The Araku Valley Livelihood Project in India generates carbon credits to make Evian bottled water “carbon neutral”. But villagers have signed away the rights to money from carbon credits
Villagers plant trees on their land but have signed away carbon rights
Recently the Indian think tank Centre for Science and Environment (CSE) published a report about the voluntary carbon market in India. Written by Trishant Dev and Rohini Krishnamurthy, the report is titled “Discredited. The Voluntary Carbon Market in India: Do People and Climate Benefit?” The report was also published in CSE’s magazine Down to Earth (DTE).
The researchers quickly ran into problems. They write that:
When Down to Earth and the Centre for Science and Environment (DTE-CSE) began its investigation, the team quickly learnt that there are no rules in the voluntary carbon market. Worse, there is a shroud of secrecy. There is no government database of projects that generate carbon credits. Individual companies are at liberty to make deals to get the credits issued. These companies also do not want to share much about their projects or their partners. They certainly will not reveal the price at which they have bought the credit and at which they will sell it. This suggests that the market has much to hide.
The report includes an overview of carbon markets and a look at the voluntary carbon market in India. This is followed by five case studies.
This post looks at DTE-CSE’s Case 2: Planting trees for carbon.
Planting trees for carbon
The Araku Valley Livelihood Project covers an area of 6,024 hectares in the Eastern Ghats of Andhra Pradesh. The project is registered with Washington DC-based carbon standards organisation Verra.
When the researchers contacted the project developer, Livelihoods Funds, which is based in France, the organisation told them not to visit the project sites, because,
“Most areas in Araku are cut-off now due to poor road conditions during the monsoons and insurgency is also an issue there.”
On its website, Livelihoods Funds explains that Danone, the French food-products multinational corporation, “played a fundamental role in the creation of the Livelihoods Carbon Funds”.
The project started in 2010 and will continue until 2030. The Naandi Foundation runs the project and a German company called UNIQUE Forestry and Land Use provided “carbon project development support” to the project.
The project anticipates generating 1.6 million carbon credits - an average of 80,660 per year. The project has so far sold 96,386 carbon credits.
The project aims to plant a variety of trees which will provide shade to coffee plantations. The land is owned by 9,700 smallholder tribal farmers. The project description document states that, “around 60% of the project area is classified as barren fallow land and the remainder is classified as shrubby and grass land”.
Evian’s “carbon neutral” claims
In April 2020, Danone announced that its bottled water product, Evian, was “carbon neutral”. Two years later, Danone faced a lawsuit over its “carbon neutral” claims. A class action filed in the Southern District of New York court argued that “the carbon neutral claim is false and misleading because the Product’s manufacturing process is not carbon neutral”.
In April 2023, Danone filed a motion to dismiss the case. Danone argued that it had reduced carbon emissions from materials used, production, transportation, and recycling. “The emissions that remain,” Danone wrote, “are then offset through our work with Livelihood Funds that has planted 130 million trees.”
In May 2023, Deutschland Umwelthilfe (DUH) filed a lawsuit in Germany, over the claims that Evian is “carbon neutral”. In a statement, Jürgen Resch of DUH said that,
Mineral water packaged in thick-walled plastic and carted to our grocery stores across half of Europe cannot be climate-neutral.
Do communities benefit?
Under the project, tribal communities plant trees on their land, but the carbon credits are owned by Livelihoods Funds. DTE-CSE expose the inequity of the project in the new report:
According to the project document, these communities have ‘agreed’ that they will have the right to the fruits and other produce of the horticulture trees, but not to the carbon credits generated by the project. The document says, “farmers and the communities have agreed that the property rights on the carbon credits generated by this restoration are exclusively allocated to the developer of the Project.” Furthermore, “under this agreement, the beneficiary community is committed not to assert any property rights over the carbon credits generated and/or to be generated by the Project.” This agreement is a legally binding commitment to manage and protect the credited carbon stocks over the length of the crediting period of 20 years.
In August 2023, DTE-CSE’s researchers visited the project site. “It was clear from the visit,” they write, “that the real benefit to the communities comes from coffee plantations.”
Naandi Foundation provides training on organic coffee plantations, with trees planted to shade the coffee. Tribals told DTE-CSE that growing coffee had improved their lives.
“But they knew nothing of carbon credits,” DTE-CSE note. Two tribal women told DTE-CSE that their husbands had signed a document but they don’t know what was in the document.
DTE-CSE write that,
It leaves one wondering whether benefit sharing in carbon credits can only be claimed by providing free saplings and training, given that farmers contribute the land and labour towards growing and maintaining the plantations that sequester carbon. It is also the land of the tribals, where the ‘ownership’ of the trees has been transferred to a private entity.
Farmers pay an annual membership fee of US$1.2 to a cooperative the Naandi Foundation set up, the Small and Marginal Tribal Farmers Mutually Aided Cooperative Society (MACS). Members of MACS receive support with saplings, training, and get to sell their coffee through MACS at a higher price than they could get elsewhere.
But DTE-CSE found that some farmers were unaware of the membership fee. MACS deducts the membership every year when it buys the product.
Is the project “additional”?
Several villagers told DTE-CSE that several other private agencies also provide them coffee saplings and other trees, for free. A government agency, the Integrated Tribal Development Agency (ITDA), has been providing free saplings and training since 1985.
In the 1990s, ITDA launched a massive plantation campaign in Araku Valley. V Abhishek, a project officer with ITDA told DTE-CSE that,
Tens of thousands of silver oak saplings were distributed, making the mountains green in the 1990s. The plants also provided shade for coffee saplings. In this way, deforested areas were converted into coffee plantations.
Rohini Mukherjee of the Naandi Foundation argued that carbon credits are only claimed from fruit and forest trees that were planted under its programme and the project is therefore additional.
“The revenue model of the project is not obvious,” DTE-CSE write. Naandi Foundation has received about US$2.5 million from Livelihoods Funds between 2016 and 2022.
But the “real money” DTE-CSE note “would be in the sale of the carbon credits, which are owned by Livelihoods Funds.” And the people living in the project area have signed away any rights to the carbon credits.
The carbon credits from the project are not for sale on the open market. Instead they are sold to the corporations that have invested in the Livelihoods Funds. These include include Danone, Schneider Electric, Crédit Agricole SA, Michelin, Hermès, SAP, Groupe Caisse des Dépôts, La Poste, Firmenich, and Voyageurs du Monde.
In 2018, 2019, and 2020, Michelin retired carbon credits from the Aruku Valley Livelihoods Project in part to offset emissions from train and aeroplane travel by its employees. No other buyers of carbon credits are listed on Verra’s database.
DTE-CSE concludes that,
The public data on retirement is sketchy. Livelihoods Funds also does not have information on how much credits it has issued to its investors. The carbon credits game, once again, is about non-transparency and all in the name of climate action and poor people.
I hope the Sovereign District of New York eventually won the case against Danone. The final sentence above is not quite correct - it is about non-transparency with a token interest in climate action and total disregard for poor people. But if there were to be total transparency, that would be the end of this scam. (Yes, that's what people there call it, instead of "Southern District," due to their energy in pushing cases forward.)