Rainforest Solutions Project

Critics say conservancy project does not meet a key credibility test for carbon credits

It was a bitter fight to preserve one of the world’s largest intact temperate rainforests, and the home of the sacred white spirit bear revered by First Nations.

A long battle had raged, led by environmentalists, who were turning global sentiment against British Columbia in the 1990s with a campaign against forest products.

Then in 2001, the B.C. government announced vast tracts of forest on B.C.‘s central coast would be protected and a new lighter logging system introduced, which had the backing of industry, environmentalists and aboriginals.

By 2008, hundreds of thousands of hectares of land were protected in parks and conservancies.

The government had also introduced laws to limit logging through ecosystem-based management to preserve the pristine wilderness and its rich biodiversity, including old-growth forests, fresh water and critical grizzly habitat. First Nation values were recognized, including monumental cedars.

Now, this conservation initiative is producing a new kind of green gold.

CARBON ECONOMY

The so-called Great Bear Rainforest has become part of the carbon economy.

First Nations are now earning money through carbon credits by reducing the amount they and forest companies are allowed to log as laid out by new B.C. laws. They are also getting credit for the timber they and logging companies were prohibited from cutting after numerous areas were turned into conservancies.

The premise is that if fewer trees are logged, theoretically it means that more carbon dioxide will be sequestered from the atmosphere. Those tonnes of carbon dioxide – or greenhouse gas emissions – reductions can be sold in the new carbon economy to help industry and governments offset their emissions.

In the Great Bear Rainforest’s first carbon transaction, the Crown corporation Pacific Carbon Trust (PCT) has purchased 300,000 tonnes of carbon reductions from nearby First Nations for an undisclosed price.

It’s likely the carbon dioxide reductions were valued at more than $2 million, but neither the First Nations nor PCT will say. The six First Nations – Nux-alk, Wuikinuxv, Metlakatla, Kitasoo, Heiltsuk and Gitga’at – hope to sell millions more credits at home and globally in the next 25 years.

The idea is that the carbon credits will fetch a premium because of the “charisma” of the Great Bear Rainforest.

But there’s a catch. In order for the carbon credits to be considered legitimate – both under British Columbia’s system and under other global standards – they have to pass a key test called “additionality.”

That test must show the project – in this case, the conservation of the forest – only went forward because revenue from the carbon credits made it viable, helping overcome some financial or technical barrier.

It’s an issue B.C.‘s auditor general is already examining in a review of the PCT expected to be released this spring.

CARBON ECONOMY

The so-called Great Bear Rainforest has become part of the carbon economy.

First Nations are now earning money through carbon credits by reducing the amount they and forest companies are allowed to log as laid out by new B.C. laws. They are also getting credit for the timber they and logging companies were prohibited from cutting after numerous areas were turned into conservancies.

The premise is that if fewer trees are logged, theoretically it means that more carbon dioxide will be sequestered from the atmosphere. Those tonnes of carbon dioxide – or greenhouse gas emissions – reductions can be sold in the new carbon economy to help industry and governments offset their emissions.

In the Great Bear Rainforest’s first carbon transaction, the Crown corporation Pacific Carbon Trust (PCT) has purchased 300,000 tonnes of carbon reductions from nearby First Nations for an undisclosed price.

It’s likely the carbon dioxide reductions were valued at more than $2 million, but neither the First Nations nor PCT will say. The six First Nations – Nux-alk, Wuikinuxv, Metlakatla, Kitasoo, Heiltsuk and Gitga’at – hope to sell millions more credits at home and globally in the next 25 years.

The idea is that the carbon credits will fetch a premium because of the “charisma” of the Great Bear Rainforest.

But there’s a catch. In order for the carbon credits to be considered legitimate – both under British Columbia’s system and under other global standards – they have to pass a key test called “additionality.”

That test must show the project – in this case, the conservation of the forest – only went forward because revenue from the carbon credits made it viable, helping overcome some financial or technical barrier.

It’s an issue B.C.‘s auditor general is already examining in a review of the PCT expected to be released this spring.

NO PUBLIC DISCUSSION

Critics say the strange partnership in the Great Bear Rainforest between First Nations and the B.C. government (the province shares in the ownership of the credits) does not pass this additionality test.

All the key players knew in the early-2000s that significant portions of the forest were going to be preserved on the central and north coast, says Ben Parfitt, a resource policy analyst with the Canadian Centre for Policy Alternatives. And yet, there was no talk publicly about the forests’ carbon-storing potential by the province, industry, environmentalists and First Nations, said Parfitt, who has examined two other controversial forestry carbon projects in B.C.

“I fail to see how this project in any way results in the storage of additional carbon beyond what was contemplated through outright attempts to conserve forests and to move the industry towards a new form of logging,” said Parfitt.

Historic public government documents reviewed by The Vancouver Sun that preceded the areas being protected and the new lighter logging system enacted into law do not mention carbon credits.

While there was no public discussion of credits, a $120-million economic development fund was set up for First Nations.

The provincial and federal governments each ponied up $30 million, and philanthropic organizations, largely from the U.S., put up the other $60 million.

But First Nations representatives say they were having internal, government-to-government discussions with the province on the Great Bear Rainforest during the past decade, and carbon was on the table as early as 2006.

That work culminated in March 31, 2009, when an amended ministerial order was signed, putting in place ecosystem-based management on the central and north coast, according to Coastal First Nations executive director Art Sterritt.

Carbon was mentioned publicly for the first time in the preamble of the amended 2009 order.

By the end of 2009, First Nations had signed an agreement to formally work on carbon credits with the province. They signed a deal on Sept. 28, 2011, that allowed them to share in the benefits of the credits on Crown land. (The province gets 50 per cent of the credits, but has no plans to sell them).

COMPENSATION

Without an agreement that they could share in carbon credits, the First Nations would not have given their approval for the protected areas or ecosystem-based management system, said Sterritt.

These early discussions on carbon storage and the need for First Nations’ sign-off on land-use plans provide the basis for additionality, said Sterritt.

He stresses at the same time as the Great Bear Rainforest was slated for protection, First Nations were finally getting a share in logging. The carbon credits not only compensate for the loss of logging from protecting forests, but will also provide money for conservation, monitoring, tourism, marine-use planning and other economic opportunities, he said.

The $120 million provided by the federal and provincial governments and philanthropic organizations was not enough to carry out these activities, said Sterritt.

The Coastal First Nations provided The Vancouver Sun with a list of 24 documents, including emails to the provincial government, which they said prove carbon credits were instrumental in getting agreement on land-use planning.

Among those was a resolution from a Dec. 12-13, 2006 meeting in Vancouver when Coastal First Nations agreed to explore the potential of carbon credits. Garry Wouters, policy analyst with Coastal First Nations, is blunt in his assessment of what would have happened to the protection of the central and north coast without carbon credits flowing to First Nations.

“Everything would have fallen apart – the protected areas and everything,” he said. “The enviros would have walked away and we would have said, ‘There’s no deal here’.”

But University of Victoria economist Kees Van Coo-ten also dismisses any notion the Great Bear project meets the test of additionality, saying it can’t be argued that carbon credits are being produced when the stated aim was to protect biodiversity.

“These credits are all bogus,” said Van Cooten, who has also examined the question of carbon offsets in B.C. forestry projects. “The problem is, if you make the right assumptions, you can justify anything in this carbon business.”

Independent MLA Bob Simpson, who has been a harsh critic of the province’s new carbon trading system, said because both the protected areas and new ecosystem-based logging system required legislation, the Great Bear project cannot meet the test of additionality.

Carbon-trading rules, including those in British Columbia, stipulate that when the activities in a project are required by law they are not eligible for carbon credits.

Calgary-based Stantec, the independent third-party carbon credit validator that signed off on the project, declined to be interviewed on how they determined the Great Bear project met the test of additionality.

However, the B.C. government and the PCT agree the project is additional.

In a conference call with The Sun, officials from B.C.‘s Climate Action Secretariat, the B.C. Ministry of Forests and the PCT made the same argument as the First Nations – that First Nation support was needed to enact the laws that protected forests and created the new logging rules.

That provided the basis for additionality, said Tim Lesiuk, executive director of business development for B.C.‘s Climate Action Secretariat.

But Simpson disagrees. “The claim is that Great Bear was undertaken for carbon, but that’s a rewriting of history.”

Notwithstanding the additionality dispute, it is difficult to determine exactly what is included in calculating the greenhouse gas reductions in the central and north coast.

Neither the First Nations nor the Pacific Carbon Trust will provide the 250-page detailed project report that includes the information.

LACK OF TRANSPARENCY

The PCT wouldn’t release the information because they say it belongs to the First Nations, and the First Nations said they won’t release it because it contains “significant intellectual property” that could be taken for free by another party.

Another controversial forestry carbon project – Darkwoods in B.C.‘s southern Interior – has publicly posted their detailed project reports.

This lack of transparency is a major concern for critics.

“Apparently, members of the public are not allowed to know what the basis of this deal is,” said Parfitt.

Valerie Langer, director of Forest Ethics B.C.‘s forest campaign, also is concerned with this lack of transparency.

“What ends up happening is you have to trust the third-party validator. Why would you do that?” she said.

Langer does not agree that First Nations should get credit for the protected areas that were set aside, but says receiving carbon credits for the new logging system is valid because their support was needed.

“The $120 million for First Nations was part of the agreement to establish those parks, and carbon credits weren’t in the conversation at the time,” said Langer.

The Pacific Carbon Trust has a contract with the six First Nations that allows it to purchase more credits this year and next, but officials says they have no plans to do so.

That means the First Nations will need to sell the credits on the global voluntary market.

The company the First Nations hired to develop the project, Vancouver-based Off-setters Ltd., will be marketing the credits.

Offsetters CEO James Tansey said that because the company has just started trying to sell the credits outside of B.C. in the past week, it is too early to say whether there are any takers.