Aggressive expansion of carbon offset deals in Africa, island states raises crucial questions

Over the last year, the carbon offset industry has faced a barrage of investigations on instances of abuse and attracted disapproval from multiple quarters. The spotlight now is on the development of United Nations-based markets under Article 6 of the Paris Agreement and new labels that promise to instill renewed faith in offsetting, including, in the control of large swathes of land in the developing world.

A series of carbon offset agreements that a UAE-based company signed successively in 2023 garnered attention before and during the 28th Conference of Parties to the United Nations Framework Convention on Climate Change (COP28). These deals involve the transfer of carbon rights over vast expanses of land for reforestation, forest restoration and conservation efforts.

The company in question is Blue Carbon, a fully owned subsidiary of Global Carbon Investments, owned by Sheikh Ahmed Dalmook Al Maktoum, a member of the Dubai Ruling family, according to the company’s official profile.

In February last year, a memorandum of understanding (MoU) was signed between the government of Tanzania and Blue Carbon. It aimed to support the government’s efforts to conserve and manage 8 million hectares of forest resources, including 56,000 hectares of mangroves. 

Subsequently, a number of other such agreements were signed, by Blue Carbon as well as other private entities.

Zimbabwe’s deal was made at a time when carbon credits from the country’s Kariba REDD+ project, spread over almost 785,000 hectares of the country, came under heavy criticism.

Observers have rightfully brought attention to the lack of transparency in these deals, questioning the equitable distribution of benefits, responsibilities and risks. Are the rights and interests of communities being overlooked, putting them at the risk of displacement or loss of access to their lands? Additionally, concerns linger about the environmental integrity of the project: Will there be transparent and measurable outcomes to ensure its sustainability?

Fresh coat of green for old forests

Government deals transferring carbon rights over vast swathes of land are not new. Back in 2010, a company based in England faced corruption allegations in connection with a deal involving 400,000 hectares of Liberian land for carbon credits. Fast forward to 2021, and a carbon offset agreement for 2 million hectares of land in Malaysia’s part of Borneo Island, signed with foreign entities, became contentious. 

This problem is not isolated; similar deals in the past have crumbled under the weight of investigations revealing widespread and serious abuses.

The concerns are age-old but the narratives surrounding these deals have evolved. Recent investigations have thrust the issue of integrity into the spotlight, especially concerning land and forest-based carbon projects. The industry has naturally taken note and is busy forging standards and integrity pledges to see that the practices stand up to scrutiny.

The development of UN-based markets under Article 6 of the Paris Agreement is serving as the backdrop for carbon offset deals now. Carbon credit-based ventures are now adopting the label of ‘Article 6 aligned’ emission reductions. 

This branding adds value, at least until there is clarity on what Article 6-based carbon credits actually mean and how they would significantly differ from the offsets of the past or the present. 

In these deals, a newer question of Nationally Determined Contributions (NDC) is essentially one that is rooted in concerns that have persisted for a long time — the sovereign concerns.

If cheaper, easier ways of mitigation are sold to foreign companies, and thus discounted from a country’s own carbon mitigation achievement, will the countries not be left with options that cost them more to meet their climate targets? Have the countries sufficiently weighed the cost of committing to sell huge chunks of mitigation outcomes for years? 

Moreover, with the baggage of conditionalities that may accompany such deals, are foreign private companies justified in dictating how sovereign states in Africa, or any other part of the world, should utilise a tenth, a fifth or a third of their own forests?