Carbon scam: the Noel Kempff project in Bolivia

Greenpeace recently released a report which illustrates clearly why REDD offset projects will neither address climate change nor stop deforestation. The report, “Carbon Scam: Noel Kempff Climate Action Project and the Push for Sub-national Forest Offsets”, looks in detail at the Noel Kempff Climate Action Project in Bolivia.

The report questions the claims made by the project developers about leakage, additionality, permanence and the ability of the project developers to measure accurately the amount of carbon stored in the forest. In the twelve years of the project, estimates of the emissions reduction have fallen almost 90%, from about 55 million to 5.8 million metric tonnes of CO₂.

The project started in 1996, when The Nature Conservancy and Fundación Amigos de la Naturaleza (FAN) created the Noel Kempff project. The following year, the Bolivian government signed an agreement with three massively polluting energy corporations: American Electric Power (AEP) BP-Amoco (BP) and Pacificorp. Under the agreement, the corporations would pay to protect almost 650,000 hectares of rainforest for 30 years. In return, the carbon offsets generated allowed the companies to continue polluting.

The Noel Kempff project is one of the best known “avoided deforestation” projects in the world. On its website, The Nature Conservancy claims that the project is “An example of REDD success” that “simultaneously addresses climate change, conserves biodiversity and brings sustainable benefits to local communities.”

Roman Czebiniak, Greenpeace international’s Political Advisor on Climate Change and Forests, is a co-author of the Greenpeace report. “This report should end any talk that sub-national carbon offset projects can be used to reliably cut carbon emissions,” he said in a Greenpeace statement. “The idea that companies could continue burning oil and coal so long as they set up a park in developing country sounds ludicrous. We have shown that it is ludicrous on paper as well.”

The Noel Kempff project is extremely weak in several areas. The project investors used an estimate of 15% for project leakage in submissions to the UNFCCC and the US Congress. Yet Greenpeace points out that a 2002 report by Winrock International estimates that project leakage could be as high as 42-60%. Leakage is only measured on one area south-west of the project. Leakage elsewhere is simply ignored, although, as Greenpeace drily notes, “the impacts to the atmosphere would be identical to leakage occurring in the limited areas where it is monitored.”

The third party auditor of the project, SGS, was suspended by the UN in September 2009, as a result of being unable to prove that its staff had properly inspected the projects it was accrediting for carbon trading or even that the staff were properly qualified to do so.

In 1996, a new forestry law was passed in Bolivia, which changed the economics of logging, leading to a 75% reduction in the area of land under concession in the country. Greenpeace notes that this “undermines the arguments that [the project’s] additionality can be proven in a measurable, reportable, and verifiable manner”.

Permanence is almost impossible to guarantee, for the simple reason that it involves predicting the future. Drought, forest fires, forest die back, pest infestation, disease or political changes could all have a dramatic impact on the forest in the project area. In a rapidly changing climate such threats to the forest become more likely to happen. If AEP, BP-Amoco and Pacificorp have already used the project to offset their emissions and the forests were to be destroyed, this would double the volume of CO2 emissions. Between 1997 and 2004, Greenpeace found that AEP, Pacificorp, and BP reported about 7.4 million tons of carbon offsets from the Noel Kempff project to the US Department of Energy. This is considerably more than the amount verified for the 30 year project: 5.8 million tons. Greenpeace explains that the investors “may have claimed millions of tonnes of CO2 emissions reductions that never occurred”.

The Nature Conservancy claims to be working with and providing benefits for local communities. Greenpeace also questions these claims. One villager told Greenpeace about a herd of cows the project provided in an attempt to provide “alternative livelihoods” for the community. Unfortunately, the cows were European and unable to survive in Bolivia. “They all died in the end,” the villager said. “The cows were so expensive that a whole herd of local breeds could have been bought for the price of a single one.”

Meanwhile, between 1998 and 2009, electricity utilities in the US have spent a staggering US$1.16 billion lobbying the US Congress on issues such as carbon trading and offsets. In 2008, AEP spent US$11 million lobbying Congress.

“In order to protect the climate we need to stop burning coal and stop burning down our forests – not do one at the expense of the other,” Greenpeace’s Roman Czebiniak said. “The objective of a REDD mechanism is to establish a means for the international community to make substantial advances in fighting climate change by stopping deforestation. REDD is not meant to provide low-cost, low-quality ‘sub-prime’ carbon offsets to oil and coal companies, or to create a new playground for banks and carbon traders.”

In a response to the Greenpeace report, The Nature Conservancy makes a pathetic attempt to brush off the criticism: “Getting REDD right and doing it at national scales is essential for making forests a part of the climate solution. The Nature Conservancy is proud to have had the courage to take the first steps with the Noel Kempff Climate Action project.”

Greenpeace has exposed the Noel Kempff project for what it is: a carbon scam. The purpose of the project is to allow pollution to continue in the US. That much is blindingly obvious from what American Electric Power chief executive Michael G. Morris told the Washington Post: “When Greenpeace says the only reason American Electric Power wants to do this is because it doesn’t want to shut down its coal plants, my answer is, ‘You bet, because our coal plants serve our customers very cost-effectively.'” We would perhaps not expect anything else from the biggest coal-burner in the US. But the Nature Conservancy is supposed to be an environmental organisation. It has been caught REDD-handed, aiding and abetting a climate crime.