Carbon Planet’s Dave Sag on carbon trading in PNG

PHOTO Credit: Dave Sag.

A fascinating discussion is going on at “the Masalai blog” about carbon trading in Papua New Guinea. It is particularly interesting because Dave Sag, co-founder and Executive Director of Carbon Planet has answered some of the accusations against his company.

Sag is a software programmer, who has found himself “at the forefront of Internet software development since 1993,” he writes on his website. In 1998, he won an Australia Day Council Award for services to Australian Business. He was nominated as one of Australia’s top 40 achievers under 40 years of age. Sag describes himself as “a serial entrepreneur. Right now my main focus is saving the world via Carbon Planet”. He’s even had his photograph taken with Al Gore.

I’ve extracted a series of questions and Sag’s answers from the blog discussion, below. Please visit the Masalai blog for the full discussion.

It has been stated that you have 25 carbon contracts from PNG. Where are these from and what economic vehicle are the landowners using to engage with Carbon Planet? (e.g. have they formed companies to help invest that money)

Dave Sag: Unfortunately I can’t answer most of this question immediately as there are issues of commercial confidentiality but rest-assured all of the projects we are working on will be highly public, with full details of the areas, the stake-holder consultation that has taken place, and the financial distribution models all being a core part of the project. Under the VCS rules however most of the money must go to the asset owners, ie the people who’s forests are being preserved.

If there is to be a carbon offset scheme, shouldn’t it be directly with the people that OWN the forests concerned? Why should ‘brokers’ or Governments get the money? Plus it needs a proper regulatory and governance structure to make sure it is all above board – which isn’t in place yet ANYWHERE in the world, let alone PNG.

Dave Sag: It’s a very difficult thing building a successful REDD project and very few people in the world, let alone in PNG, have the skills, the science, the money and the motivation to put such a project together properly and to get it registered with the VCS, and to then sell those credits in a time of financial uncertainty. We’ve been working on this and other projects for two years, spending our own money to make sure these projects are done properly.

Carbon Planet is committed to the idea that the people of PNG should be paid properly for the environmental services their forests provide, and that the income from those services should be greater than the income otherwise obtained by tearing those forests up. Don’t believe the ignorant nonsense you read in the popular press. Who is behind those stories ask yourself?

What is Carbon Planet’s strategic position while the policies and legislation for carbon trading is yet to be approved?

Dave Sag: No country in the world has formal REDD rules approved yet and the world is counting on negotiations at Copenhagen this coming December to formalise much of the REDD project rules such that REDD credits will, with some luck and political will, be able to be used in part to meet countries’ national emissions targets. In the meantime there are however organisations like the Voluntary Carbon Standard and others who have pushed ahead to define comprehensive mechanisms by which project developers can begin developing REDD style projects that produce credits that can be traded in the voluntary carbon markets, ie to parties that want to reduce emissions but that do not have formal emissions targets imposed upon them.

With reports that Carbon Planet will be making estimated annual sales of $1 billion, what percentage of this income is being retained by landowners?

Dave Sag: Just to keep some perspective here, the vast majority of the money from the REDD projects we are working on in PNG will flow to the landowners themselves. Carbon Planet has not lied, bribed anyone, paid any money to the PNG Government and so on as alleged and implied by a couple of journalists who, themselves, admit they don’t really know what they are talking about. Those allegations are sheer nonsense and, if true would undermine the very credits we are working hard to generate. No-one would buy the credits if they were dodgy.

While there will be billions of dollars in REDD credit sales from these projects, as I said before, most of that money will go to the landowners, not to Carbon Planet. The exact % that goes to land-owners will be outlined in the project documentation which will be a public document. CP is not “making billions” from these deals.

PNG has a long history of landowners receiving money through mining dividends and squandering it. Will Carbon Planet be also educating landowners on how to use their money?

Dave Sag: This point is fair and is certainly something that concerns us very much. How the money is disbursed is a large part of the complexity of the project and we are working very hard to make sure it’s right. But until the details are made public it is not appropriate for me to give my opinion on how that should happen.

Is there an education component to your carbon trading in PNG and if so how is that conducted?

Dave Sag: Yes absolutely and in fact we have been doing quite a bit of that sort of thing, not just in PNG but all over the work we work hard to educate people about the science behind climate change, the mechanisms by which the world is responding and the changes that must happen to the economy to transition the planet to a fairer, cleaner more universally prosperous world.

For us it’s a real concern if people think we are just like some evil mining or logging company coming in to exploit the locals; our real intentions are totally opposite to that. I’m not going to just say “trust me” though because I know trust has to be earned, but please at least give us the chance to earn that trust before you write us off as a bunch of corporate carbon colonialists.

How can you demonstrate, to a cynical world press, that you have the commercial rights to trade Carbon Credits on behalf of PNG? And that you have Land Owner support for any such venture?

Dave Sag: When we started working on PNG REDD projects we knew they would attract all sorts of attention from people both supportive and hostile to the projects. Obviously there are vested interested that seek to stop REDD projects because they like, and profit from, the status quo. We also knew that the media, by and large, don’t understand the finer points of either carbon trading, forestry laws, or, quite frankly, working in PNG.

These points are essential parts of the VCS process and the detailed evidence of commercial rights, powers of attorney and stake-holder consent will be a public part of the final project documentation.

How can you demonstrate that your projects can be “realised” given that PNG has no policy (yet), and the OCC&CT is embroiled in controversity?

Dave Sag: This is the topic of much confusion. The OCC is what’s called the Designated National Authority in terms of carbon deals, and, by and large it appears that the controversy you refer to has been a result of ignorant reporting rather than any actual misconduct.

How do you respond to the reports of legal issues with your first “trial” Project in Kamula Doso?

Dave Sag: We have checked and rechecked and, to our knowledge, there are no legal impediments to any of the projects we are involved in. There’s a lot of gossip, allegations and so forth, with people claiming to have seen documents that claim to show some sort of injunction over the KD area, but those documents are, according to our best advice, meaningless. We, and our project partners would not have invested this much time and money on projects with huge legal questions hanging over them. That makes no sense.

The press seem to have new issue every day, obviously becasue PNG is at many levels not behind carbon Trading.

Dave Sag: Of course a vigourous and well informed media is a vital watchdog on political and corporate activities and I would not wish it to be any other way. Indeed I wish the press had more teeth at times. And I wish they’d learn a bit, or a lot, more about the topic before charging in, rich with ‘good intentions’ for the people of PNG, but spouting off all sorts of nonsense.

Alas CP has no control over what gets reported. Even if you compare stories about our recent merger announcement you’ll see some writers say one thing, some say a different thing and most of them get the number confused. It’s amazing since, in that case the whole story was on a press release written down for them.

It’s been a long time since I believed what I read in the papers or what I see on TV.

Carbon Trading will benefit the people of PNG immensely. It represents a massive economic shift. People are genuinely sceptical of carbon trading right now because the money is not real for them. When people start to bank real money earned from managing and preserving their traditional forests do you imagine they’ll want to keep hacking them down?

How do you know that the overaching legislation that will finally be agreed on will actually support the structures you are currently putting in place? If it doesn’t and you have to start from scratch again, how do you justify the commercial merits of your actions to your shareholders?

What’s the rush Sir? We in PNG are not desperate for your services.

Dave Sag: Every minute of every day an area of rainforest the size of a standard soccer field is destroyed. Deforestation accounts for nearly 20% of all greenhouse gas emissions. Many people who work in logging camps are kept in virtual slavery and sexual predation and systemic violence are routine in such camps. Delays to these project cost lives, money and the health of the planet. Every month of delay means more lives lost, more forests removed, species wiped out, and more environmental harm to clean up later. It takes a new forest 100 years to capture back the CO2 from an existing forest.

You may not be desperate for our services but plenty of people are.

I don’t think Carbon Planet could really be any more transparent about its dealings, especially in light of the fact that, once the projects are formally registered, all of the project details, in the form of formal PDDs (Project Description Documents) will be available for public comment and scrutiny via the VCS. Those documents go into a huge amount of detail about the project areas, legal basis for the projects, the evidence of landowner consent, approval from government, the lot. If you are interested, go check out the PDDs of some of the other projects on the VCS website and see for yourself the sort of detail they require.

What piece of legislation, either in PNG or internationally, gives rise to all this nonsense?

If none, then all you foreigners have colluded with CORRUPT PNG officials to undermine PNG’s governance systems by second guessing legislation and pre-empting the process by coming up with stupid business plans and schemes that have no legal basis. In the absence of legislation, the whole thing is a SCAM and must stop. NOW!

Dave Sag: PNG is a ratifying nation of the Kyoto Protocol and is not required to establish its own emissions trading scheme or anything like that in order that its citizens convert forestry projects into REDD projects.

It is a requirement of the VCS that we demonstrate national approval of the project through through PNG’s Office of Climate Change and Environmental Services (OCCES) which is the Designated National Authority (DNA) for carbon projects in PNG. We must also demonstrate that the 50+ Incorporated Landowner Groups (ILGs) genuinely desire that the project go ahead.

In terms of our legal authority to operate, the laws we cite specifically in the Kamula Dosa PDD are:

• The Fairness of Transaction Act 1993

• The Companies Act 1997

• The Investment Promotions Act 1992

• The Land Act (Customary Land Ownership) 1974

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As the person (who calls himself Ananda Dave) who asked this question points out, none of this legislation relates specifically to REDD:

I note you alluding to PNG as a signatory to the Kyoto Protocol, but I thought Kyoto just established a broad understanding on how climate change issues should be handled. The specifics should hopefully materialise in Copenhagen or some other forum. Without knowing what those specifics are, I do not take any comfort in that response at all.

Sag did not answer the following questions, which were posed by Australian Associated Press journalist Ilya Gridneff:

1. Regarding the controversy surrounding the Office of Climate Change, you state, “The OCC is what’s called the Designated National Authority in terms of carbon deals, and, by and large it appears that the controversy you refer to has been a result of ignorant reporting rather than any actual misconduct.” You appear to know what happens inside the OCC – how did you get such an insight into the mechanics of a government body? Are you saying the investigation will provide no evidence of misconduct? Can you expand on this point and/or get in contact with the investigators to protect the innocent from this witch hunt.

2. Kirk Roberts, who runs Nupan Trading, continues to claim he has the Kamula Doso landowner all signed up and ready to go forward with carbon trading through Carbon Planet. Can you explain why or which PNG law gives the power to the now suspended Dr Theo [Yasause] to one month before officially becoming the OCC director (when he was still the Prime Minister’s chief of staff) to issue a mandate to Nupan to trade in carbon?

3. Can you explain why Roberts this month writes a letter to Mr. Wisa Susupe, from Kamula Doso: “We confirm that the independent verification process to enable your Project to be formally recognized under the UNFCCC guidelines for REDD Carbon Credits is now well underway.”

Can you provide us all with UNFCCC guidelines for REDD Carbon Credits along with details of the independent verification process?

REDD-Monitor has sent these three questions to Dave Sag and looks forward to his response.