Beware of fake carbon brokers, warns Indonesian government

Adianto P. Simamora, The Jakarta Post 27 Oct 09;

The government has warned local authorities to carefully review all carbon brokerage firms offering incentives such as huge financial benefits from the forestry sector for engaging in carbon trading.

Forestry Ministry official Wandojo Siswanto said over the weekend that many carbon brokers were now directly approaching regents and mayors, asking them to sign memorandums of understanding (MoU) to develop projects under the REDD (reducing emissions from deforestation and forest degradation) scheme.

"They offer pledges that say the regencies or cities will get a lot of money from REDD projects but they provide no programs," he told a journalist training program in Bogor, West Java, on Saturday.

"Regents and mayors in Kalimantan and Sumatra have been offered such promises. The brokers who claimed to be carbon developers launch intensive campaigns to convince regents to sign the MoUs. But at the moment not a single cent goes to local administrations."

Wandojo said the brokers would then sell the MoUs on the international market as part of an elaborate money-making scheme.

The training, which aims to raise awareness of the Copenhagen climate conference in December, was jointly organized by WWF-Indonesia and the Society of Indonesian Environmental Journalists (SIEJ).

Wandojo, who is also head of the country's representative group for the forestry sector at the international climate change conference, declined to name the brokers involved, saying there were at least 20 international carbon brokers in Indonesia's forestry sectors.

"There are misperceptions about the REDD, particularly among local administrations who see carbon trading as something that could earn them some income. It makes it easy for the carbon traders to convince the regents and mayors," he said.

Wandojo admitted his office could not do much to resolve the problems since the regional autonomy had handed forest management to the local authorities.

The Copenhagen conference is likely to agree on REDD, an alternative scheme to cut greenhouse gas emissions and slow the onset of climate change.

Indonesia was the first country to issue a regulation on REDD, allowing indigenous people, local authorities, private organizations and businesspeople, both local and foreign, to run REDD projects.

Under the regulation, permits for REDD projects would only be granted to people who are certified to control forests.

The Aceh administration reportedly canceled an MoU with a carbon broker just minutes before its signing ceremony last year.

Delegates from all over the world are slated to gather in Copenhagen in December to decide on whether the REDD should be included in the new global climate agreement.

The new agreement would replace the existing Kyoto Protocol on emissions cut targets, which will expire in 2012.

Doddy Sukadri from the National Council on Climate Change (DNPI) said REDD projects had the potential to help the country cut about 2.3 million tons of emissions by 2030.

"But a lot of crucial issues related to the REDD scheme remain unresolved. We can look at difficult issues, especially regarding the scheme's financial sources, during the climate change conferences this year," he said.

The government has said that the REDD could be effective in Indonesia if the main drivers of deforestation and forest degradation, such as illegal logging and forest conversions, could be addressed properly.

With about 120 million hectares of rainforest, Indonesia is the world's third most heavily forested nation.

However, the deforestation rate is still high. About 1.08 million hectares is cleared each year by rampant illegal logging and forest fires.