FCPF’s “poster child” would reward forest destroyers in Indonesia

PHOTO Credit: Robin Wood.

A colleague recently asked the question: What is the possibility of plantations being included in REDD schemes under the World Bank’s Forest Carbon Partnership Facility? It’s an excellent question.

The response from FCPF’s Management is extraordinary, since they chose one of the most controversial potential REDD schemes to illustrate the supposed “benefits” of plantations. If it were to go ahead, this REDD scheme would involve paying APRIL, a company which is responsible for destroying vast areas of forest in Indonesia. This appears not to concern FCPF management at all.

In June 2008, the World Bank produced an “Information Memorandum” about FCPF which states that “It is expected that the FCPF will be able to review a great diversity of ER [Emissions Reduction] Programs depending on country circumstances and preferences.” The Memorandum includes a list of “groups and categories of ER Programs [that] can be envisaged”, including:

Reforestation: Promotion of new plantations, in particular on degraded lands, to meet timber and energy needs and remove pressure on natural forests, including through company-community partnerships, some of which may be eligible to generate credits under the Clean Development Mechanism of the Kyoto Protocol.

This suggests that the FCPF will finance plantations. And that the companies establishing these plantations could receive further subsidies through the CDM.

The question and the reference to the Bank’s “Information Memorandum” was passed on to the FCPF Management. Here’s the reply from the FCPF Management:

The section of the FCPF Info Memo referred to . . . illustrates Emission Reduction Programs that might be supported by the Carbon Fund (of the FCPF). It mentions plantations as a way to relieve pressure on natural forests and reducing emissions from deforestation and degradation, the assumption being that the need for fiber and energy will continue to exist (or even grow as the world switches away from fossil fuels). The source of carbon finance would be indirect, i.e., from the reduction of deforestation/degradation, not directly the reforestation/plantation. So it falls under REDD, not reforestation.

A poster child is the relocation of the pulp and paper industry away from peat forests to degraded lands in Indonesia in the context of state-company-community partnerships. In such a case, the Forest Investment Program (FIP), along with other sources of investment finance, could finance the investment cost, and the FCPF Carbon Fund, or another source of carbon finance, could provide a performance-based incentive for verified emission reductions from deforestation/degradation. It is even possible that the plantation part would earn additional carbon finance (though not from the FCPF Carbon Fund) if it met specific criteria for reforestation — this might actually be eligible under the current CDM. And this climate mitigation would potentially be achieved with significant social and biodiversity co-benefits.

The myth that plantations relieve pressure on native forests is often put forward by proponents of industrial tree plantations. The reality is that plantations do not relieve pressure on forests. The FCPF Management should read some of the World Bank’s own reports about plantations: “To date, however, plantations have had no discernible global impact on reducing deforestation,” notes an article by two World Bank staff, Jürgen Blaser and Jim Douglas. In its 2003 report on “Fastwood” plantations, the Centre for International Forestry Research (CIFOR) states that “there is little evidence to suggest that fast wood plantations have taken pressure off natural forests elsewhere”.

Countries can have rapidly expanding industrial tree plantations and rapid deforestation. Brazil is one example of this. Indonesia is another. The FCPF Management’s “poster child” raises one of the most controversial issues surrounding REDD: that of paying large sums of money to the very companies responsible for deforestation. Fred Pearce, writing in New Scientist (22 March 2008) sums up the problem as follows:

Meanwhile, some huge forest destroyers are drawing up plans to get compensation. On the Indonesian island of Sumatra, for instance, giant pulp mills are responsible for vast amounts of carbon being released into the air as they log rainforests and drain peat bogs to plant new trees. One of them, Asia Pacific Resources International (APRIL), wants to set up a REDD pilot project under which it will block the canals that now drain the Kampar swamp. APRIL could receive tens of millions of dollars a year in compensation for protecting the forest and not releasing the peat carbon. The project is genuine and is based on sound science, but the reductions are only possible because the company has been so destructive in the past.

It would be difficult to exaggerate the destruction that APRIL has caused to the forests in Sumatra and to the livelihoods of people living there. An article in the Japanese newspaper The Daily Yomiuri from July 2006 describes one of APRIL’s logging operations: “Drying tropical timber was stacked in piles between thick tree stumps — as if it were a heap of bones. The place looked like a field that had been hit by a bomb.”

To summarise FCPF Management’s response to the question: “Will FCPF finance plantations?”:

The answer is yes, if we can find a company that is responsible for destroying hundreds of thousands of hectares of forest to provide raw material for its pulp mills. We may not finance the plantations directly, but our colleagues in the World Bank will do so. With a bit of luck the company will be able to get CDM approval. FCPF will help the company to trade the carbon stored in the forests and the peat swamps that they did not destroy (even though under Indonesian law, it is illegal to exploit land where the peat is more than 3 metres deep and many APRIL concessions are on peat 6 to 8 metres deep). Then the company can trade the carbon supposedly stored in its acacia monocultures through the CDM. The company gets away with its past record of social and environmental destruction and with its continued emissions from its pulp and paper mills (as well as the methane released when the paper is thrown away and rots in landfills). Job done.