Cordillera Azul National Park REDD project in Peru: Fake additionality, fake baseline, fake leakage, and failure to recognise the rights of Indigenous Peoples

Business as usual for REDD.

The Cordillera Azul National Park REDD project in Peru has sold a total of more than 30 million carbon credits. The biggest buyers of those carbon credits are Shell and TotalEnergies. Between them these two massively polluting oil corporations account for 87% of the carbon credits sold from the project.

A recent report by Associated Press journalist Ed Davey, published in the Washington Post, “raises doubts about whether the project has delivered on its promise to counter-balance emissions by oil companies such as Shell, TotalEnergies and others. And the tree loss has more than doubled, according to satellite analysis.”

Shell told Associated Press that it would conduct an additional review before buying any more carbon credits from Cordillera Azul.

“Something has gone wrong”

Edward Mitchard is the co-founder of a company called Space Intelligence, a satellite data analytics company. The company’s website states that, “Our products improve the integrity of carbon markets,” and that, “We are approved as data providers by Verra.”

“It is clear something has gone wrong in this project,” Mitchard told Associated Press. Space Intelligence found that tree canopy loss more than doubled from an average of 262 hectares per year in the five years before the project started, to an average of 572 hectares per year from 2009 to 2021.

Centro de Conservación, Investigación y Manejo de Áreas Naturales (CIMA) the organisation that was created specifically to run the Cordillera Azul National Park said that the deforestation was caused by landslides, not logging, farming, or mining.

But Space Intelligence found deforestation within one kilometre of a park boundary or rivers was about double that of the rest of the park. So the deforestation is taking place in the most accessible parts of the park. That “does suggest that there has been human disturbance of the forest, making these landslides more likely,” Mitchard told Associated Press, although he noted that landslides could not be ruled out.

In October 2022, Friends of the Earth Netherlands put out a report titled “How Shell is using Nature-Based Solutions to continue its fossil fuel agenda”.

Written by Jutta Kill and Simon Counsell, the report includes three case studies, one of which is Cordillera Azul. The problems highlighted by the Cordillera Azul National Park REDD project are similar to those faced by many other REDD projects: Additionality; The project baseline; Leakage; and Co-benefits.

Let’s take a look at Kill and Counsell’s findings on each of these.

Additionality

Kill and Counsell note that the work to establish the protected area started in 1999 long before the REDD project started. On 21 May 2001, a Decree establishing the Cordillera Azul National Park was passed. The Decree puts the Peruvian government under a legal obligation to protect the area “in perpetuity”, regardless of whether the project sells carbon offsets or not.

A 2006 “master plan” for the park covering the years 2003 to 2008 noted that “the park’s short-term sustainability is assured”. A 2013 report by USAID stated that, “By 2006, illegal logging was completely eradicated from five basins where it was previously established and growing and, by 2008, the last farmers inside the part prior to designation were relocated in a consensual and peaceful manner”.

The project baseline

Without the sales of carbon credits from the national park, CIMA argued that almost 29 million tons of CO₂ would be released from illegal deforestation from the park over the next decade. CIMA came up with this figure by using a reference area covering 21 municipalities surrounding the park.

Associated Press reports Simon Counsell as saying that,

“CIMA’s reference area artificially boosted the figure by oversampling lowland valleys and floodplains far more attractive to farmers — and thus vulnerable to logging — than the park’s more rugged terrain.”

The reference area extended far to the west of the park to include municipalities where extensive deforestation was taking place. In particular around Nuevo Lima and Cusco and other settlements on the relatively fertile flood plains of the Huallaga River and its tributaries.

The baseline was further distorted by exaggerating the rate of population growth. In the district of Pampa Hermosa, CIMA estimated that population would increase by eight times between 2008 and 2018. The average actual population growth between 1993 and 2002 was only 2.1%, according to the Park’s 2006 “master plan”.

Kill and Counsell write that,

“The projected deforestation for the purpose of establishing the emissions baseline was more than twelve times the actual observed deforestation over the full period. It should be remembered that no carbon credits were sold by the project proponents until the middle of 2015. This indicates that, for the first six or seven years of the project at least, the baseline for how much deforestation would occur in the absence of the carbon offset income was significantly exaggerated. This resulted in a greatly inflated figure for the claimed emissions reductions caused by the project and therefore the number of carbon credits issued.”

Leakage

Leakage addresses the extent to which avoided deforestation within the project area has simply moved elsewhere. CIMA makes a series of assumptions and what Kill and Counsell describe as a “very complicated calculation” to come up with a figure of 26.63% for a counterfactual baseline of deforestation in the leakage belt.

As long as emissions in any monitoring period are below this theoretical baseline it is assumed that no leakage from the project area has taken place.

Obviously, it is impossible to know how much deforestation would have taken place in the leakage belt in the absence of the carbon project. So leakage is impossible to verify.

The first four monitoring report for the project covered 2008 to 2016 and recorded zero leakage. In the period 2017 to 2018 leakage amounted to less than 5% of the carbon credits issues.

Kill and Counsell produced maps using Global Forest Watch showing how deforestation in the area around the park increased from 2001-2010 to 2010-2020:

Co-benefits

Project documents mention that an uncontacted group of Indigenous Cacataibo (also spelled Kakataibo) peoples live in the southern part of the Cordillera Azul National Park. In August 2017, the Kakataibo people obtained legal recognition of their existence and in 2021, the Kakataibo Indigenous Reserve was created covering 150,000 hectares on the southern boundary of the Cordillera Azul National Park.

However, the Kichwa Indigenous communities whose territory covers park of the national park are almost entirely missing from project documents. The Kichwa were not consulted about the creation of the park, nor about the sale of carbon credits from the park.

In July 2020, the Kichwa community started a legal case against the Peruvian government and the Cordillera Azul National Park. Forest Peoples Programme describes the the carbon credit market as “part of an exclusionary model of conservation which impedes communities from participating in the governance and communal titling of their lands”.

In October 2022, journalist Ed Davey and a team from Associated Press visited seven Kichwa Indigenous communities on the park’s borders.

Davey wrote that,

“The investigation found evidence that the villages existed in their current locations outside what is now the park long before it was delineated, and that people lived by hunting and planting inside the park. In Puerto Franco, a faded sign announced the village and a date — August 1970. A document from 1996 shows a teacher was sent to Puerto Franco that year. At the border of the park, an elder recognized fragments of old pottery on the ground as the kind his grandparents used to make.”

In each of the villages visited, Davey wrote, people over 40-years-old told him about memories of hunting and gathering food inside what became the national park in 2001. Others told him about their elders planting orange, avocado, and mango trees in their part of the forest.

Verra’s response

Steve Zwick, Senior Manager, Media Relations at Verra told Associated Press that the carbon project was a “lifeline” for the national park. Without money from carbon credits, CIMA would have been dependent on unreliable funders.

Zwick explained that the reference region was chosen by peer-reviewed processes, the best then available. Questions raised by independent auditors were addressed. The population data was the best available at the time.

In contrast, Kill and Counsell conclude their case study of the Cordillera Azul National Park REDD project as follows:

“This project illustrates one of the underlying contradictions when a carbon offset project is established to fund an existing protected area: most such areas will have a prior history of donor support, that will typically have claimed significant success as a result of their efforts to conserve the area. However, the additionality requirements of a carbon project are exactly the opposite; it has to be demonstrated that the area remains seriously threatened, despite whatever efforts had preceded the carbon project. Various ‘stories’ are created to resolve these mutually incompatible narratives.

“In the case of this project, it was implied that the protected area would not have been designated at all had there not been carbon funding available and that there was no alternative to carbon funding. Then, in the setting of the baseline, the results of the park prior to the carbon offset project elaboration in preventing deforestation before the carbon project started were simply ignored. In addition to the demonstrably implausible additionality of the project, baseline assumptions for population growth inside the project area are implausibly high (and thus inflate alleged emissions reductions) and the assessment of project leakage highly questionable. As a result, the carbon credits sold by the project are highly unlikely to represent avoided emissions that otherwise would have occurred. In addition, they are generated from a project that takes place in the context of a conflict between indigenous peoples and the government of Peru over rights to the land today designated as a national park.”

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