"‘Cowboys’ and intermediaries thrive in Wild West of the carbon market", 9 January 2024

"When Andrea Babon learned about what a company called Kanaka Management Services (KMS) had been up to in Papua New Guinea, she was aghast at the apparent incoherence of its plans. The India-based carbon credit consultancy had scoped out a forest conservation project in Oro province that would, KMS claimed, reduce millions of metric tons of annual carbon emissions that could then be sold as credits through the voluntary carbon market.

“I find it hard to believe they are legitimate carbon project developers based on the poor quality of their project design documents,” Babon told Mongabay in an email. In 2022, the Australian researcher and expert on the forest conservation scheme known as REDD+ worked with colleagues in PNG and beyond to bring KMS’s plans to the attention of the PNG government and Verra, the world’s largest carbon credit certifier...

REDD+, short for reducing emissions from deforestation and forest degradation, is a forest conservation strategy that, in one iteration, seeks to monetize the emissions of carbon “reduced” as a result of a project. Part of that money is then supposed to support the economic development of communities often responsible for the sustainable or improved forest management leading to those carbon savings.

Babon and her colleagues’ criticisms of the Oro province project included technical issues — for example, that the project documents didn’t identify how KMS would address forest loss and degradation in the proposed 418,000-hectare (1.03-million-acre) area. Those missing details called into question whether the project would really save the 800 million metric tons of carbon dioxide over the 100-year life span of the project as KMS claimed...

The project may also cause problems for communities in the vicinity, commenters noted, because it wasn’t clear how or whether KMS had informed local communities about its intentions. And Babon had noticed that parts of KMS’s written submission referred to roads that aren’t present in the project area, and railways, which don’t exist outside of mining sites in PNG, as potential drivers of deforestation....

KMS hasn’t limited its work to Oro province. Babon also found it had a second, even larger project in another part of PNG. In that case, it covered parts of four different provinces but was still riddled with similar issues. Nor is PNG the limit of the company’s ambitions. It’s been working in the Democratic Republic of Congo (DRC) on a project that was rejected by Verra, and in Zambia. Both projects in Africa had also raised eyebrows about the firm’s expertise and concern for community rights...

KMS’s approach to community engagement around planned REDD+ in the DRC appeared to have mirrored Sucre’s descriptions, according to Mongabay’s reporting in 2022. Communities claimed they received scant details from KMS’s representatives, who spent 15-45 minutes explaining the project in each community. The forms they asked people to sign were in English and French, in an area where literacy rates are low and most residents speak little French and no English...

KMS hasn’t made representatives available to speak with Mongabay, despite repeated requests since May 2022, and the company hasn’t answered specific questions about the project...

Elsewhere, in the Malaysian state of Sabah, a group led by an Australian consultancy and a Singaporean company signed an agreement with state leaders to secure rights to sell credits for carbon and other “natural capital” from 2 million hectares (4.9 million acres) of forests. Undeterred by widespread condemnation from Indigenous rights groups in Sabah and abroad for not including communities in the decision-making process, the project is moving forward, according to Jeffrey Kitingan, Sabah’s deputy chief minister and the project’s most vocal backer. Kitingan and his associates have declined to speak with Mongabay and answer key questions about the agreement despite repeated invitations...

Around 90% of intermediaries don’t share what they charge or how much they make from credit trades. Average rates for the intermediaries who did report their takes were about 15.5% per transaction..."