Congo’s forest ‘emissions reductions programme’: Germany, Norway and UK taxpayers paying for nothing
Congo’s forest ‘emissions reductions programme’: Germany, Norway and UK taxpayers paying for nothing
As the World Bank-backed Forest Carbon Partnership Facility produces only ‘hot air’ emissions reductions.
By Simon Counsell
A $40 million deal to supposedly reduce carbon emissions from deforestation and forest degradation in the Republic of Congo was finally approved by the World Bank in 2021. The Bank’s Forest Carbon Partnership Facility (FCPF) claims this will reduce forest carbon emissions in the country by more than eight million tonnes. But closer scrutiny shows that probably no additional carbon savings will result from the programme. The money will mostly go to large logging and palm oil companies for doing nothing whatsoever.
The FCPF’s long and expensive road to achieving zero additionality
The Forest Carbon Partnership Facility was conceived and launched by the World Bank in 2008. The idea was that grants from a ‘Readiness Fund’ would help countries ‘get ready’ for large REDD+ projects, and then a ‘Carbon Fund’, the second part of the Facility, would pay countries for slowing deforestation and forest degradation by ‘purchasing’ reductions in forest carbon emissions. The Facility was funded with $1.3 billion in commitments from 17 donor governments, though more than 90% came from just three: Germany (37%), Norway (34%) and UK (20%).
By 2021, according to the FCPF’s annual report, more than $314 million had been spent on ‘REDD readiness’ in nearly 40 countries, as well as another $47 million in running the Carbon Fund. But only four countries had progressed to having an agreement with the FCPF to sell ‘emissions reductions’, and none had actually received any payments. In 2021, thirteen tortuous and expensive years after the FCPF’s launch, the World Bank hustled through deals with another 10 countries for forest emissions reductions purchases, before finally drawing down the shutters on any more countries entering the programme. Among the last batch was the Republic of Congo.
Congo’s ‘emissions reductions’ – banking on loggers and palm oil developers
By last year, $8 million had already been spent by the FCPF on ‘REDD-readiness’ in the Republic of Congo. In April 2021, an Emissions Reduction Purchase Agreement (ERPA) was then signed for up to 8,349,000 tonnes of ‘reductions’ at US$5 per tonne. The agreement applied to the years 2019-2023, so two of the years covered were already retrospective payments. As with all the FCPF REDD+ programmes, Congo’s is designed to apply across a wide ‘jurisdictional’ area – Congo’s two northernmost, and heavily forested, departments of Likouala and Sangha (see Map 1), together about 121,000 square kilometres (about the size of England). Much of the area has long been carved up into large-scale logging concessions, strictly protected areas (most of which have been implicated in eviction and abuse of local communities) and more recently oil palm plantations. Since 2013, parts of the area have also progressively been allocated to oil companies as exploratory concessions, though none have yet struck deposits or started production.
The Congo Emissions Reduction Programme (ERP) is described in a monster 337-page programme document. This claims that forest carbon emissions will be reduced by:
Promoting ‘reduced impact logging’ and by shifting forest from ‘to-be-logged’ to protected forest, i.e. establishing set-aside areas inside logging concessions;
Reducing emissions from deforestation in palm oil concessions;
Improving local peoples’ livelihoods and providing alternative sources of income, especially by promoting the production of (shade-grown) cocoa, and improved subsistence farming;
Improving the management of existing protected areas.
The Table below shows what volume of emission reductions (‘ERs’, in tCO₂e) it is claimed will be generated for each of these. Around two-thirds of the total would supposedly come from reduced impact logging. Whilst the programme aims to strengthen the region’s controversial protected areas, it is not claimed that this will prevent any emissions, so it’s unclear why this is in the programme. The 8 million or so tonnes of supposed emissions reductions will be ‘purchased’ by the FCPF Carbon Fund for US$5 per tonne, amounting to $41.8 million dollars to be handed over.
Congo’s forest ‘emissions reductions programme’: Who stands to benefit?
As with all FCPF programmes, the division of spoils is set out in what’s called a ‘Benefit Sharing Plan’ (BSP). Typically for FCPF documentation, this is a long and complicated document, but the table below provides the main points.
As will be seen below, because of the way the supposed ‘emissions reductions’ have been calculated, and because logging companies will be required mostly to do no more than carry on their normal operations, this means that the loggers will almost certainly capture the maximum of 70% of the funding. The government will get its 15%, even if it contributes nothing and the programme is a complete failure.
Whilst the Bank’s announcement of the Congo ERP dares to describe the benefit-sharing plan as “inclusive”, local communities will thus get only a miserly 15%. Unlike the other beneficiaries, they won’t see any actual cash, and “will not manage directly the benefits”. Instead, these will be re-invested through ‘Local Development Funds’ “in community projects for agricultural and agroforestry models, climate-smart, resilient, cocoa cultivation in degraded areas, community management and conservation of natural resources”. As explained below, these include projects which some companies have been running for years in order to produce agricultural commodities to sell in the global markets. Even so, in order to be eligible for any ‘benefits’, communities will have to show “adherence to [Emissions Reduction Programme] principles through a letter of commitment addressed to the Minister of Forest Economy” and have “the legal documents attesting to their legal representation as a village”.
The former could involve commitments that the communities are not fully aware of, and the latter is very likely to exclude indigenous Pygmy communities which rarely have such documents, as their communities are either dispersed through the forest, or are typically ‘annexes’ of Bantu farmers’ villages. The “performance” of communities will be estimated “at the concession level”, meaning that, with a couple of exceptions, it will only be communities inside the various company-owned concessions that will be eligible for any benefits.
In other words, the companies whose concessions have taken over the lands of the communities living there will not only get the lion’s share of the direct cash benefits for doing essentially nothing, and be subsidised to get farmers to produce crops that the companies want, but will also determine what supposed ‘development benefits’ the communities will get. It’s hard to imagine a more colonial approach to development or a more distorted and counter-productive approach to international climate funding.
Carbon accounting fiddles and non-additionality: why the ‘Emissions Reduction Programme’ will not actually reduce any emissions
As with other REDD+ projects, the appearance of reducing future emissions has largely been created by greatly inflating what is claimed as the ‘counterfactual’ scenario if the project did not happen.
For this programme, this was achieved simply by taking the historical rate of deforestation and forest degradation experienced in the region, and adding a 72% ‘upward adjustment’ to it. Hence, instead of assessing future emissions under the programme against the actual historical levels, calculated to be around 7.5 million tonnes CO₂ equivalent per year for the region, the success of the programme would be judged against a level of nearly 13 million tonnes per year. In other words, nearly three quarters of the claimed emissions reductions could be generated simply by doing nothing, i.e, they are purely ‘hot air’, not any real reductions.
The architects of the programme tried to claim that the reference level should be ‘adjusted’ by 100% or more, based on the increases in deforestation observed for 2013-2016, but FCPF’s technical rules caused this to be reduced down to the still astonishing level of ‘only’ a 72% inflation of real rates.
The adjustment upwards on the basis of the 2013-2016 deforestation figures (which were indeed bad) was anyway clearly a deliberate manipulation of the reference level, because the actual deforestation in the Congo decreased after 2016, as this chart also from Global Forest Watch shows:
Reducing impacts from logging? Or doing nothing that’s not supposed to be happening already?
Whilst reduced impact logging and creating no-felling ‘set asides’ inside logging concessions accounts for around three-quarters of the putative emissions reduction, there are multiple reasons to think this will actually cause almost no additional reductions in emissions. Logging in parts of the region has been winding down for some years anyway – because timber extraction there is basically only economical when exploiting a few very high value old-growth species, and these are fast becoming exhausted. Already in 2009, the largest logger in the region, Congolaise Industrielle des Bois (CIB – owned by the Singaporean mega agri-commodities company Olam International) closed one of its big concessions because of this. This concession alone (which covers nearly 300,000 hectares) is already effectively ‘off limits’ and could probably account for a lot of the claimed emissions reductions.
The supposed transition from ‘loggable’ to ‘protected’ forest is potentially also completely non-additional. The largest loggers such as CIB and Industrie Forestière de Ouesso (IFO, owned by the Swiss Interholco AG, and which holds a vast concession covering more than a million hectares) operate on a 20 year logging cycle (in fact all the companies are meant to by law). The concessions have all been divided up into 20 or more parcels, called ‘annual coupes’). Each coupe is logged for a year, and then closed for 19 or more years. So the next five years’ worth of annual coupes, which anyway wouldn’t be logged for up to another 19 years, could simply be called ‘protected forest’. In addition, there are typically already a number of areas within each concession which would never be logged – often because the valuable timber species do not occur there, or they are swampy and commercially inoperable. Both CIB and IFO are certified under the Forest Stewardship Council (FSC) scheme, whose rules require such protection areas; FSC documentation shows that these companies long ago already claimed to have set such areas aside. So the supposed ‘logged to protected areas’ could be completely non-additional, at least for some of the companies.
It is difficult in Congolese law to change the legal status of concessions to actual legally protected areas (and it would be a breach of contract), so creating the supposedly ‘protected forest’ would at most simply involve following the existing logging concession management plan. Some management plans might need to be changed slightly, but these could easily be changed back again later, long after the emissions reductions payments have been banked, and everyone has forgotten about it. There is nothing whatsoever in the Benefit Sharing Plan requiring that these ‘forest protection’ plans must be new or newly implemented, and thus additional.
Switching subsistence farmers to cocoa production? Already happening . . .
Linked to the exhaustion of (supposedly sustainably managed) commercial timber species, some companies, especially Olam/CIB, have been starting to grow coffee and cocoa in their timber concessions instead – in the case of Olam, already 10 years ago. They have been turning their now redundant logging workers and their families into farmers producing agricultural commodities for the company. This is being done through precisely the mechanisms through which the supposed emissions reductions’ money will flow – the ‘Local Development Committees’.
In other words, this component could simply provide a subsidy to Olam and other companies to do things that have already been happening for a decade. This component will also therefore generate no additional emissions reductions. The World Bank is apparently quite keen on pouring money into Olam (most recent annual net profit: $178 million), having already bunged the company a million dollars in 2015 for growing commercial crops including bananas and cocoa in its sustainable timber concessions in northern Congo.
Paying a palm company to . . . do nothing
According to the programme’s Benefit Sharing Plan, “Oil palm concessionaires can establish conservation zones within their concessions. These conservation areas should go beyond legal requirements (e.g. buffer zones along rivers) and reduce the total area available for oil palm planting.” Again, there will likely be no additional emissions reductions here.
There is in fact only one palm oil company in the region, called ‘Eco-oil’, which holds three separate concessions (see Map 3).
The western-most concession around the town of Sembe covers 133,512 hectares. By any standards, this would be a vast palm oil plantation. However, the Global Forest Watch deforestation map for this area (Map 4 below) shows that there has been no clearance at all of forest for palm oil in the concession to date. Only small patches along the roads to Sembe are shown as being deforested, probably for subsistence farming.
For many reasons (remoteness, lack of labour, lack of processing facilities, lack of infrastructure to export oil, and lack of investment) it is inconceivable and practically impossible that the whole of this concession could be deforested and converted to palm oil any time soon, and certainly not within the three years left of the FCPF emissions reduction programme. In fact, the FCPF programme document even notes that “Statements from the CEO of EcoOil indicate that their goal is to plant 30,000 hectares across the three departments where they have concessions”. So there is not even any intention of clearing all the forest. Therefore, all that the owner would have to do is draw a few lines on a map to designate as ‘conserved’ and ‘not available for palm oil production’ areas that would not be cleared in the foreseeable future anyway, and the requirement for getting emissions reductions payments is met. Zero additionality.
The many ‘elephants in the room’ . . . oil, mining and dams coming to the programme area
Whilst the ERP does not require any of the beneficiaries to actually do anything different, it does not address the multiple very real new threats which are developing in the region.
First, a series of new oil exploration concessions started to be allocated by the Congolese government in 2013 and now cover a large part of the programme area – pretty much the whole of Likouala department (see Map 5 below).
Second, there has been a major (Chinese-funded) upgrade of the main road coming from Cameroon in the north-west right across Sangha province to Ouesso (its route can be seen in as the pink ribbon running through Sembe in the map of Eco-oil’s concession in Map 4 above).
Third, as reported in my recent article, the governments of Congo and Cameroon have agreed to push ahead with the construction of the huge Chollet Dam, located on the Dja river forming the boundary between the two countries. This will likely flood forest and attract settlers to parts of the ERP area. In turn, and much more seriously, the dam could help unlock the proposed vast iron-ore mining project of Mbalam-Nabeba, in the west of the so-called emissions reductions programme area, which could cause massive deforestation.
The oil concessions are not mentioned in the ERP at all, nor the Chollet Dam. Both the upgraded road and the potential development of the Nabeba mines are noted, along with the fact that roads in the Congo Basin are invariably linked with deforestation. But nothing is said about how the programme will deal with the consequences of these very large threats. Given the very specific range of organisations that will get the money from the plan, there is little the programme could do about most of these threats, as the recipients don’t have any influence outside their own operations.
Hot air, smoke and mirrors, money down the drain . . . Choose your own metaphor for the Congo ERP
Overall, the programme will evidently mostly pay recipients for doing nothing, whilst the actual likely causes of major new deforestation and forest degradation in northern Congo will go unaddressed. The question is, why would the Bank – and the governments of Germany, Norway and the UK in particular – waste so much money? The truth is that the FCPF has been a long and embarrassing failure. The bureaucrats in the governments bankrolling the FCPF, such as the UK’s Department for Business, Enterprise and Industrial Strategy (BEIS), have been facing an increasingly uphill struggle to demonstrate to their paymasters what is being achieved through the huge financial commitments they have made to the programme. It is at best doubtful whether even they fully comprehend all the programme documentation, or have any real knowledge of the areas and issues concerned.
After nearly 14 years, and around US$360 million spent, the Bank up until 2020 was still unable to show any actual reductions at all in carbon emissions anywhere due to the FCPF. There was a real danger that the whole ‘facility’ would reach its agreed shut-down date of 2025 without completing payments for any ERPs. The entire credibility of so-called ‘payment for performance’ REDD+ concept – slavishly promoted by Norway, Germany and UK – was at stake.
Hence the rapid signing of a raft of new ERPs in 2021, including that of Republic of Congo. Presumably the Bank and the donor officials were hoping that no-one would look too closely at the details. But, despite all the smoke and mirrors, and the hundreds of pages of documents, it’s still possible to discern the sight of tens of millions of precious public funding dollars for climate mitigation being poured down the drain.
