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Unclean development mechanism

Blessing Karumbidza, Wally Menne

10 / 2010

‘The funding of climate change adaptation and mitigation-oriented programmes in Africa has opened up new forms of resource imperialism, extractive investment and land grabbing opportunities, in particular for European and Chinese companies,’ writes Blessing Karumbidza. Land-intensive projects negatively affect the livelihoods of people who rely on land for food and other resources. The case of Idete village in Tanzania, the site of a plantation by Norway-based Green Resources AS, is an example of how supposedly ‘clean development’ projects don’t always benefit the community.

The use of plantations as a climate change mitigation strategy was heralded in some quarters as an innovative means of addressing the problem while leading to development in areas where such activities were rolled out. Unfortunately, the jury is out on the issue and the judgement is not as exciting. Preliminary results indicate that the plantation strategy is doomed to fail and cause more harm than good for those countries buying into this market mechanism. The funding of climate change adaptation and mitigation-oriented programmes in Africa has opened up new forms of resource imperialism, extractive investment and land grabbing opportunities, in particular for European and Chinese companies. To make this possible, terms such as ‘afforestation’ and ‘reforestation’ are deliberately confused and plantations are referred to as if they were forests. In the process, large grasslands and sensitive bio-diverse areas are destroyed in the race for establishing monoculture tree plantations of water-guzzling and invasive exotic trees, such as eucalyptus and pine, in the name of climate change mitigation and development. Facilitating this process, through means reminiscent of 19th century colonial expansion, are western- (largely, IMF, World Bank and UN) aligned think tanks as well as the private sector. Think tanks and businesses team up by influencing and ambushing local governments with promises of funding and development, to allow the expropriation of land at an alarming rate, inviting suggestions of a ‘new scramble for Africa’ (1) and ‘carbon colonialism’. (2)

LAND: THE NEW OBJECT OF IMPERIALISM

Funding of climate change-related projects has led to the further commoditisation of Africa’s land and natural resources while exploiting African labour to extract the surplus for Western accumulation. Proponents of this development paradigm have introduced a discourse that views Africa’s land as degraded, marginal and of limited economic value. To facilitate ‘economic use by foreign firms’, thousands of hectares of land are being leased (in some cases sold) in the name of ensuring lasting land regeneration and conservation of natural resources, therefore deriving economic benefit. According to Mwesiga Baregu (3) this shift is consistent with the new character of globalisation that has rendered African labour redundant. The new object of imperialism is Africa’s land. The justification given for financing the Clean Development Mechanism (CDM) and the UN’s Reducing Emissions from Deforestation and Forest Degradation (REDD+) projects to conscientious shareholders, as well as critical voices in Africa, is that these are development projects which will go a long way towards addressing the conditions of poverty in many rural African communities.

The transfer of forest management to the local level in many developing countries is seen as a panacea for livelihoods and for managing forests. In Tanzania the transfer of land management to the local level has opened the floodgates of foreign corporate entities swindling land from unsophisticated rural governance structures in the name of development. Using two outcome measures (adjusted household forest income and the share of adjusted household income from forest products) to evaluate the effect of the forest-sector reform on rural livelihoods, Jagger suggests a limited effect on livelihoods. (4) However, he qualifies his finding stating that ‘for households and forests affected by the reform there is no evidence that both favourable livelihood and sustainability outcomes have been achieved’ and that ‘livelihood improvements are largely attributed to institutional failures, including selective enforcement that favours the wealthy and an absence of meaningful community engagement.’ (5) Using the case of Tanzania, Blomley et.al. (6) also consider the importance of institutional arrangements for deriving benefits from forest resources. The recent rush for Africa’s land through bio-fuel and climate-change related projects have led to a situation where tree plantations take precedence over agriculture, with scary implications for national and local food sovereignty. This has led to land grabs affecting many regions of the African continent.

Some examples of this land grab include the move by the Ethiopian government, close to both the USA and China, to earmark nine million acres for lease to investors using the persistent famine in the country as justification. It is alleged that millions of acres have already been ‘allocated’, with Saudi Arabian companies paying 50 US cents per acre. Behind the deals is Sheik Mohammed Al Amoudi – one of the world’s 50 richest people – who controls big parts of Ethiopia’s private sector. Saudi Arabia is not only involved in Ethiopia, but also in Tanzania, Mali, Senegal and Sudan. China has leased nine million acres in Congo-Kinshasa, Qatar has leased 250,000 acres in Kenya, and Indian companies have leased 800,000 acres in Sudan. Companies from Sweden and Norway have accessed land to cultivate jatropha for bio-diesel and timber for carbon credits. In Madagascar, such large-scale land transfer led to the mass movement that overthrew the president, who had given half of the island’s arable land to the South Korean company Daewoo for 99 years. The people thought of this as re-colonisation. The Daewoo deal was expected to yield road and infrastructure development, similar to many deals made between African governments and foreign investors. One underlying factor in these deals is the lack of home grown development plans, focused on local African production and consumption.

Viewing forests as solutions to climate change has opened up a rush for African land. Robeldo et al. (7) place forests as both a cause and solution to climate change suggesting that ‘forests can play a central role in climate change’ and that ‘greenhouse gas emissions from forests … account for up to 25 per cent of the current yearly emissions worldwide. This analysis does not shed light on why the main activities and contributors of the emissions that cause climate change are located away from the forests expected to facilitate its mitigation. The interest in African land, forests and timber plantations from European countries such as Norway and France, for instance, is pursued in the name of solving climate change. Norwegian company, Green Resources AS has mapped out its stake in Africa, claiming plantations in Tanzania, Mozambique, and Uganda, and is still searching for more land in the pursuit of carbon credits, in a manner that has inspired critics’ use of terms such as ‘carbon imperialism’. Climate change investment possibilities in the ‘forest sector’ have created massive opportunities for developed countries while presenting a threat to developing country economies and communities.

THE CLEAN DEVELOPMENT MECHANISM CONCEPT

Carbon financing is a top-down response to climate change; based on the skewed view that money can always ‘fix the problem’. Usually this means funding more of the environmentally damaging activities that created the problem in the first place, while avoiding any major changes to the dominant economic system. (8) This approach serves the wealthy countries in the North, allowing continued extraction and industrial processing of the natural resources of marginalised communities in the global South. Fossil fuels make up a big part of the resources that are transferred via this one-way system, concentrating the benefits of polluting industrial activities in one country, but the CO2 emissions are shared globally in the form of climate change. To date, attempts to finance climate change mitigation projects have had limited success; although many have demonstrated a greater potential to perpetuate conditions that drive, rather than ameliorate, climate change, and thus cause further problems for affected local communities. (9)

Since the establishment of the UN Framework Convention for Climate Change (UNFCCC) in 1992, various attempts have been made by industrialised countries to harness or to limit greenhouse gas (GHG) emissions. This culminated in the Kyoto Protocol in 1997 (although it was only ratified in 2005) which allowed for investment in ‘clean’ or low-carbon emission development in developing countries under the CDM. The carbon credits earned from such projects through ‘additional emission reductions’ could then be used by polluting industry and other sources of greenhouse gases in ‘Annex 1’ countries to offset a portion of their emission reduction targets. Theoretically, this would result in greater overall emission reductions, and simultaneously stimulate ‘sustainable development’ in developing countries.

Evidently, the climate benefits hoped for from the CDM have not been forthcoming. Despite the fanfare, and a vigorous and costly UN and World Bank campaign to promote it, the CDM has failed to deliver much more than a fraction of the GHG reductions hoped for. Instead it has led to financial speculation and this in turn to has led to corrupt relationships between consultants and project owners. (10) Global GHG emissions have increased rather than decreased, and their climatic effects will be experienced far into the future in the form of extreme weather events that cause ecological and infrastructural damage and human suffering.

CASE STUDY: TANZANIA

The study focused on Green Resources’ tree plantation project, located on moist grassland near Idete village in the Mufindi area of southern Tanzania. Tanzania is a large country with diverse peoples and an extensive wildlife resource that attracts many foreign tourists. However, the main form of employment available to its 38 million people is subsistence agriculture, in association with a vast informal industrial sector based on the exploitation of natural resources, notably timber from forest and woodland areas. The majority of its people still living in under-resourced rural areas facing challenges in energy, communication, appropriate technology transfer, as well as having low literacy levels, all of which threaten the standard of living.

The Tanzania case study shows that CDM financing is used to influence national governance structures in order to facilitate cheap access to natural resources, including land. It is driven by the profit motive, often at the expense of the developing countries where it is used, causing unintended, but not unanticipated, environment and social harm. The climate finance industry assumes that it is needed and that it will be effective against climate change. It also assumes that better alternatives do not exist, or would be poor substitutes for large-scale climate change mitigation schemes such as carbon offset/trading. The wisdom of this seems unassailable, because the Kyoto Protocol has decreed it so by supporting the use of market mechanisms. Simpler, more cost-effective solutions such as organic agriculture have been effectively excluded, probably because they offered few benefits to the carbon trading fraternity, and could even undermine business as usual for industrial-scale agriculture.

The case of Green Resources ruining valuable grassland to make money from perpetuating pollution demonstrates how ludicrous carbon trading is. Under the CDM it is already possible to use tree plantations for projects intended to reduce atmospheric CO2, even though it is unlikely they could demonstrate additionality (sequestering more carbon than the grassland they replace). REDD+, however, which could theoretically reduce GHG emissions from forest loss by between 12 and 20 per cent, is only now being debated for inclusion in a post-Kyoto climate regime. Unfortunately it is unlikely to be approved without being linked to a market-based mechanism like the CDM.

THE BEGINNING OF CLIMATE FINANCE ACTIVITIES IN TANZANIA

A 2002 report by Norwatch, a Norwegian watchdog NGO, raised concerns about the carbon-offset efforts of Norwegian-owned Green Resources with a tree plantation operation in Uganda. Green Resources, then known as Tree Farms Ltd., had embarked on a campaign to acquire land in different countries in East Africa with a view to establishing vast tree plantations. The areas targeted were in remote rural areas, and the company acquired long leases on land in southern Tanzania. Harald Eraker, the author of the NorWatch report, ‘CO2lonialism’, opened a can of worms that continues to squirm under the scrutiny of Norwatch. In 2009 Norwatch investigated the activities of Green Resources, and in June 2009 published a highly critical report focussing on how community land was leased to Green Resources. When Timberwatch learned that the company was attempting to register its controversial plantations as a CDM reforestation project, it decided to investigate further. During the UNFCCC meeting in December 2009, Timberwatch released a preliminary report based on the initial investigation. The defensive reaction from Green Resources only served to confirm many of the problems identified. (11) Further information on the ‘proposed’ Idete CDM plantation carbon sink project, which is already being established despite not yet being registered under the CDM, can be found the website of the World Rainforest Movement and in the original project description document. Green Resource’s elaborate plans (available on the company’s website) for expanding its plantations in the region are a real reason for concern from a land grab and livelihood sustainability point of view.

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A Green Resources Ltd eucalyptus planting near Idete – Extremely poor plantation planning and management is evident. Tree plantations provide little employment for local people and eliminate opportunities for traditional farming activities.

THE CDM-ASSOCIATED TIMBER PLANTATIONS IN TANZANIA

The Tanzanian subsidiary of Green Resources has already planted 2,600ha of its cheaply acquired 14,000ha of land obtained from the Idete community. It hopes that 7,000ha of this land will be planted with a combination of eucalyptus and pine trees. The community is also encouraged to do its bit by planting trees which the company has promised to buy. The primary motivation given for this investment is to earn income from the emerging carbon market made possible by climate change. Once again, Africa’s land and its forests, which have served as the lungs of the world, especially for the developed economies which could not have industrialized without exploiting land, is being called to service the developed world. Green Resources is hoping to acquire not less than 170,000ha of land in Tanzania alone, with the bulk (142,000ha) coming from the biodiversity-rich and high rainfall southern highlands. To achieve such a land grab without making a hefty payment, the company banks on the poverty, illiteracy, ignorance and associated desperation the communities. The Tanzanian government, like many unimaginative African regimes that exchange natural resources for low-return foreign direct investment, is a happy customer and facilitator of such projects.

The irony of Norwegians’ support for this type of investment must be contextualised. Norway occupies an ambivalent position. On the one hand, Norway is a major oil producer and exporter through the state-owned company Statoil, and contributes substantially to global greenhouse gas emissions. On the other hand, Norway wants to be seen as a moral superpower and therefore seeks to position itself with progressive policies (in matters of social, environmental, human rights and other development issues). Claiming interest in taking the lead in climate mitigation, Norway joined hands with France through the Oslo-Paris accord, which appears to be nothing more than a platform to dominate and advance the acquisition of land as well as position itself at the forefront of the carbon market. This would make Norway the vanguard of the modern resource imperialist onslaught. In other words, Norway has become a modern day colonial regime of a special type whose companies such as Green Resources enslave local communities on their own land. Taking advantage of the climate change debate, the Norwegian government committed itself to mitigation projects around the world through the purchase of carbon reduction credits for the purpose of offsetting its domestic carbon emissions. As such, the Green Resources plantations in Tanzania are important as they are hoped to rake in 400,000 carbon credits.

GREEN RESOURCES: PROMISES, ACTIVITIES AND INVESTMENT

Green Resources owns and operates the Sao Hill timber mill (formerly owned by the Tanzanian government), where it produces transmission poles as well as carpentry. According to the Green Resources’ 2008/2009 company report, the company is Africa’s ‘leading forestation company’ which is ‘growing trees to generate carbon credits and bio-energy and to manufacture wood products’ priding itself in the fact that it has ‘probably planted more new trees than any other private company in Africa during the past ten years; a record 4,200ha of new forest was planted in 2008.’ The same report also indicates that the company ‘holds more than 200,000ha of land for future planting and conversion, and started the first harvest from its own forest in 2008’. The CDM aspect of the Green Resources project in Tanzania is simply part of an array of other timber-based products. Talking to different officials at Green Resources, there is no consensus on whether the CDM aspect is the main activity in Tanzania or what percentage of its tree plantation-based activities it occupies. According to the company report, ‘all green resources carbon offset revenues will be reinvested in new carbon offset activities or be used for community developments in Africa, making the credits some of the most attractive in the world.’

SOCIAL AND ECONOMIC IMPACTS ON THE COMMUNITY

On paper, Tanzanian land ownership systems empower the local community to make decisions on transactions with businesses regarding their land. However, local communities such as those at Idete and Makungu do not have the sophistication to deal with international land speculators masquerading as investors and agents of development. For this reason, such investment is organised through a national government agency, the Tanzania Investment Corporation (TIC). Based on experiences in Southern Africa, Brazil and India, it is the view of the researcher that the land equation should form the basis upon which these investment programmes are either accepted or vetoed, taking into consideration the government of Tanzania’s own admission that ‘land is the engine for economic growth and population survival. In Tanzania 80 per cent of GDP comes from agriculture.’ Therefore any mismanagement and careless transfer of land would have severe consequences for its people. As no one can own land, but only holds it in trust for future generations, the fact that the present generation can commit the land they hold in trust for a period of time longer than they will be alive should be considered an ethical issue. On this basis, the 99-year leases offered to investment companies are seen as morally and ethically indefensible. Other independent international bodies such as the Food and Agricultural Organisation (FAO), the International Fund for Agricultural Development (IFAD) and the International Institute for Environment and Development (IIED) also considered the possibility that these massive agricultural (and plantation) investments in Africa could be either land grabs or a development opportunity, suggesting that land is ‘rightly a hot issue because land is so central to identity, livelihoods and food security’.

LAND AS A LIVELIHOOD ANCHOR AND IMPACTS ON LOCAL COMMUNITY ACCESS TO FOOD AND WATER

Tanzania is largely a rural economy and ownership, access to, and control of land is central to securing livelihoods. Investments that require vast land areas such as tree plantations, introduce pressure on poor communities. Green Resources is going all-out to persuade individual community members to grow timber in woodlots on community land, with the intention of sourcing the timber when mature; but also to derive immediate value from the plantations in their most fashionable and marketable form: as carbon credits. The cumulative impacts of individual woodlots (usually averaging between half to six hectares) of timber results in a negative impact on land availability for food production and other livelihood strategies of these communities.

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Grassland-based livelihoods such as stock keeping are under threat (Wally Menne)

Thus, even if land remains in the hands of the community itself, if the main economic activity on such land is based on the production of a commodity for which the local community has no immediate need or use, it constitutes a form of land theft – as such land becomes practically unavailable to its rightful owners. This should also be contextualised in terms of the cost of clearing and restoring land after timber plantations have been grown on it, which is beyond the financial means of local communities.

Access to food and water has till now been mediated by the market, but has yet to be fully developed in rural Tanzania. Rural communities are operating at the fringes of the market for goods and services, which creates an economic articulation where the idioms of accumulation are stacked against rural people. In this scheme, the urban area is complex, mechanised and modern, while the largely traditional rural area is relegated to being a source of cheap labour and natural resources. One of the most important impacts on livelihoods in rural communities is that on food and water resources. Plantation trees, especially eucalyptus, are major water-guzzlers. In areas where plantations are established, downstream flow reductions are common.

HOW WILL THE COMMUNITY BE COMPENSATED FOR THEIR LOSSES?

The main benefits to the community are expected to accrue from job opportunities as well as infrastructure investment in the area. In the study area at Idete, the low standard of social services such as clinics and schools remains a far cry from what could constitute fair compensation to the community. It is also curious that the company’s business proposal and feasibility study has the only existing cost-benefit analysis on the project. The government departments that sign on these deals did not perform their own studies to consider to extent to which the project could be mutually beneficial. A lack of capacity in community institutions precludes them from understanding the deals they are signing, let alone undertaking a cost-benefit analysis of the projects to which they commit their resources. While there is evidence of communication between company representatives, district officials and community leaders, the quality of such processes is doubtful. Traditional village leadership does not always represent every community voice. The rural areas of Idete and Makungu do not have community property institutions, but have traditional authority systems that link to government institutions. These are also paid and supported by the central government. The payment to traditional authorities shifts their loyalty away from the community to those that pay them.

CONCLUSION

Climate funding directed towards land-intensive plantation projects impacts negatively on communities by undermining rural people’s land-based livelihood strategies and leaves them more vulnerable to poverty and food insecurity. In its enthusiastic attempts to pass off environmentally and socially harmful tree plantation projects as sustainable and beneficial, Green Resources has exposed just how flawed the CDM is, and in doing so, has provided an invaluable warning to other potential participants in CDM projects. The findings of the research indicate that a working model to bring lives out of abject poverty requires a redistributive public investment regime that is based on enhancing people’s current livelihood strategies. Development for communities with access to land should focus on ensuring high productivity, food sovereignty and food security at the household level. Beyond food security, the next level is to link this production with a market in order to increase household income. Increased food security and household income would improve the household health and access to education. The cumulative impact of this is increased production, which leads to improved standards of living, multiplies income and increases the asset base, brings the poor out of poverty to subsistence and then puts them on track to an improved standard of living. This, however, requires increased government action in the poor sectors of the economy as well as better planning and coordination. It means that sustainable development for communities should focus on enhancing what communities are already doing and mainstreaming such activities. It also means mainstreaming technological innovations which improve the quality of products and shorten their production time. Unfortunately, many African governments do not have a good track record in carrying out these types of development plans which they see as cumbersome. Thus, they prefer to outsource development to private investors.

NOTES

(1) Southall, R. and Melber, H. (eds.) (2009) ‘A New Scramble for Africa? Imperialism, Investment and Development’, Scottsville, University of KwaZulu-Natal Press
(2) Eraker, Harald (2000) ‘CO2lonialism: Norwegian Tree Plantations, Carbon Credits and Land Conflicts in Uganda’, Oslo, NorWatch
(3) Personal interview, 2010
(4) : German, Laura A.; Karsenty, Alain and Tiani, Anne-Marie (eds.) (2010) ‘Governing Africa’s Forests in a Globalised World’, London: Earthscan:117
(5) Ibid.
(6) Ibid., 126-143
(7) German, Laura A.; Karsenty, Alain and Tiani, Anne-Marie (eds.) (2010) ‘Governing Africa’s Forests in a Globalised World’, London: Earthscan: 354
(8) ‘Carbon Trading 101’, Gloucestershire, UK, Sinks Watch (available at: www.sinkswatch.org/campaign/carbon-trading-101)
(10) CDM Watch
(11) - - (2009) ‘Green Resources Ltd Reaction to Timberwatch Preliminary Report’, Athens, Carbon Positive (available at: www.carbonpositive.net/fetchfile.aspx?fileID=174).

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