Carbon credits :
Are they really worth it ?
Considered for a long time to be a gold mine, they are now being called into question. COP28 in Dubai failed to reach agreement on their regulation. Some see them as a false solution, while others are signing agreements with African countries left and right.
In Monrovia a year ago, in March 2023, the Emirati company Blue Carbon LLC signed a memorandum of understanding with the Liberian authorities granting them exclusive rights over no less than a million hectares, or 10% of the country's land area, for a period of 30 years. Under Article 6 of the Paris Agreement, signed at COP21 in December 2015, Blue Carbon would use the licensed land to sell carbon credits. For the record, the carbon offset mechanism allows a polluting company to offset its emissions by buying these credits (units each representing one tonne of CO2 avoided, reduced or removed ). The Gulf States are reluctant to stop extracting fossil fuels, an economic model that has ensured their dazzling prosperity for four generations: they are therefore in favour of this offsetting mechanism, which was first envisaged when the Kyoto Protocol was signed in 1997. The scheme has also been praised by the African Development Bank (AfDB) and a number of African leaders – Kenyan President William Ruto, who aspires to achieving 100% renewable energy by 2030, has likened carbon credits to ‘a gold mine’, capable of financing the continent's energy transition.
A NEW SCRAMBLE FOR AFRICA SAY NGOS
An association of Emirati companies within the UAE Carbon Alliance has announced its intention to acquire carbon credits in Africa. Blue Carbon has clearly decided to acquire African land in order to secure a strong foothold in this promising market. However, the sheer scope of these memoranda of understanding, signed in the space of just a few months, raises questions. Founded in August 2022 and headed by Sheikh Ahmed Dalmook Al-Maktoum, a member of the Emirati royal family, Blue Carbon negotiated memoranda of understanding in 2023 not only with Liberia, but also with Zambia, Zimbabwe, Angola, Kenya, Tanzania and Uganda. They all cover huge areas, totalling some 250,000 km². African and Western environmental NGOs are highly critical of the carbon credit mechanism, which they see as a false solution to the climate crisis, merely delaying the phase-out of fossil fuels. They compare the scramble for carbon credits to a new ‘scramble for Africa’, in reference to the Berlin Conference of 1885, which enshrined the colonial conquest.
Another stumbling block is the lack of transparency in the signed memoranda of understanding. A group of seven Liberian environmental and rural associations, the IFMCM (Independent Forest Monitoring Coordinating Mechanism), acknowledged in a press release that they had ‘very little information’ on these preliminary agreements. The national media, such as Zambia's national television channel ZNBC, are strangely tight-lipped about the memoranda, which concern huge swathes of the country and could bind successive governments for several decades.
The difficulties experienced by Djibouti over the past six years in disposing of its one-sided contract with the Emirati company DP World could serve as a cautionary tale for the signatory states. The draft agreement between Blue Carbon and Liberia provides for an unbalanced distribution of revenues, to say the least: 70% for the Emirati company and only 30% for the West African country, as well as a decade of tax exemption.
A group of seven Liberian environmental and rural associations, the Independent Forest Monitoring Coordinating Mechanism (IFMCM), acknowledges in a press release that carbon credits can help combat deforestation, but is concerned that Blue Carbon's control of land will clash with the 2018 Land Rights Law. The hard-fought Land Rights Law is designed to ensure that rural communities own the land on which they live. In Liberia, the land issue has historically been explosive: in this state founded in 1847 by returning freed slaves from the Americas, the indigenous populations had long been dispossessed of their customary land to the benefit of the new arrivals. This unequal treatment was a source of grievance and was even one of the main causes of the civil wars that ravaged this English-speaking country bordering Côte d'Ivoire in the 1990s and 2000s. The memorandum of understanding with the Emirati company that was signed by President George Weah could, however, be called into question by his successor, Joseph Boakaï. The new Liberian president, who was elected in November 2023 and sworn in last January, made upholding the rights of rural communities one of the pillars of his election campaign, and it is hard to imagine him endorsing a memorandum of understanding signed by his predecessor without consulting or obtaining the consent of these communities. According to Dutch NGO Fern, a million of Liberia's 5.2 million people would be directly affected if the agreement were to be implemented. The growing controversy surrounding Blue Carbon's activities in Africa illustrates the urgent need to regulate the sector. However, at COP28, held in Dubai last November and December, the participants failed to agree on common standards to regulate this market [see Jonathan Crook's interview on the following pages]. In 2019, COP25 in Madrid was similarly unsuccessful.
THE NEED TO ESTABLISH RULES
Without rules, the carbon credit sector is like the Wild West: a study by American academics into 61 carbon credit projects around the world found that 44 of them were detrimental to local populations. Last year, a joint investigation by German newspaper Die Welt and British newspaper The Guardian showed that 90% of the carbon credits guaranteed by the American certification company Verra were worthless, mainly because of the difficulty of calculating the non-emission of a tonne of CO2. In Zimbabwe, where some thirty carbon credit projects already exist, the authorities announced a new law in May to ‘put an end to carbon washing’ and ‘ensure that the benefits of carbon credits go to the nation’: the law provided for a new revenue distribution that is more favourable to local communities. However, the law passed in August has been considerably toned down compared to the initial draft, with the authorities clearly fearful of driving investors away to countries with less stringent regulations.