossil uel use. This should solve the measurement prob-lem, since all we have to do is compare biospheric carbonwith other biospheric carbon.

No, that has no e ect on the measurement problem.It’s impossible to quanti y verifably the e ect anyparticular orestry project has on the climate, wheth-er the project is taken to be “compensating” or ossil

uel burning or “compensating” or orest destruc-tion elsewhere.

What makes comparison between biospheric andossil carbon impossible is that the whole above-

ground carbon system is uid, with relatively weakboundaries between trees, atmosphere, water and soon, compounded by the inclusion o all these thingswithin social systems. Un ortunately, the same char-acteristic – uid boundaries and entanglement withsocial systems – also makes it hard to veri y how

much carbon is being saved as a result o a particular project, and thus whether a project is changing thebalance o the above-ground carbon complex.

Yes, climate change can be addressed by trying toconserve orests just as it can be addressed by keeping

ossil uels in the ground. But it can’t be verifablyaddressed by burning orests and then “compensat-ing” or this burning with biospheric projects anymore than it can be verifably addressed by mining

ossil uels and then “compensating” or their trans er to the biosphere with biospheric projects.

What’s the uture or Costa Rican carbon orestry projects?

The government has recently declared that it will putmore e ort into non- orestry projects such as wind-mills and hydroelectric schemes on the ground thatthey are less complicated and yield higher-pricedcarbon credits. On the other hand, companies such asthe US-based Rain orest Credits Foundation o con-tinue to be eager to set up new carbon schemes inCosta Rica, o ten without much prior consultationwith the government.



Global Warming and the Ghost o

Frank Knight

Frank H. Knight (1885-1972), a University o Chicagoeconomist recognized as one o the deepest thinkersin 20 th century US social science, is amous or hisdistinction between risk and uncertainty. Although hecould never have anticipated all the ways it could beapplied, Knight’s 1921 distinction helps explain why itis con used to put any aith in a market or emissionscredits generated by carbon-saving projects.

Risk, in Knight’s sense, re ers to situations in whichthe probability o something going wrong is well-known. An example is the ip o a coin. There is a50-50 chance o its being either heads or tails. I yougamble on heads, you risk losing your money i itturns out to be tails. But you know exactly what theodds are.

Uncertainty is di erent. Here, you know all the thingsthat can go wrong, but can’t calculate the probabilityo a harm ul result. For example, scientists know thatthe use o antibiotics in animal eed induces resistanceto antibiotics in humans, but can’t be sure what theprobabilities are that any particular antibiotic willbecome useless over the next 10 years.

Still worse, as Knight’s successors such as PoulHarremoes and colleagues have pointed out, p aresituations o ignorance . Here you don’t even knowall the things that might go wrong, much less theprobability o their causing harm. For example, be ore1974 no one knew that CFCs could cause ozonelayer damage. Obviously, this ignorance would have

invalidated any attempt, at the time, to calculate o the probability o ozone depletion. q Similarly, be ore2000, it was not known that the albedo o trees couldchange a orest’s e ect on global warming; r be ore2005, how much carbon recently sequestered by landplants is being moved by the Amazon to the oceansand the atmosphere; s and be ore the 1990s, thatcertain actors including release o methane romocean oors or the switching o o the Gul Streamwere capable o “ ipping” the earth’s climate rapidly

rom one state to the other.

In situations o indeterminacy, fnally, the probability o a result cannot be calculated because it is not a matter o prediction, but o decision. For example, it mightbe “implausible” or subsidies or ossil uel extractionto be removed within fve years, but you can’t assign anumerical probability to this result, because whether it happens or not depends on politics. In act, tryingto assign a probability to this outcome can itsel a ectthe likelihood o the outcome. In such contexts, theexercise o prediction can undermine itsel .

Problems posed by risk, uncertainty, ignorance andindeterminacy all call or di erent kinds o precau-tion.

Risk fts easily into economic thinking, because itcan be measured. For instance, as Knight pointed outin 1921, “the bursting o bottles does not introduce

an uncertainty or hazard into the business o produc-ing champagne”:

“[S]ince in the operations o any producer a practicallyconstant and known proportion o the bottles burst,it does not especially matter even whether theproportion is large or small. The loss becomes a fxedcost in the industry and is passed on to the consumer,like the outlays or labor or materials or any other.. . . This, o course, is the principle o insurance, as

amiliarly illustrated by the chance o fre loss.” t

Uncertainty, ignorance and indeterminacy, however,call or a more precautionary and exible, and lessnumerical, approach.

Take the carbon credits to be generated by treeplantations. I these credits were threatened bynothing more than risk, insurance-type calculatingtechniques would be enough to handle the problem.

You could insure carbon credits rom a plantation just as you take out fre insurance or a building.

But such credits are threatened not only by risk, butby uncertainty, ignorance, and indeterminacy as well.

For example:

• How long will plantations last be ore they releasethe carbon they have stored to the atmosphere



again, through being burned down or cut down tomake paper or lumber, which themselves ultimatelydecay? This is not simply a risk, in Knight’s sense,but involves uncertainties and ignorance that can’tbe captured in numbers. For example, it is stillnot known what precise e ects di erent degreeso global warming will have on the cycling o carbon between di erent kinds o trees and theatmosphere.

• How will plantations a ect the carbon productionassociated with neighbouring ecosystems,communities, and trade patterns? Again, uncertaintyand ignorance, not just risk, stands in the way o answering such questions.

• How many credits should be subtracted rom thetotal generated by plantations to account or theactivities that they displace that are more benefcial

or the atmosphere in the long term, or example,investment in energy e ciency or ecological

arming? No single number can be given in answer to this question, since “it is inherently impossible toveri y what would have happened in the absence o the project”. u That is, the answer is indeterminate.

By mixing up “the analytically distinct concepts” v o risk, uncertainty, ignorance and indeterminacy,schemes such as the Clean Development Mechanismand Joint Implementation have blundered into what

Knight called a “ atal ambiguity”.w

In this case, it isan ambiguity that undermines the e ectiveness o the entire Kyoto Protocol and one that can only beremedied by the suspension o such projects.

(Endnotes)a Axel P. Gosseries, “The Legal Architecture o Joint

Implementation: What Do We Learn rom the PilotPhase?” New York University Environmental Law Journal 7, 1999, pp. 99-100.

b Michael Dutschke and Axel Michaelowa, “Joint Im-

plementation as a Development Policy – The Case o Costa Rica”, HWWA Discussion Paper No. 49, 1997.

c M. Al aro, M. Hidalgo and A. Méndez, “Evaluación delSector Forestal de Costa Rica para la Mitigación delCambio Climático en el Marco del MDL: In orme Fi-nal”, Proyecto Bosques y Cambio Climático en Amé-rica Central, Organización de las Naciones Unidaspara la Agricultura y la Alimentación (FAO), ComisiónCentroamericana de Ambiente y Desarrollo (CCAD),San José, Costa Rica, 2003.

d Friends o the Earth International in cooperation withWorld Rain orest Movement, FERN and The Futurein Our Hands, Tree Trouble , Asuncion, 2000.

e “The Marrakesh Accords and the Marrakesh Reso-lution”, www.un ccc.int/cop7/documents/accords_ dra t.pd .

Al aro et al., op. cit.g Ibid..h In act, at present most o the timber consumed by the

country comes rom wooded grasslands. For example,in the year 2001 alone, approximately 260,000 cubicmetres o timber were legally extracted rom some170,000 hectares o wooded grasslands (three per cento the national territory) ( Estado de la Nación, San Jose,2003).

i Harremoes, P., Gee, D. et al., The Precautionary Principle in the 20th Century: Late Lessons rom Early Warnings, Ear-thscan, London, 2002.

j See, or example, Stain orth, D.A., Aina, T., Christen-sen, C. et al. (2005) “Uncertainty in Predictions o theClimate Response to Rising Levels o GreenhouseGases”, Nature 433, 27 January, pp.403-07; Knorr, W.,Prentice, I. C., House, J. I. and Holland, E. A. (2005)“Long-Term Sensitivity o Soil Carbon Turnover toWarming”, Nature 433, 20 January, pp.298–302; Read,D. et al. (2001) The Role o Land Carbon Sinks in Mitiga-ting Global Climate Change (London: The Royal Socie-ty); Gill, R.A., Polley, H.W., Johnson, H. B., Anderson,L. J., Maherall, H., and Jackson, R. B., Nonlinear Gras-sland Responses to Past and Future Atmospheric CO 2,Nature 417, 16 May, pp.279-283; Canadell, J. G., Ciais,

P., Cox, P. and Heimann, M. (2004) Quanti ying, Un-derstanding and Managing the Carbon Cycle in theNext Decades, Climatic Change , 67 (2-3) pp.147-160;Houghton, R.A. (2001) Counting Terrestrial Sourcesand Sinks o Carbon, Climatic Change , 48, pp.525-534;Pan, Y., Luo, T, Birdsey, R, Hom, J and Melillo, J. (2004)New Estimates o Carbon Storage and Sequestrationin China’s Forests: E ects o Age-Class and Method onInventory-Based Carbon Estimation, Climatic Change 67 (2-3), pp.211-236; Schelhaas, M. J., Nabuurs, G. J.,

Jans, W. et al. (2004) Closing the Carbon Budget o aScots Pine Forest in The Netherlands, Climatic Change 67 (2-3), pp.309-328.

k “Fire Planet: The Politics and Culture o Combus-

tion”, Corner House Briefng, Sturminster Newton,UK, 1999, www.thecornerhouse.org.uk.

l Lovbrand, E., ‘Bridging Political Expectations andScientifc Limitations in Climate Risk Management



– On the Uncertain E ects o International CarbonSink Policies’, Climatic Change 67, 2004, 449-460, p.452.

m Pedroni, L. Y Locatelli, B. 2002. Contabilidad de crédi-tos para carbono orestal: métodos e implicaciones.Análisis de Opciones del Mecanismo para un De-

sarrollo Limpio. Submitted at: MINAE-OCIC Work-shop, January 2002.

n Gregg Marland, Kirsty Fruit and Roger Sedjo, “Ac-counting or Sequestered Carbon: The Question o Permanence”, Environmental Science and Policy4, 2001,259-268; Michael Dutschke, “Fractions o Permanence

– Squaring the Cycle o Sink Carbon Accounting”,Mitigation and Adaptation Strategies or Global Change 7,381-402, 2002.

o See http://www.rain orestcredits.org.p Harremoes, P., Gee, D. MacGarvin, M. et al., The Pre-

cautionary Principle in the 20th Century: Late Lessons romEarly Warnings. London: Earthscan and European Envi-ronment Agency.

q Op cit., p. 217.r Betts, R.A. (2000) ‘O set o the Potential Carbon Sink

rom Boreal Forestation by Decreases in Sur ace Albe-do’, Nature 408, 9 November, 187-90.

s Mayorga, E. et al, “Young Organic Matter as a Sourceo Carbon Dioxide Outgassing rom Amazonian Ri-vers”, Nature 436, 538-41 (2005).

t Frank H. Knight, Risk, Uncertainty and Pro t , Houg-hton Mi in, Boston, 1921, Part III, Chapter VII.

u Environmental Data Services, ENDS Report 328, May2002.

v Harremoes, op.cit., p. 216.w Knight, op. cit., Part III, Chapter VI.



6 India: A Taste o the Future

I countries in Latin America pioneered carbon

projects, one o the countries that has attracted thegreatest longer-term interest among Northern car-bon traders and investors is India.

The interest is reciprocated by many in India’s gov-ernment. Three o the frst dozen or so CDM proj-ects to be registered – an HFC-23 a destruction proj-ect, a small hydropower project, and a biomass proj-ect – are located in India. The country is currently issecond only to Brazil in volume o CDM credits inthe pipeline, although China, Mexico, Argentina andChile are also prominent. b

As elsewhere, most o the money would go to end-o -pipe projects that destroy non-carbon-dioxidegreenhouse gases. According to the Delhi-basedCentre or Science and Environment, some 77 per cent o Indian CDM credits currently in the pipelinewould be derived rom projects which destroy HFCs,which are extremely power ul greenhouse gases usedin re rigeration, air conditioning, and industrial pro-cesses.c Inevitably, social activists are raising questionsabout whether such projects provide “any crediblesustainable development” to local communities. d

Why shouldn’t such projects be bene cial to local communities?

First, because HFCs are so bad or the climate, proj-ects that destroy them can generate huge numbers o lucrative credits merely by bolting a bit o extra ma-chinery onto an existing industrial plant. As a result,there are no knock-on social benefts other than pro-viding income or the machinery manu acturer andsome experience or a ew technicians. Second, suchprojects don’t help society become less dependenton ossil uels. They don’t advance renewable energysources, and they don’t help societies organize them-selves in ways that require less coal, oil or gas. Third,by ensuring that the market or credits rom carbonprojects is dominated by large industrial frms, theymake it that much more di cult or renewable en-ergy or e ciency projects to get a oothold.

Don’t such projects also provide perverse incentives or governments not to do anything about pollution except through the carbon market? A ter all, i I were a govern-ment trying to help the industries in my country get masses o carbon credits rom destroying a little bit o HFCs, I would hesitate to pass laws to clean up HFCs.

A ter all, such laws wouldn’t make industry any money.In act, they would cost industry money. Instead, whynot just allow the pollution to go on until someone comes along o ering money i it is c leaned up?e

That’s a question that’s understandably going throughthe minds o government o cials in many Southerncountries. As a result, it’s not clear whether the CDMmarket is actually a orce or less pollution or not.

But at least such projects don’t do any harm to local people, right?

That’s a matter o opinion. I the industry getting thecredits is hurting local people, local people may welldisagree with the project. Near Gujarat Flourochemi-cals Limited, one o India’s frst projects to be regis-tered with the CDM, villagers complain o air pollu-tion’s e ects on their crops, especially during the rainy

season, and believe the plant’s “solar oxidation pond”adds to local water pollution. O course, theirs are notthe only voices. D. K. Sachdeva, a vice president o thecompany, insists locals’ claims were politically moti-vated. “As we are the only actory in this area, peoplemake allegations to make money,” he asserted.

Meanwhile, villagers near another actory hop-ing to beneft rom CDM credits, Rajasthan’s SRFFlourochemicals, believe that their aqui ers are be-ing depleted and their groundwater polluted, leadingto allergies, rashes, crop ailures, and a lack o sa edrinking water.

What about smaller projects – the ones that don’t generate so many credits? Are there any local objectionsto them?

Some o the many biomass carbon projects plannedor India are also rousing local concerns. One exam-

ple is the 20-megawatt RK Powergen Private Limit-ed generating plant at Hiriyur in Chitradurga districto Karnataka, which is currently preparing a ProjectDesign Document or application to the CDM. Ac-cording to M. Tepaswami, a 65-year-old resident o nearby Babboor village, RK Powergen is responsible

or ser ious de orestation. “First, the plant cut the treeso our area and now they are destroying the orestso Chikmangalur, Shimoga, Mysore and other places.They pay Rs 550 per tonne o wood, which theysource using contractors. The contractors, in turn,source wood rom all over the state.” Another vil-lager claimed that “poor people fnd it di cult to getwood or cooking and other purposes.” Jobs prom-ised by the frm, Tepaswami complains, were in theend given to outsiders. Employees at the KarnatakaPower Transmission Corporation meanwhile claim

that its “equipment is adversely a ected due to theactory’s pollution”, while local villagers complain o reduced crop yields and plunging groundwater lev-els.



Again, predictably, project managers deny theallegations. “I there is de orestation,” said plantmanager Amit Gupta, “then local people are to beblamed because they are supplying the wood to us.” g But such disputes may be a sign o things to come.

What about plantation projects and other orestry“sink” projects? Are they also running into trouble?

Currently, no legal ramework to deal with CDMcarbon orestry exists, so proposals or such projectsare on hold. But carbon orestry is defnitely on thecards or India. The World Bank and orestry andprivate sector interests are studying, experimentingwith and promoting a number o ideas. A NationalEnvironment Policy Dra t circulated by the Ministryo Environment and Forests (MoEF) in 2004 confrmsa new, “liberalized” environmental policy thatpromotes carbon trading and other environmentalservices trades. The move toward carbon orestry alsochimes with a grandiose existing plan on the part o the MoEF to bring, by 2020, 30 million hectares o “degraded” orest and other lands under industrialtree and cash crop plantations, in collaboration withthe private sector.

Village in the Handia range.

Among the scores o CDM projects being con-templated or India are orestry projects in MadhyaPradesh and Andhra Pradesh states. Here, an organiza-tion called Community Forestry International (CFI)has been surveying opportunities or using trees tosoak up carbon. CFI helps “policy makers, develop-ment agencies, NGOs, and pro essional oresters cre-ate the legal instruments, human resource capacities,and negotiation processes and methods to supportresident resource managers” in stabilizing and regen-erating orests.h Its work in Madhya Pradesh has beensupported by the US Agency or International De-velopment and the US Department o Agriculture’s

Forest Service. CFI’s work in Andhra Pradesh, mean-while, has been fnanced by the Climate Change andEnergy Division o Canada’s Department o ForeignA airs and International Trade.

CFI suggests that, in India, the CDM would be a viableincome-generating activity or rural indigenous com-munities. But there are strong reasons to doubt this.

Why?

In India, as everywhere else, it’s not abstract theory,but rather the institutional structure into whichCDM would ft, that provides the key clues bothto its likely social outcome and to its likely climaticoutcome.

Take, or example, a CDM scheme investigated byCFI that would be sited in Harda district, MadhyaPradesh state. Here CFI sees CDM’s role as providingfnancial support or an institution called Joint ForestManagement (JFM).

What’s that?

Joint Forest Management (JFM) is supposed to pro-vide a system or orest protection and sustainable usethrough the establishment o Village Forest Protec-tion Committees (VFPCs), through which govern-ment and development aid unds are channelled or ‘ orest management’ and village-level developmentworks. Formalised by state governments and largely

unded by the World Bank, Joint Forest Management(JFM) was designed partly to ensure that orest-de-pendent people gain some beneft rom protecting

the orests. It’s already implemented in every regiono India. Long be ore carbon trading was ever con-ceived o , JFM had become an institution used andcontested by village elites, NGOs, oresters, state o -fcials, environmentalists and development agenciesalike in various attempts to trans orm commercialand conservation spaces and structures o orest rights

or their respective advantages. i

So there should be a lot o evidence already or whether it works or not.

Yes, but there’s not much agreement about what thatevidence means, or or whom JFM works and inwhat way. CFI sees the JFM programme as havingimproved the standard o living in Adivasi villages, aswell as their relationship with the Forest Department.It also ound that JFM had helped regenerate orestsin Rahetgaon Forest Range, resulting in higher income or Village Forest Protection Committees,although admitting that in Handia Forest Range,social con icts had resulted in decreased JFM-relatedinvestment by the Forest Department and less positiveoutcomes. CFI thinks that or JFM to expand its roleon India’s orest land would be “both desirable and

necessary”. j

On the other hand, many indigenous (or Adivasi)community members, activists and NGOs see



JFM as a system which urther entrenches ForestDepartment control over Adivasi lands and orestmanagement, although the practices o di erentvillage committees vary. k Mass Tribal Organisations,

orest-related NGOs and academics have publishedevidence that JFM Village Forest ProtectionCommittees (VFPCs), composed o communitymembers, unction principally as a local, village-level branch and extensions o state orest authority.l Communities interviewed in Harda in 2004 saidthat VFPC chairmen and committee members havebecome to a large extent “the Forest Department’smen”.

What’s wrong with that?

These local JFM bodies are accused o imposing unjust and unwanted policies on their own communi-ties, o undermining traditional management systemsand o marginalising traditional and ormal sel -gov-erning local village authorities. m In one MadhyaPradesh case, orest authorities and the police shotdead villagers opposing JFM and VFPC policies, inan echo o hostilities between the Forest Departmentand various classes o other orest users that go backa century (see BOX: Who Is Encroaching? ForestPeoples and the Law).

According to many Mass Tribal Organisations,communities and activists, JFM was e ectively imposed

on them without appropriate consultation duringproject identifcation, planning and implementation,and has resulted in the marginalisation, displacementand violation o the customary and traditional r ightso the Adivasis in the state. n Contrary to MoEFcirculars issued in the 1990s regarding regularisationo lands cultivated by Adivasis and settlement o land disputes, many state governments implemented

JFM programmes on disputed lands. JFM has beenimplicated in involuntary resettlement o orest“encroachers”, resulting in many Adivasis losing landand access to essential orest goods.

Who Is Encroaching? Forest Peoples and the Law

Milestones in the state’s e orts to appropriate landrom orest-dependent communities in India include

the Indian Forest Act o 1878 and the 1980 ForestConservation Act, which theoretically provided thecentral government with ultimate control over most

orest land. In 2002, quoting a Supreme Court ruling,the Ministry o Environment and Forests issued acircular to all state/union territory governments toevict all “encroachers” rom orest land, according tothe defnitions, procedure and authority claimed by

the state under the Forest Conservation Act. BetweenMarch 2002 and March 2004, it is estimated that“encroachers” were evicted rom 152,000 hectareso orest land in India, despite neither the SupremeCourt nor the MoEF having clarifed whether the term included peoples carrying out illegal,commercial logging activities, or Adivasi peoples, or both. In 2002, an estimated 10 million Adivasi people

aced the threat o eviction. On 23 December 2004,the MoEF issued a urther circular con essing thatdue to the lack o defnition o “encroacher”, manyAdivasi people had been unjustly evicted rom their lands.

Following heightened protest by Adivasis and supportorganisations in late 2004, the Central Governmentagreed in early 2005 to introduce the Scheduled Tribesand Forest Dwellers (Recognition o Forests Rights) Bill be ore Parliament. The Bill would provide Adivasicommunities with legal recognition o their orestrights in areas o traditional occupation and use. Thelaw would help regularize lands being cultivated byAdivasis, convert so-called orest villages o to revenuevillages (with title deeds), and settle disputed landclaims. But Adivasi and support organisations stillhave to fght to prevent the Bill being diluted be oreit is passed by Parliament.

Current problems with JFM in Madhya Pradesh,

according to many local people and activists,include:• Con icts within communities as a result o

economic disparities between VFPC members andnon-members.

• Con icts between Adivasi groups and other communities generated by the imposition o VFPCboundaries without re erence to customary villageboundaries.

• Curtailment o nistar rights (customary rights tolocal natural goods).

• Con icts over bans on grazing in the orest and oncollecting timber or individual household use.

• Indiscriminate fning.

According to some Harda activists, JFM has openeddeeper ri ts within and between Adivasi villages andbetween di erent Adivasi groups, and has engenderedcon ict between communities and the ForestDepartment. Although unding or the local JFMscheme is now exhausted, VFPCs are still in placein many villages, recouping salaries rom the interestremaining in their JFM accounts and rom fnesimposed on members o their own and neighbouringcommunities. Communities interviewed also claim

that VFPC fnancial dealings are not transparent. In July 2004, non-VFPC villagers in Harda reported thatthey would like to see unding or VFPCs stoppedand, ultimately, the committees disbanded; and



would also like to see orest management returnedto them and their rights to their traditional lands andresources restored. p

Village in the Handia range.

That’s not to say there are not other stories about JFM and the orest protection committees, which areinstitutions whose meaning and unctions are com-peted over among many con icting groups insideand outside villages. It is merely to emphasize that,in the words o anthropologist K. Sivaramarkishnan,“when environmental protection is to be accom-plished through the exclusion o certain people romthe use o a resource, it will ollow existing patternso power and stratifcation in society.” q

So maybe these embattled Village Forest ProtectionCommittees are not the ideal bodies to carry out CDM carbon projects.

That would be an understatement. CFI’s proposalthat, in order to reduce transaction costs, a ederationo VFPCs ought to be created in the Handia rangeto carry out a pilot carbon o set project is alsoquestionable. Equally dubious is CFI’s suggestionthat the Forest Department should adjudicate caseso con ict there, a statement that many people in thecommunities interviewed would fnd unacceptable.

I there are all these problems, why didn’t the CFI

studies detect them?

Much o the data used in the CFI studies came romthe Forest Department and possibly discussions with

VFPC members rather than rom independent feldwork with communities and non-VFPC communitymembers. Signifcantly, both MoEF and the MadyaPradesh orest department were supporting agencies

or the CFI study.

But it seems there could be an even more undamental problem. I JFM projects are going orward anyway, evenwithout the CDM, they’re not saving carbon over and above what would have been saved anyway. So how could they generate credits?

That’s not clear. JFM has been implemented inMadhya Pradesh since 1991 and so hardly qualifesas a new project.

But there are plenty o other problems with CFI’scarbon sequestration claims as well. For example, CFIdoesn’t take into account the changes in numbers o people and in community and amily compositionto be expected over the project’s 20-25 year li etime.CFI’s estimates o uelwood carried out by commu-nities in the Rahetgaon range are also inaccurate.CFI believes every amily uses two head loads o u-elwood per week, but recent interviewees suggestedthat a more realistic fgure would be 18-22, especiallyduring the winter and the monsoon season. CFI alsomakes the questionable assumption that local com-munities would relinquish their orest-harvesting ac-tivities or the sake o very little monetary income

rom carbon sales, and that income owing to VFPCswould be transparently distributed.

In order to assess how much carbon would be saved,CFI compared vegetation in orest plots at di er-ent stages o growth and subject to di erent kindso pressure rom humans. Yet while the total area o

orest to be considered is 142,535 ha, the total num-ber o 50m x 50m plots assessed was 39, representinga total study area o only 9.75 ha. That may be anadequate sample in biological terms. But it’s hardlyenough to assess the range o social in uences oncarbon storage in di erent places.

Will Carbon Forestry Exclude People rom Their Land? Some Cautionary Voices

“Joint Forest Management and Community ForestManagement are being used as tools to excludethe Adivasis rom their survival sources, and arecompelling them to slip into poverty and migrate

in search o work. Instead o . . . recognising Adivasirights to the orest, the government is seeking their eviction through all possible means.”

Local activist



“Government fgures show that there are about5 crores (50 million) hectares o ‘waste land’ inIndia, land which . . . now lies open to exploitationthrough carbon orestry schemes. What the centralgovernment does not say is that most o this ‘wasteland’ belongs to Adivasis and other orest dependentcommunities, who will be the frst to lose out romthe development o such schemes.”

Madhya Pradesh activist

“I large protected areas or plantations are managedor long-term carbon sequestration and storage, local

people may lose access to other products such asfbre or ood. . . . governments and companies arebest placed to beneft rom such schemes. . . . the

requently weak organization (or high transactioncosts o improving organization) o the rural poor and landless will reduce their access to the carbono set market, particularly given the many complexrequirements o carbon o set interventions. Other barriers to the involvement o rural people centreon their prevailing small-scale and complex land usepractices, without clear tenure systems.” r

Stephen Bass

Have any prospective carbon orestry projects beenlooked at in other parts o India?

Many. To take just one more nearby example, in

Adilabad, Andhra Pradesh state, CFI saw possibilitieso sequestering carbon by re oresting and a orestingnon orest or “degraded” orest lands whose carboncontent has been depleted by a large and growinghuman and cattle population, uncontrolled grazing o cattle in orests and ‘encroachment’ on and conversiono orest lands or podu (swidden) cultivation.

The best option, CFI elt, would be to regenerateteak and mixed deciduous orests. Clonal eucalyptusplantations would, it thought, accumulate carbon

aster, and would have other commercial uses such as

timber and pulp, as well as incremental returns or anyinterested investor, but would cost more to establishand maintain, and would be sure to be condemnedby Adivasi communities and activists as a new ormo colonialism.s

So who would carry out these regeneration projects?

Here CFI came to a di erent conclusion than inMadhya Pradesh. In Andhra Pradesh, it decided, thebest agencies or taking on orest regeneration wouldbe Women’s Sel -Help Groups (SHGs).

Which are what?

SHGs were set up by the state-level Inter-Tribal

Development Agency during the 1990s as a mechanismor improving the fnances o households through

micro-credit schemes and capacity-building, as wellas linking households with fnancial institutions andgovernment authorities. CFI says that they’re muchmore dynamic, accountable and transparent thanother local institutions, such as Forest ProtectionCommittees (known as Vana Samrakshana Samithior VSS in Andhra Pradesh), which are viewed asine cient, untransparent, untrustworthy, and troubledin their relationship with the Forest Department.

Sounds per ect.

Except that it’s hard to see how the virtues o theWomen’s Sel -Help Groups could work or thecarbon economy. For one thing, CFI states that onlyi the SHGs come together in a ederation wouldcarbon o set orestry projects be fnancially viable,given the high transaction costs involved in preparingand carrying them out. Yet it does not explainhow such a ederation could come about amongrural communities, nor how SHGs could becomeinvolved in CDM projects and link themselvesto the carbon market. Nor does it mention thatSHGs currently work in relative isolation rom thePanchayat Raj institutions (the ultimate village-level ormal sel -governing authority in rural India),the Forest Department and local Forest ProtectionCommittees.

Fieldwork on the likely consequences o carbon orestry inIndia was undertaken by Emily Caruso (right) o the For-est Peoples Programme in collaboration with Vijaya Bhas-kara Reddy (le t), Yakshi Shramik, Adivasi Sangathan and local activists in July 2004.

In addition, the income amilies would receive romcarbon – 150 rupees per month or protecting 1.5 hao orest, according to CFI – is less than they get romother orms o orest use. While CFI estimates thetotal cost o a 2000-hectare CDM project covering20 villages in Adilabad as US$270,000, it is di cult toimagine how such small areas o orest regenerationcould provide enough carbon to provide reasonable



and usable benefts to the communities. Moreover,ew Adivasi communities have exclusive r ights to the

extensive area o 250 ha o “degraded” land envisagedby CFI. I instituted near Adivasi communities,CDM projects would likely eat up land elsewhere,including Forest Department land. And i podu lands are excluded rom CDM use, the potential or re orestation would be reduced to 10 per cent o thetotal orest area.

Well, assuming there are some problems with these preliminary ideas about how carbon projects might be implemented in the Indian countryside, surely there’snothing to worry about yet. A ter all, these are only a

ew studies done by a single organization. We’ll have tolearn as we go along.

The problem is that the mere act that studies likeCFI’s are being carried out already gives legitimacy tothe idea o using carbon o sets in the South, as well asother ‘ exible mechanisms’, to tackle climate change.

Nor are CFI’s studies the only ones claiming that Joint Forest Management provides a sound basis

or carbon orestry projects. International researchinstitutions such as the Centre or InternationalForestry, the Consultative Group on InternationalAgricultural Research and various academics havedone the same. The World Bank, too, unds JFM, isheavily involved in the global carbon market, and

is currently seeking to increase unding o orestryprojects in India – not a reassuring sign.

Still, what you’ve been talking about are problems with JFM, not with carbon o set trading as such.

Whether or not JFM is involved, some Indian activistsear that by creating a market or carbon, CDM

projects will engender change in the relationshipbetween Adivasis and their lands and orests. Accessand ownership rights are likely to be trans ormed intobeneft-sharing and stakeholder-type relationships.Adivasi communities may lose their capacity tosustain ood security, livelihoods, and undamentalsocial, cultural and spiritual ties.

Long be ore JFM came along, Indian governmentagencies, Indian government agencies werere erring to much o the livelihood land base o many indigenous and orest-dependent peoples asunowned or unused “wasteland” or “degraded land”.They still do. International fnancial institutions,northern governments and even internationalresearch institutions use similar language in their documents. In Andhra Pradesh, the state government,

currently promoting Pongamia plantations, proposesestablishing up to three million hectares o newplantations on so-called “common land” (or “wasteland”) throughout the state.

CDM a orestation projects can be established onlands that have not been orested or 50 years, andre orestation projects on lands that have not been

orested or 15 years. Such projects could have seriousconsequences or Adivasi peoples practicing swiddencultivation on government orest land or in “ orestvillages”. CDM projects would also have an incentiveto seek repression o any Adivasi livelihood activitiesthat they displace that could result in increased releaseso carbon elsewhere, since such releases would haveto be debited rom project carbon accounts. Cattlegrazing, uelwood cutting and clearing o newareas or swidden cultivation could all all into thiscategory.

Also, while CDM plantations are one cause o concern among indigenous communities, orestconservation projects are also on the horizon.Although conservation schemes are not yet eligible

or CDM, conservation fnanciers and the WorldBank and Global Environment Fund are increasinglypromoting the idea o protected areas as an additionalsource o carbon credits. t Indigenous peoples willclearly be in or a fght should carbon sequestrationand protected area projects come together on their territories.

In order to avoid con ict, in addition, any CDMproject proponent will need to clari y who owns theland, the project and the carbon. u This immediately

militates against Adivasi peoples, since in India, thegovernment claims ormal ownership and controlover indigenous lands and resources. In this andother ways, it is unclear how CDM projects could doanything but urther entrench discrimination againstAdivasi communities by government authorities andrural elites.

But isn’t it true that in international law and best practice, indigenous land and resource rights must be respected in all development projects? Isn’t ree,

prior and in ormed consent starting to be a universal requirement or such schemes?

That’s the theory. The reality is di erent. CDM hasso ar shown no sign o doing anything but goingalong with prevailing practice.

No Need to Know?The Secret Economy o Carbon

In 2004, the women’s sel -help group o Powergudavillage in Adilabad district o Andhra Pradesh, Indiawas given cash in exchange or the plantation o Pongamia trees. The tree’s seeds can be used to makea petrol substitute.



The women were given a certifcate and US$645 asa token o ‘o setting’ the emissions produced by aWorld Bank workshop on climate change held inWashington, DC. v The Bank claims that 30 years o bio uel use by government authorities in AndhraPradesh will compensate climatically or the carbonemissions associated with the workshop.

The women were unaware o the reason they hadreceived the money. They were also unaware o thevarious benefts to be accrued by the carbon traders,releasers and agencies involved, and o how their activities related to climate change.

Adivasi villages in Andhra Pradesh visited in 2004were also unaware that a study had been carried outon their possible participation in a global carboneconomy. Adivasi communities tend to be unawareo the climate change debate, o what carbon tradingmeans, and o the signifcance carbon projects wouldhave or their livelihoods.

The irony is that northern Andhra Pradesh hasrecently been hit by one o the most devastatingdroughts ever, very possibly as a result o globalwarming. In the summer o 2004, the province’snumber o suicides o armers driven to desperationby their crippling debts reached 3,000.

The lack o discussion with a ected parties seen in

Andhra Pradesh appears to be a common denominator o carbon-saving projects nearly everywhere:

• In Uganda, community members living close to theUWA-FACE carbon plantation project near MountElgon (see main text) said in interviews that thatthey knew nothing about the project’s production o carbon credits to be sold on an international market,only that the UWA has received grants. This igno-rance extends to diploma or degree holding mem-bers o the Bubita sub-county local council andeven top distr ict administration o cials. Residentswanted to know more about the fnancial beneftsFACE Foundation receives, particularly because theproject encumbers their land or a long time, andplanned to take this matter with their local member o parliament. An English-language brochure on theproject mentions the carbon sequestering role thatplantations will play, but remains silent on the mon-ey FACE Foundation and others will make rom thesequestered carbon. The project coordinator and theUWA warden responsible or FACE activities bothre used to provide this in ormation when asked di-rectly.

• The Ugandan acting deputy commissioner or or-

estry in the Ministry o Water, Lands and Environ-ment, Ignatius Oluka-Akileng, told an interviewer in 2001 that his orestry directorate knew little or nothing about the carbon trade involving state or-

est lands, nor how much oreign companies wereto gain rom it, and begged the interviewer, romthe Norwegian NGO, NorWatch, to help providethe in ormation.

• In Thailand, most residents o the community adjacent to the site o a proposed biomass-burningpower project in Yala province (see main text) wereunaware in 2003 that it had been seeking carbonfnance or years. As o January o that year, eventhe local Subdistrict Administrative Authority had

yet to receive an environmental impact assessmentor other documentation rom the frms involved.

• In South A rica, public consultation on the proposalor the Prototype Carbon Fund’s Bisasar Road proj-

ect to extract and burn methane rom a landfll sitewas conducted through the internet, to which only asmall minority o the local community have access.

• The owner o Kalpataru Power Transmission Ltd.in Rajasthan, which plans to sell the Netherlandsgovernment a total o 313,743 CDM carbon creditsover 7-10 years, re used to allow the Indian maga-zine Down To Earth access to the project site.

• The Project Design Documents o our di erentIndian biomass power projects each repeated, word

or word, alleged avourable comments made by avillage head. All o the projects – Rithwick, Per-petual, Indur and Sri Balaji are located in AndhraPradesh state, but all have di erent characteristicsand are spread over hundreds o kilometres. Evenspelling mistakes were repeated in the documents,

suggesting that consultation was not genuine. Theprivate consultants who prepared the documents,PricewaterhouseCoopers and Ernst&Young, re-sponded lamely that identical projects in similar geographical locations were likely to have similar Project Design Documents. Ernst & Young Na-tional Director Sunil Chandiramani told an Indiannewspaper, the Business Standard, that the answerswere in accordance with a fxed set o questionsand in a “similar environment, it is unlikely thatresponses will be drastically di erent”. w

• Stakeholder comments section o the Project De-sign Documents prepared by PriceWaterhouseC-oopers or the HFC-23 reduction projects devel-oped by Gujurat Fluorochemicals and SRF (seemain text) are summarized in exactly the samewording, although arranged di erently on thepage. The authors claim to have consulted withdi erent villages, but their summarized responsesare identical. x



(Endnotes)a HFC-23 is a greenhouse gas used in re rigeration

and industrial processes. It is thousands o timesmore power ul in its climatic e ects than carbondioxide.

b UNEP Risoe Centre, Denmark, www.cd4cdm.org/Publications/CDMpipeline.pd .

c Ritu Gupta, Shams Kazi and Julian Cheatle,“Carbon Rush”, Down to Earth , Centre or Scienceand Environment, 15 November 2005.

d Ibid.e Ibid.

Ibid.g Ibid.h See http://www.community orestryinternational.

org.i K. Sivaramakrishnan, “‘Modern Forestry: Trees and

Development Spaces in West Bengal”, in LauraRival, (ed.). The Social Li e o Trees: Anthropological Perspectives on Tree Symbolism. Ox ord: Berg, pp.273-96.

j Mark Po enberger, N. H. Ravindranath, D. N.Pandey et al., Communities and Climate Change:The Clean Development Mechanism and Village-based Forest Restoration in Central India, CommunityForestry International and Indian Institute o ForestManagement, Santa Barbara, 2001, p. 71, availableat http://www.community orestryinternational.org/publications/research_reports/harda_report_ with_maps.pd .

k See M. Sarin et al (2003). Devolution as a Threat to Democratic Decision-making in Forestry? Findings rom Three States in India.Overseas DevelopmentInstitute, ODI Working Paper no. 197 (availableat http://www.odi.org.uk ) and G. Brahmane, B.K. Panda, and Adivasi Mukti Sangathan Sendhwa,2000. The Adivasis and the World Bank-aided MadhyaPradesh Forestry Project: A Case Study o IndigenousExperience , discussion document prepared or the Workshop on Indigenous Peoples, Forestsand the World Bank: Policies and Practice, May9-10, Washington DC, available at http://www.

orestpeoples.org.l Op. cit., ootnote 20; See also, N. Kumar, “All is Not

Green with JFM in India” Forests, Trees and People No.42, June 2000, pp. 46-50 and A. Roychaudhury,“The Woods are Lovely . . .”, Down to Earth 3 (17),1995, pp. 25-30.

m Report o the Joint Mission on Madhya PradeshForestry Project , May 1999; Samata, Impact o JFM inNorth Coastal Andhra Pradesh – A People’s Perspective Samata and CRY-Net, Hyderbad, 2000; and M.Sarin, N. M. Singh, N. Sundar and R. K. Bhogal,Devolution as a Threat to Democratic Decision-making in Forestry? Findings rom Three States in India

(Orissa, Madhya Pradesh, Uttarakhand), OverseasDevelopment Institute Working Paper No. 197,ODI, London, 2003, pp. 33, 35, 49-50, 56, 57, 61.

n G. Brahmane, B. K. Panda and Adivasi MuktiSangathan Sendhwa, The Adivasis and the World Bank-aided Madhya Pradesh Forestry Project: a case study o indigenous experience , discussion documentprepared or the Workshop on Indigenous Peoples,Forests and the World Bank: Policies and Practice,Washington DC , May 9-10, 2000, available athttp:// www. orestpeoples.org.

o Inhabitants o so-called orest villages lack land titledeeds ( pattas) and are classifed as ‘encroaching’ onstate orest land.

p For urther in ormation on the current situationregarding JFM in Madhya Pradesh, see FPP andShramik Adivasi Sanghathan (2004) Village Forest Protection Committees in Madhya Pradesh: An Update and Critical Evaluation, available rom http://www.

orestpeoples.org.q K. Sivaramakrishnan, op. cit.r Stephen Bass et al., Rural livelihoods and carbon

management. Natural Resources Issues Paper 1,IIED, London, 2000, available at http://www.iied.org, p. 4-5.

s See or example C.K. Janu, “The South IndianAdivasi Experience in the Nagar Hole NationalPark and Muthanga Wildli e Sanctuary”,speech at the World Parks Congress, Durban,South A rica, 8-18 September 2003, availableat http://www. orestpeoples.org/Briefngs/Indigenous%20Rights/wpc_india_nagarahole_

eng.htm.t For example, Global Environment Fund, “Con-servation o Transboundary Biodiversity in theMinkébé-Odzala-Dja Inter-zone in Gabon, Con-go, and Cameroon: Project Brie ”, World Bank,Washington, 2004, available at http://www.ge on-line.org/projectDetails.c m?projID=1095.

u See Bass et al., op. cit.v This is an example o a non-CDM carbon trading

project. The project bypassed government and theCDM Executive Board and was implementedbetween two private entities, thus eschewing alllegal requirements or registration, monitoringand verifcation.

w Point Carbon, “Consulting Firms Deny Wrong-doing in Dra ting Indian PDDs”, 11 November 2005, available at http://www.pointcarbon.com.

x Ibid.



7 Sri Lanka: A “Clean Energy” Project that Was not So CleanToday’s smart business money is going into buyingcarbon credits rom projects that seem particularlymeaningless when it comes to addressing climatechange: projects to destroy industrial gases or landfllmethane and the like (see chapter 6). These are thecheapest credits and they can be obtained with theleast trouble.

But there do exist, a ter all, carbon projects that pro-mote energy e ciency or renewable energy tech-nologies. The Kyoto Protocol’s Clean DevelopmentMechanism has dozens o such schemes in its pipe-line, although they generate only a miniscule propor-tion o total credits. Some o these projects are evensmall and community-based.

So ar, however, such projects are merely a bit o expensive window-dressing or the big industrialprojects generating cheaper credits. In a competitivemarket, they appear to have little uture.

But are such projects always desirable even on their own terms? For example, are all renewable energyprojects good just because they can be described

with the word “renewable”?

I don’t understand. What could possibly be wrong with promoting renewable energy?

It’s not that renewable energy technologies are in-herently good or bad. It all depends on how theyare used.

Let’s take, or example, one o the world’s very frstattempts to “compensate or” or “o set” industrialcarbon-dioxide emissions — a rural solar electrifca-

tion programme in Sri Lanka.

The story begins in 1997, when the legislature o theUS state o Oregon created a task orce that later legally required all new power plants in the state too set all o their carbon dioxide emissions. Whencompanies put in bids or the contract to build anew 500-megawatt, natural-gas fred power stationin Klamath Falls, they there ore also had to presentplans or “compensating” or its CO2 emissions. Thewinner o the contract, PacifcCorp Power Market-ing, proposed a diversifed US$4.3 million dollar car-bon-o set port olio allocating $3.1 million to fnanceo -site carbon mitigation projects. In particular, thefrm put US$500,000 into a revolving und to buyphotovoltaic (solar-home) systems and install themin “remote households without electricity in India,

China and Sri Lanka”. a In 1999, PacifcCorp Power and the City o Klamath Falls signed the necessaryfnance agreement with a US solar-energy companycalled the Solar Electric Light Company, or SELCO.b

In all, SELCO agreed to install 182,000 solar-homesystems in these three Asian countries, 120,000 inSri Lanka alone. c The idea was that the solar systemswould reduce the carbon dioxide emissions giveno by the kerosene lamps commonly used in house-holds that are “o -grid”, or without gr id-connectedelectricity. On average, SELCO calculated, each suchhousehold generates 0.3 tons o carbon dioxide per

year. d SELCO argued that the installation o a 20or 35-watt solar-home system would displace threesmoky kerosene lamps and a 50-watt system woulddisplace our. Over the next thirty years, it claimedthat these systems would prevent the release o 1.34million tons o carbon into the atmosphere, enti-tling the Klamath Falls power plant to emit the sameamount.

So what’s the problem? It sounds like a win-win situ-

ation. The Klamath Falls plant makes itsel “carbon-neutral”, while deprived Asian households get a new,clean, green, small-scale source o energy or lighting!

Not quite. Aside rom the act that such projectscan’t, in act, veri y that they make ossil uel burn-ing “carbon-neutral” (see above), the benefts to theSouth that carbon o setting promises don’t neces-sarily materialize, either.

Why not?

The frst thing to remember is that just as industriesin the North have historically relied on the environ-mental subsidy that cheap mineral extraction in theSouth has provided, in this project a Northern in-dustry used decentralized solar technology to reorder o -grid spaces in the South into spaces o economicopportunity that subsidize their costs o productionthrough carbon dioxide o setting. e Essentially, onceagain, the South is subsidizing production in theNorth – but this time not through a process o ex-traction, but through a process o sequestration.

You’ll have to explain that to me.

Traditionally, ossil uel extraction has resulted in theoveruse o a good which cannot be seen – the globalcarbon sink. And the inequality in the use o that sink



between North and South has been invisible. Now,however, that inequality is becoming more visiblewithin certain landscapes in the orm o physical andsocial changes like those associated with the Pacifc-Corp/SELCO project.

The solar component o the Klamath Falls plant, inessence, proposed to “mine” carbon credits rom o -grid areas in Sri Lanka. However, the existence o these o -grid areas is par tially due to social inequali-ties within Sri Lanka. In this case, the project was tak-ing advantage o one particularly marginalized com-munity o Sri Lankan workers in order to support itsown disproportionate use o ossil uels.

Well, maybe. But so what? Paci cCorp didn’t create the inequalities in resource use that it was going to bene t

rom. Why should it be up to Paci cCorp to solve social problems in Sri Lanka? Besides, aren’t we in danger o making the best the enemy o the good here? Paci c-Corp may have wanted to use this project to go onusing a lot o ossil uels, but at least the Sri Lankanworkers got a little something out o the deal to improve their li estyles.

Well, as a matter o act, that really wasn’t the case,either. In practice, the PacifcCorp/SELCO arrange-ment in Sri Lanka wound up supporting what oneSri Lankan scholar-activist, Paul Casperz, calls a eu-dal system o “semi-slavery” on plantations.

Semi-slavery? Come on! Aren’t you being a bit infam-matory? How could decentralized, sustainable solar

power possibly have anything to do with that?

Solar power didn’t create the problem, o course. Butinterventions like like this one in the estate sector o ten have a way o helping perpetuate them, just asin Los Angeles, trading entrenched existing environ-mental injustices. The trick, as so o ten in the world o development and environment, is to understand thata bit o technology is never “just” a neutral lump o metal or a piece o machinery benignly guided intoplace by the intentions o its providers, but winds upbecoming di erent things in di erent places.

In Sri Lanka, the kerosene-lamp users that Pacifc-Corp/SELCO ended up targeting earned their liv-ing in what is known as the “estate” or tea plantationsector. This is a sector in which nearly 90 per cento the people are without grid-connected electric-ity, compared to 60 per cent o the non-estate ruralsector and only fve per cent o urban dwellers beingo -grid. (In all, at the time o the project 48 percento Sri Lanka’s population o 18.5 million was o -

the-grid.)

A large proportion o this o -grid population was – and is – rom the minority Estate Tamil community, which lives and works in conditions o debt depen-

dence on tea and rubber plantations established bythe British during the colonial period. Un air labor practices in the sector have continued to keep estatesociety separate rom and unequal to the rest o SriLankan society. Daily wages average US$1.58 and theliteracy rate is approximately 66 per cent, comparedto 92 per cent or the country as a whole. g The estatepopulation is underserved when it comes to in ra-structure. A sample survey o f ty estates ound that62 per cent o o estate residents lacked individuallatrines and 46 per cent did not have a water sourcewithin 100 meters o their residence. h

Due partly to its cost, electrifcation, unlike healthcare, water supply, and sanitation, has never been oneo the core social issues that social-service organiza-tions working among the estate population get in-volved in.

That would seem to make the estate sector the per ect choice or a solar technology project. I still don’t see the

problem.

There’s no question that electr ifcation could do a loto good or workers and their amilies. By displacingsmoky kerosene lamps, it would provide a smoke-

ree environment that reduces respiratory aliments, aswell as quality lighting that reduces eyestrain and cre-ates a better study environment or the school-go-ing generation i who are eager to secure employment

outside the plantation economy. Researchers haveound clear connections between o -grid technol-ogy and educational achievement.

As tea estates are regulated and highly structured en-clave economies, SELCO could not approach workerswithout the cooperation and approval o estate man-agement. The CEO o one plantation corporation,Neeyamakola Plantations, was willing to allow SEL-CO access to “the market” that his o -grid workersrepresented. He himsel liked the idea o solar electri-fcation, but or an entirely di erent set o reasons.

How’s that?

Sri Lanka’s 474 plantation estates recently were priva-tized. Facing ferce competition rom other tea-pro-ducing countries, they need to lower production costsand increase worker productivity in order to compen-sate or low tea prices on the global market andwageincreases mandated by the Sri Lankan Government.Neeyamakola had already introduced some produc-tivity-related incentives and thought that solar-homesystems could provide another. A ter all, with a regular electricity supply, workers could watch more televi-

sion. j Seeing how other people in the country lived,they’d want to raise their standards o living too. For that, they’d need money. To earn more money, they’dwork harder or longer, or both. k



So, in 2000, Neeyamakola was only too happy tosign an agreement with SELCO or a pilot proj-ect on its Vijaya rubber and tea estate in Sri Lanka’sSabaragamuwa Province, where over 200 amilieslived.

Well, it sounds to me like the per ect match. I Neeyamakola ocused on the bottom line, what’s sobad about that? It’s a matter o unleashing the proftmotive or the incremental improvement o societyand the environment.

No one expected Neeyamakola, SELCO or Pacifc-Corp to operate as charities. The point is to understandwhether such a business partnership was ever capableo doing the things it was advertised to do, what e ectsthe partnership had on the a ected societies, and whomight be held responsible or the results.

So what happened?

At frst, the pilot project was to be limited to work-ers living in one o the our administrative divisionsinto which the Vijaya estate was divided, Lower Divi-sion, and in nearby villages. Some our-f ths o theseworkers were Estate Tamils living in estate-provided“line housing”. The other f th were Sinhalese wholived within walking distance.

In the frst three months, only 29 amilies decided

to participate in the solar electrifcation project: 22o Lower Division’s 63 amilies and seven Sinhalaworkers who lived in adjacent villages. In the end,the project installed only 35 systems be ore it wascancelled in 2001.

What went wrong?

Two things. The frst thing that happened was that, inthe historical and corporate context o the estate sec-tor, the SELCO project wound up being structuredin a way that strengthened the already oppressivehold o the plantation company over its workers.

But how could that happen? Solar energy is supposed tomake people more independent, not less so.

This gets back to the nature o Neeyamakola as a pri-vate frm. From the perspective o plantation man-agement, the electrifcation project had nothing todo with carbon mitigation and everything to do withproftability and labor regulation.

Neeyamakola’s concern was to increase productiv-ity. Its idea was to use access to loans or solar-home

systems to entice estate laborers into working ad-ditional days. The Neeyamakola accounting depart-ment would deduct a Rs.500 loan repayment everymonth and send it to SELCO. l

In order to quali y or a loan, workers had to be reg-istered employees who worked at least fve days amonth on the estate. m The loan added another layer o worker indebtedness to management. In this case,the indebtedness would last the fve years that itwould take the worker to repay the loan taken romthe corporation. n

From workers’ point o view, the system only addedto the company’s control over their lives. Historically,a ter all, the only way that estate workers have beenable to get fnancing to improve their living condi-tions has been through loans that keep them tied tothe un air labor practices and dismal living conditionso estate li e. To upgrade their housing, or instance,workers have to take out loans rom the PlantationHousing and Social Wel are Trust (PHSWT). Onecondition o these loans is that “at least one am-ily member o each amily will be required to workon the plantation during the 15-year lease period”, o during which estate management takes monthly de-ductions rom wages. Hampered by low pay and per-petual indebtedness, workers fnd it di cult move onand out o the estate economy.

I see. And what’s the second problem?

Inequality and social con ict o many di erentkinds. First, as Neeyamakola o ered solar primarilyto estate workers, most o whom are members o the

Tamil ethnic minority, the nearby o -grid villagerso the Sinhalese majority elt discriminated againstand marginalized. Disgruntled youth rom adjacentvillages as well as rom estate amilies who weren’tbuying solar systems threw rocks at the solar panelsand otherwise tried to vandalize them.

Second, local politicians and union leaders saw so-lar electricity as a threat to their power, since bothgroups use the promise o getting the local area con-nected to the conventional electricity grid as a wayo securing votes. So they started issuing threats todiscourage prospective buyers.

Third, the village communities living around theVijaya Estate eared that i too many people on theestate purchased solar, the Ceylon Electricity Boardwould have a reason or not extending the grid intotheir area. And without the grid, they elt, that small-scale industry and other entrepreneurial activities,that would generate economic development and in-creased amily income, would remain out o reach,making their social and economic disadvantagespermanent. p (Any delay in the extension o the gridto the area occasioned by the PacifcCorp/SELCO

Neeyamakola project, o course, would have its owne ects on the use o carbon, and would have to be

actored into PacifcCorp/SELCO’s carbon accounts.There is no indication that this was done.)



This section is based on the research o Dr Cynthia Caron. A ter completing her Ph. D. at Cornell University, USA,

on electricity sector restructuring in Sri Lanka, Dr Caronmoved to Sri Lanka. She has been awarded a grant romthe Macarthur Foundation and has been researching orced migration, resettlement and Muslim nationalism and its re-lation with Sri Lanka’s ethnic confict, as well as working on development and health projects.

Added to all o this was inequality within the com-munity o estate workers themselves. One conse-quence o Neeyamakola’s ocus on getting more outo its workers was that many estate residents whose

work is productive or society in a wider sense wereineligible or the systems. One example is what hap-pened to the primary school teacher in the Tamil-medium government school that served the estatepopulation. The daughter o retired estate workers,the teacher received a reliable monthly salary, couldhave met a monthly payment schedule, and was will-ing to pay, but was ineligible or a system becauseher labor was not seen as contributing directly tothe estate’s economic productivity and proft mar-gin. Retired estate workers and their amilies wereexcluded or the same reason. SELCO, a frm newto Sri Lanka, was unable to ensure community-widebenefts or equity within the community as a pre-requisite in the design o the pilot project.

On the Vijaya Estate, in short, the decentralized na-ture o solar power – in other contexts a selling point

or the technology – had quite another impact andmeaning in the context o Sri Lanka’s estate sector.It provided the company that was controlling the“technology trans er” with a new technique to exertcontrol over its labor orce and ensure competitiveadvantage, while exacerbating underlying con ictsover equity.

It’s interesting to note, incidentally, that solar projectsin Sri Lanka o ten all short even at the householdlevel, where many amilies end up reducing their

consumption o kerosene by only 50 per cent. q Thereare many reasons or this. Kerosene use is necessaryto make up or aulty management while householdmembers become acquainted with the energy-stor-age patterns o the battery and system operation.Households also ace problems managing storedenergy, with children o ten using it all up watchinga ternoon television. And local weather patterns andtopography likewise take their toll. In some hilly ar-eas with multiple monsoons, solar can supplementkerosene systems at best or a six- to nine-monthperiod depending on the timing and duration o themonsoon.

Did Paci cCorp’s electricity customers – or the Oregonlegislature – know about all this?

Given the geographical and cultural distances in-volved, it would have been di cult or them to fndout. On the other hand, it seems unlikely that North-ern consumers o electricity – i they are in ormed o such details – will accept carbon-o set projects thatinvolve not only dubious carbon accounting, but alsoblatantly exploitative conditions and the reversal o poverty alleviation e orts.

This is another reason why, while undertakings likePacifcCorp/SELCO’s have rom the beginningbeen more about “preserving the economic statusquo” and promoting cost e ciency in developed

countries than about bringing equity to developingcountries, r it is unclear how long they will be able towork even in maintaining that status quo.

OK, I can see there were some problems. But surelysocial and environmental impact assessments could have identi ed some o these problems in advance. With proper regulation, they could then have been prevented.

Some o them might have been. For example, the so-lar technology could have been reconfgured so thatan entire line o amilies could have pooled resourcesand benefted, rather than just individual houses.

But setting up an apparatus to assess, modi y, monitor and oversee such a project isn’t by itsel the answer.Such an apparatus, a ter all, would have brought withit a resh set o questions. Who would have carriedout the social impact assessment and would they havebeen sensitive to local social realities? Would its rec-ommendations have been politically acceptable toNeeyamakola? Would its cost have been acceptable toPacifcCorp? What kind o urther oversight wouldhave been necessary to prevent it rom merely addinglegitimacy to a project whose underlying problems

were le t untouched?

Just as a technology is never “just” a neutral piece o machinery which can be smoothly slotted into place



to solve the same problem in any social circumstance,so the success o a social or environmental impactassessment is dependent on how it will be used andcarried out in a local context.

But i success is so dependent on political context, how will it ever be possible or new renewable technologies tomake headway anywhere? I it isn’t possible, then we might as well give in and keep using ossil uel tech-nologies! We might as well go along with ExxonMobil when they claim that we have to go on drilling oil since anything else would be to betray the poor!

The alternative is not to accept the dominance o ossil uel technologies. Their continued dominance

also does nothing to improve the position o disad-vantaged groups such as Sri Lanka’s Estate Tamils.Nor is the alternative simply to accept the system o global and local inequality exemplifed in Sri Lanka’sestate plantation sector.

The alternative, rather, is to act using our under-standing that what keeps marginal communities likethat o Sri Lanka’s Estate Tamils in the dark, so tospeak, is not just bad machines, or just a lack o goodones, but also a deeper pattern o local and globalpolitics. Cutting ossil uel use means understandingthis deeper pattern.

Up to now, climate activists and policymakers have

o ten told each other that “the essential question isnot so much what will happen on the ground, butwhat will happen in the atmosphere ” .s The exampleo the PacifcCorp/SELCO/Neeyamakola rural solar electrifcation project helps show why this is a alsedichotomy. What happens on the ground in com-munities a ected by carbon projects is important notonly because o the displacement o the social bur-dens o climate change mitigation rom the Northonto already marginalized groups in the South, butalso because what happens on the ground in uenceswhat happens in the atmosphere.

(Endnotes)a US Environmental Protection Agency, Inside the Green-

house (Washington, EPA: 1997), www.epa.gov/global-warming/greenhouse/greenhouse2/oregon.html. So-lar-home systems are purchased on credit. SELCO wasto use money rom Klamath Falls to purchase stock.

It would then be reimbursed by estate managementusing deductions rom project participants’ monthlysalaries.

b SELCO, a Maryland-based frm with o ces in Banga-lore, Colombo and Ho Chi Minh City, was establishedin 1997. Its Sri Lankan branch olded in 2005.

c Solar-industry analysts believe that the Sri Lankanmarket or solar-home systems is at least one million,not including the war-torn provinces o the northand east. (Personal communication, Mr. Pradeep

Jayawardene, Shell Renewables Lanka Ltd. At thetime o the interview, this number did not includethe war-torn provinces in the north and east whereethnic con ict has created economic instability anduncertainty or Sri Lanka’s business community. Withthe 2002 cease-fre agreement between the Govern-ment o Sr i Lanka and the Liberation Tigers o TamilEelam (LTTE), the solar market might open up in theLTTE-dominated provinces in the island’s north andeast). As o August 2002, about 30,000 systems hadbeen installed island-wide, 20,000 with support romthe World Bank’s Energy Services Delivery Project.(Lalith Gunaratne, email correspondence 12 August2002.) For more on the di culties o fnancing solar-home systems or rural electrifcation, see CynthiaCaron, “Examining Alternatives: The Energy ServicesDelivery Project in Sri Lanka.” Energy or Sustainable Development 6(1) (2002), pp. 37-45.

d SELCO, “Developing Countries Receive Solar Fund-ing rom Oregon’s Klamath Cogeneration ProjectCarbon O set Port olio.” SELCO Press Release 4, 13,September 1999. Each lamp emits about 0.10355 tonso carbon dioxide per year.

e Roberts, J. T. and P. E. Grimes, “World System Theoryand the Environment: Toward a New Synthesis”, in R.E. Dunlap, F. Buttel, P. Dickens and A. Gijswijt, eds., Sociological Theory and the Environment: Classical Foun-dations, Contemporary Insights(Lanham: Rowman andLittlefeld, 2002), p. 184.

Due to the country’s ethnic con ict, areas o the northand east also have large o -grid populations (80-100

per cent). Either the grid has been destroyed or thea ected areas are under rebel control. In 1999-2000,the government and the private sector were unable toundertake in rastructure development activities in thisregion.

g At the same time (1999), the country’s overall literacyrate was close to 92 per cent. Estate education is un-dersta ed. In 1999, the national teacher-student ratiowas 1:22; in the plantation sector it was 1:45.

h From a study conducted by the Plantation Housingand Social Wel are Trust.

i Little, A. W., Labouring to Learn: Towards a Political Econ-omy o Plantations, People, and Education in Sri Lanka.New York, St. Martin’s Press. 1999.

j Some amilies already used a car battery to power tel-evision sets.

k Personal interview, 18 August 2000.l Five days at Rs. 122.15 (US$ 1.58) - $7.90.



m There were three cadres o employment on the estate:resident-permanent ( rom the estate lines), non-resi-dent permanent ( rom nearby villages), and tempo-rary-casual.

n Many workers already had loans to upgrade their existing housing. Estate management took monthly

deductions rom the wages o workers who had hous-ing loans administered by The Plantation Housing andSocial Wel are Trust (PHSWT). Under the PHSWThousing-loan scheme, “at least one amily member o each amily will be required to work on the plantationduring the 15-year lease per iod”, according to the trustitsel . The only source o unding available to workersto improve their living conditions has been throughloans that keep them tied to the un air labor practicesand dismal living conditions o estate li e.

o Figures are due to the Plantation Housing and SocialWel are Trust.

p While there are no studies that show a direct correla-tion between concentrations o o -grid technologiessuch as solar power and decisions not to extend thegrid into those areas (email communication, Mr. La-lith Gunaratne, 12 August 2002), the ear that o -gridelectrifcation could keep an entire area permanentlyo -grid was very real or adjacent residents. Solar-home systems generate between 35 – 50 watts o pow-er, enough power to meet requirements or domesticlighting and electronic entertainment such as TV andradio. The relative low generation capacity o solar home systems does not appear to enable equitableopportunities or economic development in o -gr idareas.

q Caron, op. cit.r Boehmer-Christiansen, S., “Science, Equity and the

War Against Carbon.” Science, Technology and HumanValues 28(1), 2003, p. 82.

s Faeth, P., C. Cort, et al., Evaluating the Carbon Sequestra-tion Bene ts o Forestry Projects in Developing Countries,World Resources Institute/EPA, 1994.



8 Thailand: Biomass in the Service o the Coal and Gas EconomyThe experience o Sr i Lanka shows that not all proj-ects that go under the name o “renewable energyschemes” promote local betterment, oster local au-tonomy, or help in the transition away rom ossil

uels (see chapter 7).

But other types o “renewable energy” projects mayturn out to be o equally questionable climatic or so-cial value when integrated into the carbon market assupports or a system dominated by ossil uel tech-nologies and corporate expansion. A good example isa “biomass energy” project seeking CDM support in

Yala province in Thailand’s troubled ar south.

There, an approximately 23-megawatt power plantuelled by rubberwood waste and sawdust is being

developed by a diverse group o companies linked bytheir interest in the carbon trade. They include:• Gul Electr ic, an independent power producer 50

per cent owned by Thailand’s Electricity Gener-ating Public Company (EGCO) and 49 per centby Japan’s Electric Power Development Company(EPDC).

• Asia Plywood (AP), a Yala rubberwood processor next to one o whose actories the plant would belocated.

• Det Norske Veritas (DNV), a Norwegian ‘riskmanagement’ consultancy in the process o parlay-ing its experience in certi ying the credibility o pioneer carbon schemes such as Yala into a major share in CDM’s consultancy market.

EPDC is a largely ossiluel-oriented company andthe largest single user o coal in Japan. a It operates66 coal- fred and hydropower stations and burnedUS$652 million in ossil uels in 2001 alone. b It alsohas interest in six gas-fred power generating plants

in operation or under construction in Thailand, to-talling 2,733 megawatts. c Nor, with a large new coal-fred power station under construction in Yokohama,does EPDC contemplate any change o direction inthe uture. “Coal o ers stable supply and outstandingeconomical e ciency,” says a company presentation:

“hence we predict it will support world energy con-sumption throughout this century. Our great missionis to ensure that coal is burned cleanly thus reducingthe burden on the environment.” d

Accordingly, EPDC’s main response to global warm-ing is coal gasifcation, which o course does nothingto halt the ow o ossil carbon to the sur ace, and thedevelopment o a nuclear power plant. For EPDC,

the point o investment in Yala would be to gain so -called Certifed Emissions Reductions to help it, and

Japan generally, maintain current levels o ossil- uelcombustion in the ace o Kyoto pressures.

EGCO is also largely structured around ossil-uel technologies. One o EGCO’s gas-fred pow-

er stations, in act, is operated in partnership withUNOCAL, a US multinational ossiluel frm that isa member o anti-Kyoto Protocol and climate -skep-tic business groups.

Gul Electric, meanwhile, with a mainly gas- uelledgenerating capacity, has become well-known in re-cent years partly due to the overwhelming March2003 de eat o its proposed 734-megawatt Bo Nokcoal-fred power plant on the Gul o Thailand. Localpeople in Prachuab Khiri Khan province had longbeen concerned about pollution and other potential-ly destructive e ects o the project and had mounteda success ul regional and national campaign againstit. Following their victory against Gul , the compa-ny moved quickly to propose a gas-fred subsitituteplant urther up the coast.

I any urther evidence were required that the spon-soring frms are not treating the Yala project as a stepaway rom ossil uels, there is the act that they hadoriginally planned to build the power plant with-out any carbon fnance at all. It is only since thedepths o the Thai fnancial crisis, in 1998, that theyhave contemplated securing supplementary undingthrough carbon trading. e Encouraging them to de-velop the idea have been subsidies rom Thailand’sEnergy Policy and Planning O ce’s Energy Conser-vation Promotion Fund as well as portions o botha US$30 million OECF loan under a 1999 fve-year

Global Environmental Facility (GEF) project and aGEF outlay o $3 million toward commercial riskpremiums. g

But i the point o the Yala project is to help keep corpo-rations using ossil uels, how can the credits it generates

possibly be tokens o measurable climate bene ts?

The project’s proponents claim that it would save ameasurable amount o carbon by “replacing” some o the electricity in the Thai grid that’s now generatedby burning ossil uels.

How do they know that the plant would do that?

The validator, DNV, realized that it had no way o



determining that the new project’s power wouldbe replacing either combined-cycle natural gas or oil- uel electricity in the national grid. h It was alsotold by Thailand’s electricity authority that it was‘’o ten a mistake to see a direct link o displacementbetween an increase in one component o thegrid and a reduction in another.’’ So DNV lookedat the “average” carbon intensity o electricity

rom the Thai grid. It then subtracted the fgurecorresponding to the projected carbon intensity o electricity rom the project and multiplied that bythe project’s output. DNV argued that the resultingfgure is conservative, since expansion plans by theThai electricity authority eatured a “higher carbonintensity than the grid average used by the project”,although the authority’s fgures were a subject o hotdispute in Thailand and carbon intensity per year varies by about 20 per cent. i

It all sounds a bit too much like guesswork, given that the object is the calculation o a precise number o tonneso CO2 saved. How can they possibly be sure that i the project didn’t exist, exactly that amount o electricitywould have been generated through nothing better thanthe current “average” uel mix?

They can’t. But it’s a procedure that’s acceptable inprinciple to the UN.

I assume the consultancy also actors in how much

additional use o ossil-generated EPDC electricity the project might encourage in Japan?

No.

Why not? I the project helps reassure electricityconsumers or investors in Japan that it’s OK to keepusing coal-generated electricity there, doesn’t that add tothe carbon debit o the project?

Yes, it does. But Kyoto carbon accounting tends toignore such realities, not that they could be measuredanyway (see above). So DNV was under little obliga-tion to present an answer to your question in any o the hundreds o pages o highly-technical documentson the Yala project. Assessing the many indirect car-bon or climatic e ects o the project, according toDNV, “is not necessary in our opinion”. j

Let me ask another question, then. I the project was going to be built anyway, then what exactly does it “save” that deserves a climate subsidy? It’s just businessas usual.

That’s right, and the CDM rulebook demands that

CDM projects prove that they are not business asusual. As a result, the Yala project proponents havehad to produce some evidence that it isn’t businessas usual.

How have they done that?

With di culty. At frst, project proponents claimedthat, without carbon credit sales, the project’sreturn on equity would be lower than “desirable”or “normal” but that the good publicity associatedwith a climate- riendly project would make up

or this. When NGOs pressed DNV to provideevidence or these claims, DNV said that it did nothave permission to make public the “confdential”fnancial analysis the project proponents had givenit. Project proponents also asserted that the planningneeded or the project was a “barrier” that requiredcarbon fnance to overcome, and that the project wastechnologically novel in the Thai context. k Later on,the project developer also noted that the project wassu ciently fnancially shaky that it had to be put onhold in 2002.

But even i that’s true, that wouldn’t prove that the project could be undertaken only with carbon nance.

No. And there’s a lot o evidence that, in act, theprospective carbon income o the project hasno weight at all with the investors. For example,uncertainty about whether the project wouldultimately be allowed to be registered with theCDM, or about whether the Thai government wouldovercome its initially sceptical stance toward CDMprojects does not seem to have had any e ect on

the project’s original construction schedule. What’smore, Sarath Ratanavadi, managing director o Gul Electric, was quoted in the Bangkok Post on 13 June2003 as saying that Gul Electric and EPDC “willgo ahead with the 800 million baht project [Yalabiomass] even without CDM”.

What was DNV’s response to that?

It protested that the project’s “non-additionalityis not as obvious as asserted” l and said that it hadconsulted with EPDC about Sarath’s statement.

From a scienti c point o view, that’s not terri callyconvincing.

No. For this project to be registered with the CDMwould, in act, probably be a net loss or climaticstability, since it would enable the Japanese govern-ment to write down its Kyoto commitment by hal amillion tonnes o carbon dioxide without providinganything verifable in return. Nevertheless, the con-troversy over Yala is representative o the level o de-bate that still prevails in ront o the UN committeesand panels responsible or overseeing the CDM.

That’s bound to be good news or project developers whodon’t have any qualms about pushing projects that have no climate bene ts.



Yes.

Well, i the project’s bene ts or the climate can’t be veri ed or quanti ed, perhaps we should orget about looking at it as a carbon project and just view it asa standard development project with an unusual

prospective source o unding. Does it at least provide some bene ts or local people?

Many local residents in act quietly oppose thenew development on AP’s Yala site as being likelyto rein orce local imbalances o power over air andwater quality. They’ve long elt animosity toward AsiaPlywood or causing pulmonary health and other problems through smoke and ash pollution o localair, water and land, and pro ess “no trust” in the frm.Subdistrict o cials have even alleged that the frmhas not paid its ull share o taxes.

But why should any o that make any di erence to their view o the new project?

Because or them, the important thing about theproject is not the theory behind it, but who is goingto carry it out. Local people might well agree withDNV that the disposal o rubber wood residues atAsia Plywood and other installations is “one o themost serious environmental problems in the Yalacommunity.” But they view corporate reliabilityas a more important prerequisite or solving such

problems than technical proposals. Re using toabstract rom the local political context, they seenarrowly technical actors such as new equipment or CDM certifcation as irrelevant as long as underlyingcon icts between company and community are nottackled. “I current problems are not solved,” onelocal health o cial interviewed asked, “how are newproblems going to be addressed?”

Shouldn’t DNV have taken account o such views?

DNV was well aware o locals’ view that AP shouldsolve its existing problems with “noise, wastewater and solid waste” be ore attempting anything else, andshould communicate the details o construction tothe community as well as involve it in monitoring.

Yet it had ew incentives to take villagers’ politicaland social analysis seriously as relevant to projectassessment.

For example, DNV wrote in an anodyne, theoreticalway about a “comprehensive public participationprogram” to “accurately in orm local residents,government o cials and other concerned memberso the public about the Project and expected

impacts” and “obtain eedback, mainly rom the localcommunities and concerned government agencies,with regard to their opinions and concerns aboutthe Project”, including the subdistr ict administrative

authority’s committee and residents in “surroundingvillages”. Deadpan, it recorded a meeting o less thanone hour with the Lam Mai subdistrict authority. Thepicture was o a project and its participant frms as“black box” or neutral machine into which ormulas

or environmental improvement, participation andgood community relations could be ed with near-automatic results. Local environmental problemswere seen as stemming rom a mere technical lacuna

– one that the CDM project would help fll.

Biomass is not always benign.Noo Nui, a comic gure rom the shadow puppet olklore o Southern Thailand,registers his opposition to a proposed power plant using waste biomass on the ground it will “destroy the environment”.The project in question didn’t try to gain access to carbon

nance, but is similar to one in the same region that did.

Similarly, when at an August 1999 public consultationew respondents agreed with the project, DNV put

it down to “previous dissatis action with the dustcaused by AP’s operation” and claimed that, ollowingthe installation o a new boiler which uses sawdust,“Lam Mai [subdistrict] residents no longer disagreewith the Project” (EPDC, 2002).

Are you saying that that’s not true?

It’s certainly not the impression given by a number o local residents interviewed more recently. To them,the workings o the frms involved in the project, ar

rom being enclosed in a “black box”, are both opento view and o power ul interest.

Several people interviewed pointed out that DNV’s“public participation program”, instead o involvingdissemination o use ul in ormation, has eaturedexpenses-paid tours or local people to biomasspower plants in Thailand’s central region. Such tours,

they reported, have included hotel accommodation,ood and ree visits or some male participants tolocal prostitutes, but not any close inspection o theplants in question nor chances to meet local people.



Local residents also pointed to AP’s name on a salathat the company gave to a Buddhist temple adjacentto its actory a ter temple monks complained aboutpollution – an act incurring power ul reciprocalobligations. They noted that other modes o persuasion have also been used: one elderly residentinterviewed reported receiving no less than threedeath threats as a result o voicing criticisms o theAP project.

So some o the locals aren’t too keen on carbon trading?

Who knows? They understand very well whatbiomass is, but they’ve never had a chance to discussthe carbon market. Most people are completelyunaware o the AP project’s projected role in thisnew global trade.

(Endnotes)a J-Power Group, “FY 2005 Group Management

Plan”, FY2005-2007, Presentation Materials, J-Power, Tokyo, 5 April 2005.

b Electr ic Power Company Development, “ProjectDesign Document or a Rubber Wood ResiduePower Plant in Yala, Thailand”, Tokyo, EPCD,August 2002.

c J-Power, op. cit., p.26d J-Power, op. cit., p. 15.

e Food and Agriculture Organization, RegionalWood Energy Development ProgrammeOptions or Dendropower in Asia: Report on the Expert Consultation, Manila, 1-3 April 1998, FAO,Bangkok, 2000.

Global Environment Facility, Project Brie or project THA/99/G31, World Bank, Washington,DC, 1999.

g United Nations Industrial DevelopmentOrganization, Thailand: Case Study, CapacityMobilization to Enable Industrial Projects Under the Clean Development Mechanism, Vienna, 2002;Electric Power Company Development, op. cit.

h Op. cit., p. 29.i Mitsubishi Securities, AT Biopower Rice Husk

Power Project , 2003, available at http://cdm.un ccc.int/EB/Panels/meth.

j Einar Telnes, DNV, personal correspondence, 30May 2002.

k Jane Ellis, “Evaluating Experience with Electricty-Generating GHG Mitigation Projects”, OECDEnvironmental Directorate, IEA, COM/ ENV/EPOC/IEA/SLT(2003) 8, Paris, 2003.

l Einar Telnes, DNV, Personal communication, 27November 2002.



9 South A rica:Saving Carbon or Destroying Health?

D urban Solid Waste (DSW), part o Durban’scity council bureaucracy, manages a landfll site

called the Bisasar Road dump. The dump is locatedin an area that was designated or people o Indiandescent under apartheid’s Group Areas Act. It’s alsoa primary source o livelihood or the mainly A ri-can, and poorer, Kennedy Road settlement, manyo whose residents recycle materials rom the dumpwhile struggling with o cials and business to gainmore secure rights to the land their houses occupy.

Views o the Bisasar Road land ll.

Although the site is licensed only to receive domesticwaste, medical waste, sewage sludge, private corporatewaste and large shipments o rotten eggs have alsowound up there. Cadmium and lead emissions areover legal limits, and limits or suspended particulatematter also o ten exceeded. Concentrations o methane, hydrogen chloride, and other organic andinorganic compounds including benzene and toluene,trichloroethylene and ormaldehyde are high.

That sounds dangerous.

Local residents report many health problems, with six

out o ten o the houses in one downwind block onthe nearby Clare Estate reporting cancer cases. Thecauses o each such individual case o disease are no-toriously di cult to pin down. They could includeemissions rom incineration practices which stoppedin 1997, other emissions rom the dump either be oreor a ter, or other actors.

But with some houses only 20 meters away rom thelandfll site boundary, it’s hardly surprising that manyin the community want the dump shut down. In act,the city council itsel pledged in 1987 to close thesite and turn it into sports felds, picnic areas andplay areas or children. When, in 1996, the councilreneged a second time on the promise, some 6,000local residents signed a petition o protest, with manyblocking the dump site entrance and staging demon-strations and marches.

I’m not surprised. But what does all this have to dowith mitigating climate change?

In 2002, the World Bank’s Prototype Carbon Fund(PCF) began promoting a prospective CDM project

to extract methane rom the Bisasar landfll and burnit to generate up to 45 megawatts o electricity or supply to the national grid.

I’m not sure I understand. How can a project that emitscarbon dioxide using uel rom a smelly land ll site be climate- riendly?

The idea is that the electricity generated by the proj-ect would “replace” electricity that otherwise wouldhave been generated by burning coal. It’s claimed thatthe project would generate enough power to lightup 20,000 in ormal houses or 10,000 ormal-sector houses. Because burning methane is less climaticallydamaging than simply releasing it, and better thanburning coal (the dirtier uel usually used) the proj-ect is better than the alternative.

The alternative? There’s only one? Surely there must be many alternatives. What about using the money to close the dump down and treat some o the waste? What about just pumping the land ll gas into the nearbyPetronet gas pipeline network so that it would not need to be burned on site? Or nding ways o using electric-ity more e ciently? Or more non- ossil community-

level power sources?

No, the carbon credit market demands that there beonly one alternative. That’s the only way o doing the



carbon accounting or a project like this. I there ismore than one alternative, then you will have morethan one number corresponding to the carbon “saved”,and you won’t be able to assign a single number to thenumber o carbon credits your project is producing.So you won’t have anything defnite to sell.

But that’s just crazy. There are always manyalternatives.

Yes, but the accounting system that carbon projectsneed dictates otherwise. It leaves no space or multiplealternatives or more than one political choice.

But how can such a view be en orced when everybodyknows that there are many alternatives to the Bisasar Road carbon project, not just one?

In the early phase o the project, authority or decidingwhat the uture would be without the Bisasar Roadscheme was quietly given to two individuals at thePCF in Washington – Sandra Greiner and RobertChronowski. Griener and Chronowski were theones who determined what would and would notbe possible in South A rica in the absence o theproject. a Their decision was clothed in many pages o impressive numbers and rein orced through meetingsand pro essional review. I the project goes orwardand sells carbon credits to Northern corporations,allowing them to burn ossil uels in their countries,

it will have to be on the basis o numbers like theones Greiner and Chronowski suggested.

But didn’t anybody protest? Didn’t anybody questionwhether two people in Washington had the right todecide what the alternative energy uture o Durbanmight be?

Protest was di cult. In ormation dissemination andpublic consultation on the project proposal werecarried out over the internet, to which only a small

minority o the local community have access. Timeallocated or objections in late 2004 was a mere 10days. And ew outside the immediate area were either interested in or aware o what was going on.

I still don’t get it. How can anybody prove that the project is an improvement on business as usual? Which businessas usual? How much o an improvement? Maybe DSW would have put in a methane-burning plant anyway.

Durban o cials claim that without the US$15 millionprovided by the deal, they would not bother tryingto recover the methane as uel, since the electricitygenerated in the process costs so much more per kilowatt hour than the local power utility charges or its coal-fred power. b

All right, air enough. But assuming that’s true, all it proves is that continued raw methane release and coal- red power is a choice that would have a reasonable economic rationale, not that it is the only choice that could be made.

That’s all that’s required, under the rules, or theproject to create carbon credits.

All right. But who would buy carbon credits romthe dump?

All PCF investors are to get pro rata shares o rights

to ignore an increment o their obligations under the Kyoto Protocol to reduce their own miningand burning o ossil uels. These investors includeBritish Petroleum, Mitsubishi, Deutsche Bank, TokyoElectric Power and Gaz de France, as well as thegovernments o The Netherlands, Norway, Finland,Canada, Sweden and Japan.

And is this a good thing or local people who live around the dump?

That depends a lot on who you ask.

Well, what does the PCF say?

The PCF says that improving the “fnancial positiono DSW” would also beneft local people and senda “clear signal” to them that “the environment is anumber-one concern in South A rica and is beingdealt with in the best way possible.”

And what does the local community say?

Again, that depends on who you ask. But let’s startwith members o the Indian community on theborder o the dump. One, Sajida Khan, who wasdiagnosed in 1996 with cancer, and whose nephewdied o leukaemia, had this to say in 2002:

The ence separating the dumpsite rom the community.



“To gain the emissions reductions credits they willkeep this site open as long as possible. Which meansthe abuse will continue as long as possible so they cancontinue getting those emissions reductions credits. Tothem how much money they can get out o this ismore important than what e ect it has on our lives.” c

Khan and other community members see PCFsupport or the methane project as having throwna li eline to the dump. They note that the PCF’screditing period or the project is seven years, twicerenewable, making a total o 21 years. According tothe PCF, “because o the growing waste generationper capita in the municipality . . . there is no plan toclose . . . the Bisasar Road site . . . during the PCFproject li e.” To Khan and colleagues, this new leaseon li e or the dump, together with the PCF claimthat Bisasar Road is an “environmentally progressive. . . world-class site” leave a very bitter taste in themouth.

Understandably so. But are there other views?

One o the municipality’s top o cials responsibleor the project, Lindsay Strachan, Project Manager

o eThekwini Engineering and Projects, has littlepatience with opinions like Khan’s. Because protesters“can’t think globally any more,” he complains, “theproject is literally slipping through our fngers.” d

The Bisasar Road Project:Conficting Views

“What are we going to do about carbon trading?Our president [Thabo Mbeki] is saying, ‘Where isthis project? Where is any project? Where’s anything?’[There is] a big rush to get South A rica on the map.[Yet now, due to appeals,] the frst project in A rica is . .. stopped in its tracks and . . . literally slipping throughour fngers. . . . Japan is calling me. But I say we have

no project. . . . [The two per cent o people whoobject] are saying that this is in my backyard, I can’tthink globally anymore. . . . South A rica probablywon’t be able to say that we spearheaded the CDMmarket or better still we spearheaded the emissionsreductions market. . . . There is disappointment, butsuch projects will go on elsewhere, in Brazil or Chileor India or Iran or Kampala.”

Lindsay Strachan, Manager o Engineering and Projects,Durban Solid Waste

“The poor countries are so poor they will acceptcrumbs. The World Bank know this and they aretaking advantage o it.”

Sajida Khan, Bisasar Road community resident

But there are more than just two sides to this story.Most o the A rican residents o the nearby KennedyRoad settlement also support extending the li e o the dump. For one thing, the dump provides mosto their current livelihood. For another, the newWorld Bank carbon project has shrewdly promised toprovide jobs and a ew local scholarships. The Bankalso pushed DSW to conduct “consultative exercises”in Kennedy Road that constituted one o the ewoccasions that the community had been o ciallyrecognized. Kennedy Road residents could not helpbut contrast that recognition with what they perceiveas the Bisasar Road community’s lack o sympathy

or their ongoing struggles to secure rights to theland they live on so precariously.

Sajida Khan

But presumably the World Bank and DSW are merely trying to divide the local Indian and A ricancommunities rom each other?

Kennedy Road activists are under no more illusionsabout the agendas o outside agencies than they arein the ront lines o international debate over climatechange. But, as Raj Patel o the local Centre or CivilSociety at the University o KwaZulu-Natal observes,“when communities have been systematically denieddignity,” “consultations” such as those staged byDSW under World Bank pressure may be the only“substitute or marginalization” available. e

There’s also the argument that by extracting methane,the project not only prevents quantities o a power ul

greenhouse gas rom being dispersed in the atmosphere,but also bene ts local air quality.

It might, to some degree – although a lot o associatedpollutants would still be released, including carbonmonoxide and various hydrocarbons.

Clean air, however, is a right South A ricans areconstitutionally guaranteed even in the absence o carbon trading schemes. In a sense, there ore, Kyotocommodity production is being staked here to the



non-en orcement o environmental law. DSW, PCFand their consultants are helping to enclose not onlylocal communities’ air, but also their uture. In theprocess the World Bank is also undermining its ownstated concern with “good governance” and the ruleo law, because it’s providing an incentive not toen orce the constitution.

Latrine near Kennedy Road community houses.

What’s the uture o the project?

Uncertain. Project opponents, backed by sympathizersin a range o countries, are defnitely having an impact.Sajida Khan and others have fled ormal complaints,

citing technical environmental, health and socialproblems. Several newspaper articles were publishedon Khan and her struggles, and in November 2004,World Bank sta were orced to visit Durban tohave a look or themselves. But project proponents,including Bank sta , are unlikely to give up easily.

Some o the research or this section was done by TrushaReddy while she was an intern at the Centre or Civil Society at the University o KwaZulu-Natal.

(Endnotes)a World Bank Prototype Carbon Fund, Durban, South

A rica: Land ll Gas to Electricity,Project Design Docu-ment, Final Dra t, World Bank, Washington, January2003.

b Trusha Reddy, “Facing a Double Challenge”, Univer-

sity o KwaZulu-Natal Centre or Civil Society, Dur-ban, 2005, available at http://www.carbontradewatch.org.

c Carbon Trade Watch The Sky’s Not the Limit: The Emerging Emissions Trading Markets, Transnational In-stitute, Amsterdam, 2002, available at http://www.carbontradewatch.org.

d Reddy, op. cit.e Raj Patel, Centre or Civil Society, University o Kwa-

Zulu-Natal, personal communication.



10 Brazil: Handouts or Repression as Usual

In a carbon project in Minas Gerais, eastern Brazil,carbon trading institutions have also used and

exacerbated coercive power relations in still another attempt to produce an imaginary carbon commodity.As in Ecuador, the Forest Stewardship Council (FSC)has played a big role and, as in South A rica, the WorldBank as well.

I take it this is another tree plantation project?

Partly, but it’s a good deal more complicated. Thecompany claiming to be saving carbon and helpingthe climate is a pig iron-producing and plantationmanagement company called Plantar S.A..

How is Plantar helping the climate? Is the pig iron it makes produced by solar energy? Or is it perhaps used to make solar cells?

Alas, no, the iron is produced by burning charcoaland releasing carbon dioxide to the atmosphere, andis actually is used to make things like cars, which o course release yet more carbon dioxide.

In that case, how can Plantar claim that it deservescarbon credits? It sounds like it’s an active part o the industrial system that is accelerating climate change.

Good question. Plantar and its World Bank associateshave tried many lines o argument. At frst, theysaid that without carbon fnance, there would be an“accelerated reduction in the plantation orestry basein the state o Minas Gerais, within the next decade,caused by harvesting o existing orests (now in thelast cycle o their rotations) and lack o investmentinto replanting”. a In the absence o carbon fnance,Plantar and the Bank insisted, “the company wouldnot invest in the replanting o its orests or the [sic]pig iron production, abandoning them a ter the fnal

harvest o the existing plantations”.b

When remindedthat CDM rules do not allow credit to be providedor “avoided de orestation”, the Bank rewrote its

design documents to emphasize other justifcations.

Which were – ?

First, that Plantar was not avoiding de orestation butrather preventing an otherwise necessary switch inthe uels or its pig iron operations rom eucalyptuscharcoal to more carbon-intensive coal or coke.

Let me get this straight. This company said it deserved carbon credits or not doing something?

That’s right. Plantar claims that without carbon

money, the company would switch over rom usingcharcoal to using ossil uel. It’s called an “avoided

uel switch”. Because the carbon dioxide released bythe charcoal is supposedly mostly absorbed by thenew trees grown or new charcoal, less carbon entersthe atmosphere than would enter it rom the burningo coal.

But why would Plantar switch over to using coal? Isn’t there enough charcoal to go around?

Plantar claims that without extra carbon fnance or a 23,100-hectare plantation scheme, the charcoalfred pig iron industry aces a “supply bottleneck”.It says current plantations are being depleted and thelack o orest incentives will render new plantationsfnancially un easible without World Bank carbonfnancing. c Plantation land will be “converted topasture or agricultural land”. d

Is that true?

Well, it does somewhat strain credulity. Plantar issaying that carbon credits or its 23,100 hectareproject are the only thing that can ensure charcoalsupplies, even though Minas Gerais alone boasts twomillion hectares o eucalyptus plantations. Plantar

itsel owns rural properties covering more than180,000 hectares, mainly devoted to eucalyptus or charcoal and almost all located in Minas Gerais, e and provides management services or more than590,000 hectares o plantations or itsel and other companies in Brazil spread across 11 large units. Thefrm also has large investments in the developmentand production o high-yielding clonal eucalyptusvarieties and is reported to be producing over 40million clonal seedlings per year, with yields o 35-42cubic metres per year, contributing to its reputationas a committed, low-cost and highly competitive

producer o charcoal and many other plantationtimber products. g Plantar has recently also gone tothe trouble o getting plantations it uses to producebarbeque charcoal certifed by the FSC. Why shouldthe ailure to get carbon credits or only our per cento the total area under the frm’s management and 13per cent o its own direct holdings result in a ailureto invest in replanting? h I the fnancial prospects or new plantation development are so poor, why didPlantar purchase the lands in question only our yearsago, be ore it was considering carbon fnance?

Some 143 local groups and individuals put it morestrongly in a letter to the CDM Executive Board o

June 2004:



[T]he claim that without carbon credits Plantar ...would have switched to coal as an energy sourceis absurd... Yet now [Plantar] is using this threat toclaim carbon credits or continuing to do what theyhave been doing or decades – plant unsustainableeucalyptus plantations or charcoal... It is comparableto loggers demanding money, otherwise they will cutdown trees... [the CDM] should not be allowed to beused by the tree plantation industry to help fnanceits unsustainable practices. i

Even the project’s validator, DNV, admitted to beingsceptical o Plantar’s claim that Plantar would not in-vest in replanting in the absence o the CDM project,“given Plantar SA’s relatively strong investment capa-bilities as one o the major Eucalypt seedling produc-ers in Brazil”.

How did DNV check Plantar’s claim?

They simply went to Plantar and asked them i itwas really true or not. Unsurprisingly, Plantar execu-tives assured them that the “internal rate o return or planting new trees is today is not attractive in absenceo the sale o CDM credits”.

Meanwhile, the World Bank and its consultants ad-mit that there are several possible “land managementscenarios or the Curvelo ranch in the absence o thecarbon project”. j

That means that there are several possible baselines withdi erent carbon pro les.

Yes.

That means that there are several di erent gures or how much carbon the project might save.

Yes.

That means that there can be no single number o carbon credits generated by the project.

No, there can’t.

Doesn’t that bother the project accountants?

No. They simply choose the baseline scenario theyclaim is “most plausible” and discard the others.

So there’s actually no scienti c basis or assigning any particular number o carbon credits to the project?

No. It’s essentially arbitrary. What’s more, even i

Plantar could prove that it was avoiding the use o a quantifable amount o coal in Minas Gerais, itwould still have to prove that the coal would notbe used somewhere else or 10, 50, 100 or 300 years.

Or it would have to quanti y the extent to which itslocal avoidance o ossil uels was helping indirectlyto build an alternative, non- ossil energy economyworldwide. In the end, it’s anybody’s guess how Plan-tar’s carbon credits are related to climate.

Revealingly, even those technocrats who are com-mitted to the idea o carbon-saving projects are be-ginning to be uneasy about companies’ demands tobe given carbon money or what they are doing al-ready. In May 2003, the CDM Methodologies Panelrejected the claim o another “avoided uel switch”carbon project located adjacent to Plantar’s that it wasan improvement on “business as usual”. k In Novem-ber 2003, aced with a resubmitted accounting meth-odology, the Panel went on to express concern thatto assertions that carbon-saving projects that merelycontinue current practice are ‘additional’ throws uptechnical problems o “moral hazard”. l

“Moral hazard”? What does that mean?

It’s a term o ten used in the insurance business. Byinsuring houses, or example, an insurance company,i it’s not care ul, can create an incentive or its cus-tomers not to take proper precautions against fre.Similarly, o ering businesses a way o getting subsi-dies or what they’re doing already, without any wayo veri ying their claims about what would happenotherwise, creates incentives or them not to make

any improvements.

Are there other justi cations Plantar cites or getting carbon credits?

Three, in act. Plantar has also looked to get carboncredits or a orestation, improvements in charcoalproduction that minimize methane releases, and re-habilitating cerrado, the biome it itsel has had such ahand in depleting.

What do local people make o all this?

They fnd it hard to believe that Plantar could secureextra fnance or anything that alls under the rubrico “environment” or “development”. “We were sur-prised and bewildered by the news,” a group o over 50 trade unions, churches, local deputies, academ-ics, human and land rights organizations and othersprotested in a letter o 26 March 2003. m They seethe company as having illegally dispossessed manypeople o their land, destroyed jobs and livelihoods,dried up and polluted local water supplies, depletedsoils and the biodiversity o the native cerrado(savan-nah) biome, threatened the health o local people,

and exploited labour under appalling conditions (seePlantar vs. Local People: Two Versions o History, be-low). n



Plantar: Local People Speak

“Plantar has planted all over, even up to the Seu Zédo Buritim river spring. Thirty-fve thousand hect-ares o land . . . they sprayed pesticides with a plane.

There used to be deer and other animals in the area.The native auna lived together with the cattle. Butsince they applied the pesticide, every one o themgot killed. . . . The eucalyptus planted over here ismeant or charcoal. It is a disaster or us. They say itprovides jobs, but the maximum is six hundred workplaces in a plantation o 35,000 hectares. And, when-ever everything has been planted, one has to wait

or six years. So, what work does it generate? . . . Weused to produce co ee – the Vera co ee – and pastaand cotton. Several di erent little actories in their suitable regions. Nowadays, there is only the euca-lyptus. It has destroyed everything else. . . . Why dothey come to plant in the land suited or agricultureinstead o more suitable areas? Because there it takesten to twenty years and over here only seven. All thebest pieces o land went to the eucalyptus plantations,pushing the small producers away and destroyingthe municipalities. . . . These companies don’t wantunions. They immediately co-opt the union leadersand they begin to make part o their inner circle o managers and directors. . . . The eucalyptus gives thewater back to the ear th a ter some years. But when itis time to give it back, they plant a new one that willabsorb the water returned by the old one. This newplantation will develop really quickly, because, besidesthe rainwater, it will receive the water rom the oldeucalyptus. . . . they are using the carbon credits toplant these eucalyptus that will grow very quickly.”

Local man who asked or anonymityout o ears or his sa ety

“Eucalyptus has been grown with blood.” Antonio, local armer

So they see the carbon scheme as shoring up an unjust and destructive social arrangement.

Yes. But local residents oppose not only the wayPlantar is trying to get paid or using ormer cerrado and armland or a carbon dump. They also opposethe way the carbon project appropriates alternative

utures that they are pressing or:

“The argument that producing pig iron rom char-coal is less bad than producing it rom coal is a sin-ister strategy. . . . What about the emissions that stillhappen in the pig iron industry, burning charcoal?What we really need are investments in clean ener-gies that at the same time contribute to the cultural,social and economic well-being o local populations.. . . We can never accept the argument that one activ-

ity is less worse [sic] than another one to justi y theserious negative impacts that Plantar and its activitieshave caused. … [W]e want to prevent these impactsand construct a society with an economic policy thatincludes every man and woman, preserving and re-covering our environment.” o

In the ace o all this opposition, how does the project go orward?

The scheme probably couldn’t have got o theground without the help and sponsorship o thePrototype Carbon Fund (PCF) o the World Bank,which would eed any credits it generates to its ros-ter o Northern corporate and government clients.Plantar was the Bank’s frst carbon sink project andthe Bank expects it to “prepare the ground or similar projects in the uture”. 2002 Project Appraisal Docu-ment. Plantar’s carbon scheme also gets legitimacy

rom the involvement o the FSC.

Why is the World Bank involved in such projects?

In brie , to shore up and license the continuation o the ossil uel economy, to please Northern govern-ments, to build a new feld o operations or itsel asan institution, and to make money (see above). That’swhy it helps frms like Plantar do the initial workon a project and promises to provide buyers or thecredits.

And what i Plantar can’t deliver the credits? Suppose the plantation burns down or the project veri ers nd

problems with the carbon accounting?

I less than 70 per cent o the CERs are delivered ontime to one o the project’s buyers, The Netherlands,then it’s the Brazilian “supplier” who has to pay apenalty, not the Bank.

But doesn’t the involvement o the World Bank, as aninternationally reputable development institution, at least guarantee certain environmental standards and

provide sa eguards against abuse o local people?

On the contrary. Many local people eel that theBank’s involvement merely legitimises environmen-tal damage and the intimidation that Plantar usesto control local people – intimidation which, as inThailand, is nowhere acknowledged in carbon proj-ect documents. Many local residents are a raid to letinterviewers cite their names. Some receive deaththreats. When a representative o the Rural Uniono Workers o Curvelo went to the climate negotia-tions in Milan in December 2003 to raise awareness

about the negative environmental and social e ectso Plantar’s operations (which won a special ironicNGO award there or “worst CDM sinks project”),the company’s directors bullied other union mem-



bers into signing a letter o support or the company,threatening massive layo s i carbon credits were not

orthcoming – although one longtime union oppo-nent o the expansion o eucalyptus plantations inMinas Gerais managed to insert an “under pressure”beside her signature.

Unbowed, the local movement has subsequentlyappealed directly to European investors not to putmoney into the Plantar carbon project. Peasant andtrade union representatives travelled to Cologne tointervene in the Carbon Expo trade air held there in

June 2004, in which the Bank participated. p

Throughout the disputes over the carbon project, theWorld Bank has taken the side o Plantar. For ex-ample, in 2003 it posted on its website a letter romPlantar to PCF investors replying to dozens o localgroups, without posting the original letter to whichit was a reply. q

What about FSC? How are they involved?

FSC has certifed only 32,232 hectares o Plantar’soperations – less than 18 per cent o its landholdings.r These hectares are used to produce barbeque char-coal. However, Plantar has not hesitated to announceon its website that certifcation “ensures that our or-est is managed in an environmentally responsible, so-cially benefcial and economically viable way”, giving

the impression that FSC’s certifcate is valid or all o the company’s plantations. It also claims in a letter toPCF investors that “100 per cent o the Project Areais being and will be certifed”. s As in Ecuador, FSCthus has a hand, i only an indirect one, in producinga fctitious commodity claiming to be “carbon”.

Conducting research into the story o Plantar have beenMarcelo Calazans and Winnie Overbeek o the BrazilianNGO FASE-ES in Espirito Santo, assisted by an inter-national team working on carbon trading more generallyincluding, rom le t, Adam Ma’anit and Heidi Bachram o

Carbon Trade Watch, Jutta Kill o Sinks Watch, and BenPearson o Clean Development Mechanism Watch (and now with Greenpeace Australia).



PHOTO ESSAY

Plantar vs. Local People: Two Versions o History

Demonstration in early 2005 against the “green desert”created by commercial eucalyptus plantations established byPlantar and other companies.

LOCALS: Be ore the advent o giant eucalyptusplantations, the geraizeiroso northern Minas Geraisused the cerrado(savannah) or crops, cattle, wild oods,medicines and cra ts. Small and medium-sized com-panies relied on cerradoproducts to manu acture pas-ta, leather, saddles, shoes, cotton oil, textiles, castor oil,textiles, sweets, and liquor and other products o thenative pequi ruit. Rice, beans and maize were plantedand traditional dairy arming and livestock raisingwas practiced. Under the dictatorship, however, landsthat the geraizeiroshad traditionally used and claimedownership over, but which were not ormally titledand were under the jurisdiction o the state ( devolutas lands), were leased raudulently or 20 years to eu-calyptus-planting frms, who also received fnancialincentives. Many rural dwellers were expelled romthe land, while others were persuaded to abandonit by promises o jobs and better living conditions;

still others sold up a ter becoming isolated and seeingtheir water supply dry up or become contaminatedwith pesticides. The cerradowas cut down, felds were

enced and consolidated, and agriculture, stockrais-ing and livelihoods and ood products actories thatdepended on the biodiversity o the cerradocollapsed,leaving many unemployed. Through dispossessionand impoverishment, residents have been orced toaccept low wages and dangerous working conditions,o ten as illegal out-sourced labor, or ee to avelasonthe outskirts o cities, where they are also trappedin a cycle o poverty. Exactly how much o today’sMinas Gerais monoculture eucalyptus plantations areon devolutas lands is disputed. We believe that mostland used by corporations such as Plantar is devolu-

tas. An investigative commission o the Minas Geraisparliament ound that iron and steel companies aswere granted “a large part o the devolutas lands innorthern Minas Gerais”. Whatever the exact fgure,however, the question must be investigated, since ac-cording to Brazilian law, corporations cannot acquirethis type o land, only peasants. By right, such landsshould be given back to rural dwellers and used or land re orm, ood production, and restoration o thecerrado. Many geraizeiroshave brought a case againstthe state over their explusion rom their lands whenthey were expropriated and leased to the companies.They want to convert plantations back into nativecerrado.

Some o Plantar’s plantations rom the air.

PLANTAR: Plantar has never owned nor used anyso-called devolutas lands. It has never contributed tothe eviction o indigenous peoples. Plantar has never placed any constraints on the commercialization o cerrado ruits, on which a ew amilies may rely toearn their living, or on those who collect ruits or subsistence purposes. It is very hard to imagine how

a company that does not occupy more than 4.5 per cent o the Curvelo Township area could cause a cri-sis in the ruit-collecting economy. Besides preserv-ing both legal reserves and permanent conservation



areas, Plantar also contributes to the conservation o traditional species o the cerrado. Anyway, the areaswhere Plantar works are not economically depen-dent on cerradoproducts but on cattle-raising. Thishas heavy environmental impacts, adds little value,and creates ewer employment opportunities thanare created by the orestry industry. For example, inFelixlândia, Plantar acquired a ormer cattle-raising

arm which did not provide more than 20 jobs. Inthe same area, we currently have almost 300 perma-nent employees. In Curvelo, Plantar provides morethan 1000 direct jobs, not to mention indirect fgures.Plantar has not caused massive job layo s and hassignifcantly expanded due to orestry managementservices provided to third parties.

LOCALS: The 4.5 per cent fgure doesn’t includeother companies’ eucalyptus plantations in Curvelo,including those o V&M Florestal and Cossisa. In, anycase knowing that Plantar has covered 4.5 per cento the municipality with eucalyptus does not changethe plantations’ impacts on the lives o people nearby.Plantar’s comparison between the 20 workers on a

ormer cattle ranch and the 300 workers workingthere now is misleading. No local people were in acthired, increasing unemployment in Felixlândia. Inaddition, while eucalyptus plantations may provideemployment during the frst two years in preparationo the land, planting, pesticide application, or irrigation, they provide very little work during the

subsequent fve years be ore cutting.

It’s true that local people do not use cerrado areasunder Plantar’s control or ruit collection. These areasare very small and o er little. But local communitieshave su ered rom the Plantar’s restrictions on their tradition o letting their cows graze reely. Plantar has put cattle in enced areas or taken them away toanother area without in orming the owner. This hasled to cases o lost cattle. Land re orm and small-scaleagriculture are the only ways o creating a uture or the Brazilian rural population. Yet tree plantationsonly worsen the unequal distribution o land in thecountry. In Espirito Santo, eucalyptus plantationsexpelled thousands and thousands o people intothe poor neighbourhoods o urban centres and anuncertain uture. Converting the 23,100 hectareso the Plantar project to small-scale diversifed andecological agriculture would create at least 23,100more human- riendly jobs, with salaries at least our times higher than those o the majority o Plantar workers, according to the concrete experience o the local Movimento dos Pequenos Agricultores(Movement o Small Peasants). The Movimento isalso developing an alternative re orestation project,

using not eucalyptus but tree species with multipleuses and local environmental value.

Harvest time on Plantar’s plantations.

LOCALS: What with the eucalyptus industry’strans ormation o local rural economies, peopleo ten have no economic options other than smallscale charcoal production, and build clay ovens in

the cerrado or the purpose. Collecting commercialeucalyptus is against the law, however, so independentproducers o ten burn what’s le t o native trees, andthe resulting charcoal is o ten eventually purchasedby the corporations. Companies still use around 15-20 per cent native cerradocharcoal. They deny thisin spite o the existence o receipts showing their purchase o charcoal made rom native wood.

PLANTAR: The use o charcoal made out o native vegetation is a reality that bothers pig ironmanu acturers, environmentalists and authorities.

That’s why it’s a goal o the Plantar project: to establishsustainable plantations, capable o supplying 100 per cent well-managed eucalyptus plantation charcoal

or pig iron manu acturing, thus curbing negativeimpacts brought by the use o native vegetation.

Forest clearance or Plantar plantation.

LOCALS: Plantar also continues to destroy cerrado directly in order to use the land or plantations. For instance, Plantar bought cerradolands in the CampoAlegre and Paiol communities and planted eucalyptus

on it. As late as 2000, Plantar was elling cerrado inLagoa do Capim.156 In December 2002, Plantar land was also cleared at the river spring o Pindaíba.Native tree trunks can still be seen there. Dozens o



municipalities have declared a state o emergencyover water. Near Paiol de Cima, one stream hascompletely dried up a ter having previously owed11 months o the year. In Felixlândia, a spring calledCabeciera do Buriti is degraded. Flows in the Buritiriver are down and herbicides have been appliedwithout consultation with local people, killing fshand birds. Plantar has planted eucalyptus at river springs, drying them up and also contaminating themwith pesticides that kill animal li e in the streams.Plantar’s contamination o local drinking water sources with pesticides has also caused the death o many emas, large land birds related to ostriches. Thecommunities o Cobú, Paiol de Cima, Canabrava andBoa Morte have been orced to dig artesian wells.Cattle ranching does not cause such negative impactson water, and produces a greater diversity o goods,including meat, milk, leather and manure.

Plantar eucalyptus plantation with dead native buriti tree in oreground.The buriti is a symbol o the cerrado regionwhose wide river basins it thrives in. The tree needs a lot o water to survive, and its demise shows that water levelshave dropped.

PLANTAR: We have been accused o drying uprivers, but in act some streams dry up naturally

or a ew months, due to the seasonality o rain allnormal to the cerrado.They recover later. O course,as with any ast-growing species, eucalyptus needs

underground water. Nevertheless, scientifc studieshave shown that, as long as proper management iscarried out, as Plantar does, eucalyptus plantationsdo not reduce water supply to specifc regions.Many traditional cultures, as well as careless grazingpractices, are more harm ul to hydrological systemsthan eucalyptus plantations.

Dried-out swamp orest near abandoned arm, October 2003.

LOCALS: A Minas Gerais ParliamentaryInvestigation Commission ound in 2002 thatPlantar was practicing illegal outsourcing o labour that negatively a ected the sa ety and livelihoods o charcoal workers. It cited “precarious labor relations,abominable working conditions, slave and child labour and de orestation o the cerrado” as well as “in amous”

wage levels. It also ound problems with housing,hygiene, drinking water, ood, transport and notedthat Plantar was in breach o International Labour O ce provisions regarding reedom o trade unionorganizing. The Federal Public Ministry o Labour has sued Plantar or illegal subcontracting and orcedit to sign an agreement to change its behaviour, whichwas subsequently ound to be not in compliance.During the 1990s, the Montes Claros Pastoral LandCommission, a church-related organization, alsoverifed the existence o slave labour on Plantar property. In March 2002, the Curvelo RegionalLabour O ce (DRT) issued Plantar with a summons

or using slave and child labour in timber extractionand charcoal production and fned the company a ter fnding 194 workers without any registration on itsplantations in Curvelo. t



Quilombola charcoal workers.

PLANTAR: Plantar has never used child nor slavelabor. Our working conditions are in complete ac-

cordance with labor laws. Besides complying withForestry Stewardship Council standards, the compa-ny is requently audited under its ISO certifed qual-ity management system and is certifed by ABRINQFoundation as a “company riend o children”.Representatives rom the Intergovernmental Panelon Climate Change have visited Plantar’s acilities.Plantar may have been cited over working condi-tions by a Parliamentary Investigation Commission(along with every other company in the sector),but no irregularities were ound. The company is abenchmark or providing benefts or its employeesincluding occupational health care, hal scholarships

or all employees rom basic education to graduatedegrees, ree meals and ood supply kits to lower-income employees, etc. Instead o undertaking a legaldispute with the Curvelo Regional Labour O ce(DRT) a ter being cited over outsourcing, Plantar hasalready agreed to manu acture charcoal with its ownwork orce.

Plantar charcoal ovens.

LOCALS:Plantar’s agreement to manu acturecharcoal with its own work orce needs to be evaluated

to see whether it is really improving conditionsor workers, who in general earn a maximum o

only US$100/month. As unemployment is ri e,most workers are rightened o mentioning anyproblem that occurs, including the creation o new contracting companies nominally part o Plantar with names like Plantar Energética. Plantar charcoal workers are continuously exposed to smokecontaining toxic gases as well as pesticides and areat a high risk or accidents. In Espirito Santo, theAttorney General or Workers Conditions openeda confdential investigation in 2001 a ter the deatho several ormer Plantar workers. One, Aurino dosSantos Filho, died with a pump flled with pesticideson his back while working on a eucalyptus plantationin Espirito Santo in 2001; he was only 34 years old.Aurino´s amily has not received any compensation

rom the company. Plantar does nothing or workerswho become disabled as a result o their work or the company; many have already died. Plantar makeslabour organizing di cult by rotating workersamong ar ung sites. Worker leaders are registeredas “urban labourers” to prevent them rom becoming

rural union members.



Jorge, a ormer Plantar worker: “When I started working at Plantar I was OK. One day I ainted a ter lunch. I was already applying the insecticides, ungicides. I had headaches, I elt weak. My superior told me, ‘I am ring you because you don’t know i you are sick or not.’ Six or

seven people died. Plantar said it was heart ailure. Now I’m unable to work. I don’t dare eat the sh rom the streams here.”

LOCALS: When it built a new tree nursery, Plantar,without consulting local inhabitants, diverted a roadthat has always been used by the communities o Paiol de Cima, Meleiros, Cachoeira do Choro, Paiolde Baixo, Canabrava, Gomos and others, extendingtravel distances or local inhabitants, including 900students rom the Serfo Eugenio School, by morethan fve kilometers. Plantar also dammed up the localBoa Morte river to supply the nursery with water,as well as polluting water with ertilizers and other agrochemicals, causing complaints rom downstreamwater users.

A local leader o an environ-mental NGO received anon-ymous deaththreats over the telephone a ter criticizing Plantar.

PLANTAR: The detour has not caused any damageto local people. The original route is still there andcan be used by pedestrians, cyclists and horse riders.Vehicle tra c has been diverted to prevent seedlings

rom being a ected by dust, and drivers pre er totake the detour anyway because the road is o better quality. Public and school buses no longer get stuckin the mud during rainy periods.

Quilombola charcoal worker.

LOCALS: In 2003, the old road was enced o ,making it impossible even or pedestrians to use.Even or anyone daring to jump the ence, the road isunusable, since it is blocked by the company’s nursery.School buses never had problems with the old road.

With the help o Carbon Trade Watch, di erent generations(above and next page) learn how to lm their struggle toshare with outsiders, including communities near a BP re nery in Scotland. The carbon credits BP obtained romPlantar and other carbon projects would allow it to maintainhigh levels o ossil uel pollution in Europe.





Most o the photographs and in ormation in this section are

courtesy o Tamra Gilbertson o Carbon Trade Watch and orm part o an international exhibition developed by her on the Plantar case.

(Endnotes)a Ecosecurities and Prototype Carbon Fund, Baseline

Determination or Plantar: Evaluation o the EmissionsReduction Potential o the Plantar Project , fnal version,World Bank, Washington, March 2002, p. 25.

b Op. cit., p 26.c Werner Kornexl, “Environmental Assessment o

Plantar Project / Minas Gerais”, World Bank, Washing-

ton, 18 October 2001, available at www.carbonfnance.org.d Ecosecurities and Prototype Carbon Fund, op. cit. su-

pra note 1, p. 49.e Scientifc Certi ying Systems, “Sumario Publico 01

– Plantar S. A.”, Oakland, 2001. See http://www. ao.org/DOCREP/003/y3198E/ Y3198E07.htm

g Scientifc Certi ying Systems, op. cit.h Greenpeace submission on the proposed Plantar CDM

project; www.prototypecarbon und.orgi Suptitz, A. P. L. et al., Open letter to CDM Executive

Board, Minas Gerais, June 2004. j Ecosecurities and Prototype Carbon Fund, op. cit. su-

pra note 1, p. 77.k V&M avoided uel switch rejection.l United Nations Framework Convention on Climate

Change, “Report o the Eighth Meeting o the Meth-odologies Panel”, Bonn, November 2003, p. 3, http://cdm.un ccc.int.

m FASE et al., Open letter to those responsible or,d i ti i th P t t C b F d (PCF)

n For urther detail on the negative impacts o theseplantations, see World Rain orest Movement, Certi ying the Uncerti able , World Rain orest Movement, Monte-video, 2003, available at http://www.wrm.org.uy

o FASE et al., Open Letter to Executives and Investorsin the PCF, 23 May 2003, available at http://www.sinkswatch.org..

p Robin Wood, “Stop Plantar!”, press release, Cologne, 9 June 2004, available at http://www.sinkswatch.org.q See http://www.cdmwatch.org.r Scientifc Certi ying Systems, Sumario Publico 03

– Plantar S. A., Oakland, 2003.s See http://www.cdmwatch.org.t Jornal Estado de Minas, 4 April 2002, p. 13.