Rainforest Politics & the Carbon-Credit Trade in PNG: An Essential Introduction

Since Papua New Guinea’s Special Envoy on climate Change to the United Nations, Dr Kevin Conrad, leaned into his microphone at the December 2007 UN Climate Change Conference in Bali and told the United States,”If, for some reason, you’re not willing to lead, leave it to the rest of us, please, get out of the way!“, PNG has been accoladed as a world leader in promoting international discussions on Reduced Emissions from Deforestation and Forest Degradation (REDD).

And indeed, for a number of years now, PNG has been at the global forefront of promoting the idea of using carbon trading to slow the alarming pace of tropical forest destruction in developing countries. At the United Nations Climate Change Convention in Montreal in 2005, PNG and Costa Rica, on behalf of the newly formed Coalition for Rainforest Nations – a group of (then) 10 developing countries with tropical rainforest resources – proposed that parties to the UN Framework Convention on Climate Change (UNFCCC) address emissions from deforestation and create incentives to reward developing countries for bringing these emissions under management.

PNG’s argument, and that of the members of the Coalition for Rainforest Nations, is that they should be compensated for the services rainforests provide the rest of the world. The main premise for this argument is that as developing nations, they cannot be expected to forfeit income from economic activities that result in deforestation, especially while other countries benefit from forest services including carbon storage, water filtration, biodiversity preservation, fisheries protection, and climate regulation. If global powers want to preserve these valuable services afforded by rainforests, then they are going to have to pay – hence the idea of a global carbon-credit trading scheme.

In PNG, Sir Michael Somare and his Government have been hard at work in promoting and facilitating REDD discussions on a national level. In March 2008, he co-signed the Papua New Guinea – Australia Forest Carbon Partnership (PNGA FCP) in Port Moresby which aims to address REDD while improving the livelihood of forest-dependent communities and promoting biodiversity protection. The PNGA FCP has three initial areas for collaboration: 1) Policy dialouge, 2) Forest carbon monitoring and measurement, and 3) Participation in global carbon markets.

In June 2008, the Grand Chief appointed his chief-of-staff and economic adviser, Dr Theo Yasause, as head of the newly formed Office of Climate Change and Carbon Trading (OCCCT) as part of PNG’s push for cleaner and greener environmental policy. One of the first assignments of the OCCCT was to provide a Readiness Plan Indicative Note or “R-PIN” to the World Bank’s Forest Carbon Partnership Facility (FCPF) – the proposed avenue of funding (made up of two new financial mechanisms) launched at the conclusion of the 2007 UN Climate Change Conference in Bali to fund Reduced Emissions from Deforestation and Degredation, i.e. REDD.

Now, here is where the first major flaw in the FCPF lies. Despite the fact that the FCPF was launched in Bali in 2007, the FCPF Charter (the foundational legal document of the Facility) still remained in draft form. One other major issue is that the World Bank held meetings to share information about the Facility with indigenous peoples only after the launch of the FCPF and only after the drafting of its legal Charter – there was no consultation with indigenous peoples before the actual launching.

When the OCCCT completed PNG’s R-PIN it was not at all surprising to me to discover that the Office had also neglected to consult with the landowners of PNG who own 97% of PNG’s rainforests. In the external review of PNG’s R-PIN (which was officially written by the DEC, PNG Forest Authority and the OCCCT) it is noted that:

“1) There was no consultation process organized in the preparation of the R-PIN, neither forest owners, NGOs nor private sector representatives have been involved in the preparation of the R-PIN.

2) The ‘donor engagement partnership forum’ that has been established to support CC activities in PNG is not listed as having been consulted. The authors should consult one or more financing agencies since they can offer advice on appropriate ways to channel REDD funds to key stakeholders.

3. Representatives of rural communities who own local resources, and academic institutions who can help with inventory and monitoring activities are not listed as having been explicitly consulted in the process.

4. To conclude, it is difficult to know to which extent the proposal is owned by a variety of stakeholders”.

Despite this, PNG’s R-PIN has already been approved by the World Bank, thus undermining the Banks’ claim that all plans for the FCPF would have to be subject to wide consultation. PNG is not the only country which has fast-tracked the application of its R-PIN at the expense of NGO and indigenous landowner participation, simply so that it can enable itself to qualify for the ‘Readiness Fund’ – one of the FCPF’s new financial mechanisms. Under this fund, US$ 100 million will be available for REDD country participants – those countries (i.e. governments) which have developed their required national REDD strategy, monitoring system and baselines.

So, what does this mean? Well, it raises a number of issues and presents a number of questions that need to be answered. One important issue has already become a problem. In October 2008, it was reported in the Post-Courier that the PNG Government was “grabbing the last tracts of virgin forests for the proposed REDD projects” and that “such ‘forest grabs’ by the State might lead to future conflicts if landowner’s equity interests were not properly catered for“.

This problem is a muddy reflection of the biggest issue concerning the global carbon-credit trade in PNG: How exactly is the OCCCT going to ensure that the small people who own 97% of PNG’s rainforests will rightfully benefit from this undertaking – particularly when these very stakeholders were left out in the cold when it came to formulating PNG’s R-PIN?

Thomas Paka, PNG’s Eco-Forestry Forum Executive Director, summed it up well when he commented on the PNG-Australia Carbon Partnership:

“Although it’s good to see the government promoting sustainable management of forests, a number of issues remain outstanding. Issues like consent from the landowners, how the benefits will be shared, what mechanisms will be available for the trickling down of any benefits from carbon trading – going down to the people. So apart from the conservation, we’re now more focussed on how these benefits are going to be distributed – and given the mismanagement of large sums of money by PNG’s National Fisheries and Forest Authorities, there’s no guarantee that this new mechanism will benefit local people.”

On 7 November 2008, Sir Michael Somare presented a lecture to the Lowy Institute as part of the think tank’s Distinguished Speaker Series. The topic of that lecture was ‘Pacific Regional Challenges’ and in it he presented a number of interesting points regarding climate change and PNG. One such point is that, according to the Intergovernmental Panel on Climate Change (IPCC), forests may sequester over 3.3 billion tons of CO2 annually and with todays’ carbon prices around US$33/tCO2, the rural communities owning most of them are effectively subsidizing the rich by $100 billion per year (Note: the current market value for carbon varies considerably around the world. A hectare of rainforest, if left intact, could be worth anywhere from US$400 – $8000 or more).

Apart from demanding a global paradigm shift in the way the world thinks of the Earth’s intricate ecosystem services as being “free”, Sir Michael also revealed that he is determined to find out whether PNG can energize our future economic growth 100 percent from renewable energy, and if so, to become ‘carbon neutral’ before 2050 while at the same time expanding our GDP per capital at least 10 fold.

It is somewhat comforting to see that a visionary leader such as Sir Michael has thrown his support behind seriously addressing climate change within PNG. However, it is essential that his Government, in looking at tapping into what is predicted to become a multi-billion dollar industry, NOT lose focus of the small people of PNG and the direct effects that climate change has on them now.

Finally, one of the mandates of the OCCCT is to “lead the development, comercialisation and management of carbon trading rights for the Government and people of PNG, and to ensure that the PNG community fully benefits from these schemes“. I really do hope that the OCCCT truly follows that mandate to the letter – for the sake of the people of Papua New Guinea.

~ by Tavurvur on February 6, 2009.