in Mozambique

“Carbon Discredited”: New report on Envirotrade’s N’hambita carbon project in Mozambique

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Does the N’hambita carbon project in Sofala province in Mozambique live up to its reputation? That’s the question posed by a new report published by FERN and Friends of the Earth France. The report finds that the project, which is run by a company called Envirotrade, has “failed to deliver most of its climate change, development, financial and learning objectives”.

The report, “Carbon Discredited: Why the EU should steer clear of forest carbon offsets”, can be downloaded here. The report was written by Jutta Kill. A journalist visited the area in 2012 and wrote a background report for FERN.

The project has run into financial difficulties, despite funding of €1,587,000 from the European Commission for five years from 2003. The project was supposed to be financed by the sale of carbon credits, generated by farmers planting trees and an area of avoided deforestation. When the project started, in 2002, Envirotrade assumed a carbon price of US$15 per ton. But in 2010 and 2011, Envirotrade could sell voluntary carbon credits from the project for around US$5-6 per ton. Kill points out that, “This is only slightly more than the contract price paid to participating farmers, leaving nothing for project costs and overheads.”

Envirotrade told FERN and Friends of the Earth that between 1 January 2009 and 30 September 2012, sales of voluntary carbon credits from the project raised a total of US$1,750,517. Meanwhile, expenses related directly to the project came to US$3,301,474. In July 2012, in response to an article on REDD-Monitor, Envirotrade’s Charles Hall explained that,

The financial shortfall, along with all other Envirotrade expenses, has been covered almost entirely by the personal generosity of Envirotrade’s shareholder, Robin Birley.

Local communities living in the N’hambita project area were not involved in the design of the project. In the Carbon Discredited report, Kill notes that, villagers were unlikely to have fully understood the nature or scope of the project they were joining. The journalist, who visited the area in 2012, found that none of the farmers she spoke to in the project area understood the concept of carbon trading.

Many of the farmers in the project area cannot read. Under the contract they signed with their fingerprint, farmers were agreeing to plant and look after trees for a period of 99 years, although they would only be paid for seven years. Kill reports that “The main reason for disbursing the full payment for the contract period during the first seven years is that the sum paid each year would be negligible if spread out over 100 years.”

The CarbonNeutral Company, a UK-based carbon trading firm, is one of the companies that bought carbon credits from the N’hambita project. In 2008, CarbonNeutral Company commissioned a review of the project. While the review is largely positive (“a robust project with compelling climate and co-benefits”), it does raise questions about the seven-year payment period:

“A related, although larger question for the project, is how to deal with permanence. Payments to farmers for reforestation only last 7 years. After that, the project’s philosophy is that the trees will provide enough income and other benefits that they will be sustainably cared for many decades to follow. Although I can understand and emphasize [sic] with this approach, it is unlikely to stand up to the rigor of emerging methodologies.”

One of the local community leaders told the journalist that farmers that already had large areas of fields, or machambas as they are called in Mozambique, benefited far more than farmers with less land:

“The name N’hambita has travelled around the world. But what is there to see here? What have we gained? Not much. The families that already had many machambas made a lot of money, but for the rest of the population, the benefits are small. Some don’t even care about the trees any more. The payment is too small.”

The report concludes that rather than funding carbon offset projects, EU funding should be directed toward measures that will immediately reduce emissions in the EU. Indra van Gisbergen, Forest Governance campaigner from FERN, comments,

“The European Commission should not be investing taxpayers’ money in schemes to offset emissions. Their focus should always be on improving forest governance and securing tenure rights so that communities have control over their forests and can rely on them for their lives and livelihoods.”


UPDATE – 20 June 2013: Article amended to clarify that it was a journalist who visited the project area and subsequently wrote a background report for FERN. Jutta Kill, who wrote the “Carbon Discredited” report for FERN and Friends of the Earth France, has not visited the project area.

Full Disclosure: FERN is one of the organisations that has funded REDD-Monitor. Click here for all of REDD-Monitor’s funding sources.

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