The truth about Papua New Guinea's carbon trade scheme

By CARBON TRADER

Port Moresby

The Prime Minister (PM) of Papua New Guinea (PNG) stated in The National (11^th October 2010) that the REDD+ approach that is being championed by his government is being undermined by the trading of forest carbon through the voluntary carbon schemes (VCS) in PNG.

He describes VCS as being risky and premature.

But how much truth is in what the PM said is anybody’s guess. 

The PM does not elaborate on the risks involved in the VCS, but the only cheap excuse given is that the VCS are thinly capitalised.

The advantages of the VCS over a compliance forest carbon market are not discussed by the PM.

Moreover, the PM failed to admit that REDD markets for forest carbon exists under some VCS, but a compliance market for forest carbon does not exist at the moment and the likelihood of a world market for forest carbon through the REDD+ scheme is far from reality.

The sad fact is that countries in South America, Asia and Africa have gone into VCS, while we are the only ones that are still fighting to engage in a compliance market for forest carbon, which does not exist or is yet to materialise.

Therefore, one wonders why the PM, PNG’s climate change ambassador and the acting director of Office of Climate Change and Development (OCCD) are all hell-bent on a REDD+ carbon scheme under the compliance market.

The reason why the OCCD, the PM and our climate change ambassador are globe trotting on climate change and carbon trade issues is that they want some of that $4.5 billion (US) that has been earmarked for REDD+ projects in developing countries.

So far our negotiations have failed two times to access any international funding because PNG does not want any strings attached to these REDD+ funds.

However, the international community is aware of what is going on in developing countries and will not release any funds until stringent measures are put place by respective governments to protect the rights of indigenous peoples and their forest resources from carbon cowboys.

Earlier this year, the PNGexposed Blog published an article that accused the PNG government of trying to be the “ultimate carbon cowboy”.

Nupan Trading was in the spotlight and was seen as being the culprit in carbon trade deals in PNG, but the PNGexposed Blog article also put the PNG government in the spotlight.

This article has been widely read and circulated over the internet and there are now more suspicions about the PNG government’s moves to have customary landowners snub the VCS.

It makes one wonder whether the moves taken by the PNG government are genuine in reducing emissions from deforestation and degradation of forests and ultimately combating climate change, or, is the PNG government trying to blackmail the international community into giving us funds so that we can put them in our pockets; let alone pay for political stability to protect the so-called “national interest”.

At the moment VCS are legal in a sense that it is a business deal that can be struck between a customary land owing group and a carbon broker.

The government has no control over customary lands therefore it cannot decide which carbon market the customary landowners chose to trade their forest carbon.

However, the OCCD, as the mandated authority on climate change and carbon trade issues in PNG, can facilitate carbon trade business deals between customary landowners and carbon dealers under the VCS.

The only problem with carbon dealers in the VCS is the issue of “carbon cowboys”, but this problem should be addressed by the OCCD.

The OCCD should check on any carbon dealer’s records and give appropriate advice to customary landowners on the authenticity of the carbon dealer and whether his business interest is genuine and has integrity.

However, to date the OCCD has refused to have anything to do with VCS or issue carbon certificates.

The reasons given by OCCD for not recognising VCS in PNG and not issuing carbon certificates to Nupan Trading and other carbon dealers is the same as that given above by the PM.

Regardless of the reasons given by the PM and OCCD about VCS in PNG, these are business deals like any forestry and mining business deals and OCCD will have to cater for that.

But the position taken so far by OCCD and the PNG Government to snub VCS indicates that there is something fishy going on in terms of carbon trade in PNG, and it goes to cement the suspicion that the PNG Government wants to be the “ultimate carbon cowboy”. 

One reason why the government wants customary landowners to snub the VCS is that it wants to keep all carbon credits from REDD+ for its own interest so that it becomes the one and only carbon broker in PNG.

Therefore, if the OCCD facilitates business deals between customary landowners and the VCS and much of the forest areas in PNG are registered under the VCS, there will be few or no forest areas left for the PNG government when an international agreement is reached after 2012.

The PNG Government wants to be the “ultimate carbon cowboy” in PNG so it is playing delay tactics to stall VCS in PNG and to maintain all forest areas for itself to have access to when a compliance market comes on after 2012.

The PM also stated that a climate framework was not yet finalised to protect and safeguard the interests of customary landowners dealing with carbon dealers under the VCS.

 However, this is the cheapest excuse that can be given, and it insults the intelligence of people who are familiar with development of policies and legislations.

The issue of climate change has been around since the 1980s, and literature has built up immensely within science and policy domains in the last few years which are available and can be used to develop a climate change framework for PNG.

Thus there is no excuse for the OCCD to say that it has not produced a climate change framework for PNG as yet.

Two offices have preceded the OCCD, in which time a climate change framework should have been produced by now, and the civil societies in PNG have been constantly calling on the government to put in place legislation and policy for climate change.

Moreover, there is sufficient human resource within country that can be utilise by OCCD to draft a climate change framework, but it seems a few handpicked people are being used by the government to run the show so that some peoples’ vested interests are protected.

But since no policy or legislation has been developed for climate change in PNG as yet, it goes to show that the PNG government is deliberately avoiding the issue so that it does not put itself under any obligation to protect its indigenous people and their forest resources from carbon cowboys, of which the PNG government is one of them and the “ultimate carbon cowboy”.

Finally, a few years ago the PM was questioned on his family’s vested interest in carbon trade in PNG and the establishment of a pyramid structure that was establish within the Office of Climate Change and Carbon Trade (OCCCT) to  deliberate on carbon financing.

Although time has passed and memories have faded, I am of the opinion that the pyramid structure that existed within OCCCT is still alive and exists within the OCCD and is just waiting to deliberate on any international funding on REDD+ that may come out from the $4.5 billion (US) earmarked for developing countries.

Understanding carbon and carbon trade

By NALAU BINGEDING

This article complements the article “Carbon trade is tightly regulated” by Peter Donigi (The National, 20^th November, 2009).

Carbon trade

Carbon trade was originally developed to address the issue of global warming and the resultant climate change.

It is believed that through the carbon trade mechanism, it would encourage companies, governments, landowner groups and individuals to reduce their greenhouse gas emissions and trade their carbon credits on carbon markets for financial benefits; on the same subject, some voluntary carbon markets provide social and environmental benefits instead of financial benefits.

In the case of tropical rainforest nations we are responsible for 20 – 25% of the total man-made greenhouse gas emissions, thus carbon trade would be an incentive for us to reduce damage to our rainforests or to retain them for monetary benefits.

In Papua New Guinea, individuals and the government have swooped at the opportunity provided by carbon trade because we think that it is a chance to make quick bucks and get rich overnight.

We have now put the economic benefits of carbon trade before its social and environmental benefits, thus we have got the order of the whole concept wrong.

Carbon trade was originally designed to address the environmental problem of climate change, which experts believe, if not addressed properly and in time, could lead to a myriad of social, economic and environmental problems.

Thus, the environmental and social benefits of carbon trade must take precedence over its’ economic benefits, not the other way around.

One of the points Mr Donigi highlighted in his article was that carbon trade must be done in accordance with the rules of the Kyoto Protocol or the Voluntary Carbon Markets.

It must be understood by carbon cowboys, landowner groups, individuals and the PNG Government that all carbon transactions will be regulated by these two markets, and there is no room for corrupt deals.

People sitting on the panels of the International Panel on Climate Change (IPCC) and the United Nations Convention Framework on Climate Change (UNFCCC) and the different boards of the Voluntary Carbon Markets are experts on forests, climate, economics, social science, and many science disciplines.

Therefore, what we do will always come under the scrutiny of these experts.

We cannot simply assume that we can go pass the scanning machines without being detected. People on the voluntary or regulated market boards or panels of the IPCC and UNFCCC are experts in their own right and many of them know more about our economy and forests than ourselves, so we should be careful with how we go about quantifying, managing and trading forest carbon credits from this country.

What we do in terms of carbon trade should be in line with what the voluntary or regulated markets have set out to do.

If we err in what we do, it would be an international disgrace, and this could have adverse impacts on our future endeavors to trade our carbon credits for money and contribute to the international effort in mitigating climate change.

So let us go by the books, and not do things on an ad hoc basis to satisfy our egos.

Carbon in plants

Carbon is a chemical element that is present in both living and non-living things.

The carbon in non-living things is known as the inorganic carbon, or lifeless carbon.

In living things the carbon is known as the organic carbon, and it circulates within an ecosystem.

In living things the percentage of carbon varies from species to species. In some species there is more carbon, while others contain less carbon.

In plants there is more carbon in woody plants like trees than in herbaceous plants like banana.

In plant species carbon content is very much linked to its’ lignin content.

Lignin is an unstructured substance that is regarded as the gluing substance that bonds together cells in plant tissue.

During development of a plant, lignin glues together cell walls in the plant tissue – this process is known as lignification.

In herbaceous plant species like grass and bananas very little lignifications takes place in their systems, so their carbon content is usually very low.

Herbaceous plant tissues contain mostly water, with very little carbon and other substances.

The wood of very old coconut trees has high lignin content, thus its’ wood is of high density and has a high carbon content.

The soft, inner core of very old coconut trees, known as the pit, contains mostly water and has less carbon.  

Dry coconut shell is high in lignin content, and so is high in carbon.

Young coconut trees and fruits contain mostly water in their tissues and therefore contain less lignin and carbon, but as the tree and its fruit gradually mature their carbon contents increase correspondingly.

Carbon in trees

Preliminary research carried out by the Papua New Guinea Forest Research Institute has shown that wood of tree species with high lignin content were more durable than wood of tree species with low lignin content.

Dark colored, high density woods generally contained relatively high lignin contents. 

Moreover, the study also suggested that the lignin content for our tropical hardwoods is higher than those of tree species in temperate forests.

Lignin has no structure but is held together by chemical bonds in which the attractive force between atoms is created by the sharing of electrons.

The bonds that hold lignin together are carbon bonds, which constitute much of the lignin structure.

Therefore, trees with high lignin content are most likely to be high in carbon content.

Pine trees like Hoop, Klinkii and Kauri pine (also known as copal gum tree) contain what are known as resins or gums.

These substances are made up of polyphenols, which are high in carbon content.

Burning of gums or resins exudated by pine trees will emit a lot of carbon.

The copal gum trees in the April Salume area of the Hunstein Range in East Sepik province are valuable forest resources that can be tapped for their gum.

This gum was once used for vanish in the building industry, but due to synthetic vanish flooding the market the use of copal gum has since diminished.

Estimating our forest carbon stock

Papua New Guinea has 29 million hectares of natural forests, thus it is no easy task to estimate the carbon stock for our forest. It would take a lot of resources, effort and time to inventory the forest biomass and estimate the carbon stock for our forest.

The Papua New Guinea National Forest Authority carries out timber stock inventory for Forest Management Agreement areas throughout the country. Forest Management Agreement areas are usually about 300 thousand hectares and can be easily surveyed within a few months.

However, carbon stock inventory would require a lot of resources, effort and time because it involves inventorying biomass above and belowground, carbon in the soil, carbon in deadwood and leaf litter, and the inventory would have to cover a certain percentage of our 29 million of hectares of forest.

To do an inventory of forest biomass for the estimation of our forest carbon stock, it would be more easily managed using satellite technology in combination with ground truthing work.

Without satellite technology, forest inventories for estimation of biomass would be an impossible task.

Satellite technology has improved immensely in the last few decades and biomass estimation for tropical forests is now done using this technology.

Further, satellite technology is constantly improving and the accuracy of the technology is getting better and better every time.

In order to obtain reliable estimates of carbon stocks for our forests, we will have to stratify forests according to forest types or other ecological attributes and inventory them separately.

Each forest type or ecological attribute will have to have a separate a carbon stock estimate.

For each forest type or ecological attribute we will have to develop what are known as “allometric equations” and use those to estimate their respective biomasses.  

Allometric equations are usually derived by sampling a representative population of trees from within a forest type or an ecological attribute.

Once the respective forest biomass estimates for each forest type or ecological attribute have been obtained, these biomass estimates are multiplied by a forest specific or IPCC default biomass conversion factor to obtain the carbon stock estimate for the forest type in question.

Currently, forest carbon stock in PNG can be estimated by multiplying the estimated biomass for a forest type or ecological attribute with the IPCC (2006) default value of 0.5.

The idea that is promulgated is that carbon content of a forest is about half of the total biomass estimate.

This assumption is based on biomass work done in the northern hemisphere, in which carbon estimates from a tonne of biomass range between 0.45 – 0.5.

However, our forest biomass varies significantly between forest types or ecological attribute and therefore there is a need to derive reliable biomass conversion factors to estimate the carbon stock for each forest type.

A forest is made up of many plant species, from large trees to very small herbs on the forest floor, and to do an inventory of all the plants species is a mammoth task.

Research done by forest scientists have shown that 95 – 96 percent of the biomass in forests is found in trees alone.

The other 4 – 5 percent of the forest biomass is found in the other plant species.

Statistical tests carried out on these figures have shown that biomass of trees is highly significant and is representative of the total biomass in a forest type.

Thus forest biomass is usually derived from forest trees, not biomass of other plant species in the forests.

Carbon is also found in forest litter and dead wood on the forest floor and in the soil.

These pools of carbon are somewhat easy to measure using standard scientific instruments or well established forestry techniques, thus carbon content for each forest type can be easily estimated. Representative samples can be used to derive “allometric equations” for each forest type.

Then these allometric equations can be used along with satellite technology to estimate the carbon content of the soil and dead matter for each forest type.

Estimate of underground biomass in forest types is usually estimated at 10 – 20% of the aboveground biomass.

These estimates are also based on work done in the northern hemisphere.

Therefore, it may underestimate the value of biomass and subsequently carbon content in tropical forests.

Former forestry students at Unitech did some root washing work with Professor Bob Johns and George Vatasan in the Morobe Province in the 1990s, and have made some rough estimates of belowground biomass.

Our estimates of belowground biomass ranged between 30 – 40% of the aboveground biomass, which is much higher than the current IPCC default value of 10 – 20%.

Personally, I believe the estimate we derived using our root washing experiments are more reliable, but more scientific research has to be carried out in this area to verify our estimates.

Concluding Remarks

Unless we understand the basic idea behind carbon trade we could be doing things on an ad hoc basis and create all sorts of problems on the national and international scene.

Consequently, this could lead to the name of the country being tarnished on the international arena if something disgraceful happens.

Most forest scientists and biologists are well versed on the science and technology involved in biomass and carbon stock estimation.

However, because carbon trade and other issues pertaining to climate change have been dragged here and there by the government and given to people who have no idea on these issues, forest scientists and biologists have been reluctant to come out and share what they already know or contribute to all the fuss going on.

Therefore, if we are to succeed in carbon trade and other issues pertaining to climate change, appropriate organizations should be identified and relevant issues should be given to them to deal with.

In so doing, the relevant organisations would be doing what they are supposed to do more professionally because it is part of their profession, and they would do it with pride and dignity.

What has transpired so far with carbon trade and climate change in this country is due to the wrong people being given the wrong issues to deal with.

Moreover, because these people lack the technical knowledge but are more interested in the money involved in carbon trade than the work they are supposed do, we have seen nothing constructive being done to date.

Consequently, our country is way behind most members of the Coalition of Rainforest Nations in terms of climate change, REDD and carbon trade development.

Nalau Bingeding is a Research Fellow in the Social and Environmental Studies Division at the National Research Institute