As COP28 gets under way in the United Arab Emirates (UAE) today, green colonisation will be top of mind as financial carbon credits are being traded for real land belonging to indigenous people. As the world prepares to announce more energy transition commitments, the highlight will be carbon for land schemes against the backdrop of the gas deals expected to be discussed during COP28.
The idea of carbon offsetting as we know it today was conceptualised in the 1980s. A US utility that owned a coal-fired plant wanted to offset the emissions of its plant. After investigations it discovered that this required the planting of 52-million trees, which was impossible given the plant’s location in Connecticut. The utility executive suggested planting these trees in Guatemala. This cost them $2m, pennies relative to the true cost of emissions.
And so began carbon trading, a global market that allows countries and businesses to buy and sell carbon emission permits, or credits. The goal is to create a financial incentive for polluters to reduce their emissions. The global carbon market was estimated at $909bn in 2022.
Carbon trading as we know it today is far more sophisticated. It now allows for rich countries that won’t meet their emissions targets to buy them from poorer countries through paying or loaning money for projects. The most common schemes are those that dictate to global South countries to cut emissions by decommissioning coal-fired plants or buying land and promising to rehabilitate indigenous land alongside affected communities — the latter referred to as land-based carbon offsets.
This is a mechanism whereby landowners generate carbon credits through predominantly afforestation or reforestation and sell these carbon credits to companies or individuals. The ownership and carbon price setting is a sham and the monitoring of these schemes nonexistent. The schemes are popular in the Amazon, Indonesia and recently Africa. The projects aim to rehabilitate land and mangrove forests, plant trees, and ensure soil and wildlife conservation.
Except there’s a catch — the projects are either never implemented or local communities do not benefit and millions are siphoned off. Wealthy corporations are now buying this agricultural or reserve land and promising land reforms so they can sell credits — truthfully one could use it to farm.
And that is how UAE-based Blue Carbon could exclusively control 10% of Liberia’s land. Its controversial carbon scheme plan could see Blue Carbon (which has no experience in land carbon schemes) undermine the sovereignty of Liberia by having a private company controlling a significant portion of land and potentially displacing and marginalising indigenous people from their land.
There has also been a lack of accountability and transparency from both Blue Carbon and the Liberian government. The other four countries Blue Carbon has agreements with are Zimbabwe, Zambia, Kenya and Tanzania. It is expected that these offsets will be sold to the UAE, which is ramping up its oil and gas exploration and production.
Before Blue Carbon there was South Pole and its now former CEO Renat Heuberger, who also dabbled in carbon trading in Kariba, Zimbabwe, with a Zimbabwean tycoon. South Pole is accused of profiteering off a huge carbon margin, overstating credits, helping oil companies claim carbon neutrality, accounting irregularities and community abuses.
Aswath Damodaran, a finance professor at Stern, wrote recently that “ESG is beyond redemption. May it RIP”. He argues that good intentions have usurped good sense by allowing sales people to drive the mission and the agenda.
On a continent as vast and diverse as Africa where there are numerous issues to contend with, environmental, social & governance issues have been politicised to make Africans feel bad for prioritising energy security. All we’re seeing now is land grabs, displacement, greenwashing and profiteering.
In a world where Africa’s minerals, agricultural and reserve land are so valuable, taking it through carbon land schemes is devilishly ingenious — a green colonisation through transition loans and land schemes.
• Mashele is an independent energy economist.
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