The environmental group Greenpeace is attacking the legitimacy of a 13-year effort to produce carbon credits by saving Bolivia's rainforests -- an effort that other advocates defend as a pioneering and vitally necessary model for fighting global warming.
The scene for the dispute is northeast Bolivia's Noel Kempff Mercado National Park. In 1996, the government revoked four logging concessions to double the size of the protected area. The move saved a swath of trees about the size of Connecticut from being cleared by locals to farm or being degraded by timber companies.
Nearly a decade later, American Electric Power, BP America and PacifiCorp, the project's main financial backers to the tune of $8.25 million, sold half of its first independently audited carbon savings on the voluntary market. It was one of the first and is still today one of the largest-scale efforts to measure and verify forest carbon credits.
At issue is the extent to which similar projects, measured and credited on an individual basis outside of national-scale programs, can reliably reduce carbon emissions. At stake are billions of dollars of relatively cheap carbon offsets that could be traded for greenhouse gases released from industrial smokestacks in developed countries.
Greenpeace, in a report to be released today, calls the Noel Kempff Climate Action Project (NKCAP) an example of the fundamental flaws inherent in such attempts.
The group points to the struggles that the project planners have had in quantifying actual, beyond-business-as-usual carbon savings. They also criticize the project's insurance against the prospect that avoided emissions might move elsewhere or against the trees simply burning down as not nearly enough.
These issues "can't be resolved through tinkering with models or through technological improvements," said senior forest campaigner Rolf Skar. "Global warming is just too important to gamble with. I'm not ready to trust that something that has not yet shown to be reliable will be so in the future."
Indicating a deeply different outlook, the Nature Conservancy, NKCAP's main broker and one of the world's largest conservation groups, strongly disputes this notion.
Lowered expectations, but 'a successful learning process'
"This is really a case of trailblazing," said Sarene Marshall, the conservancy's deputy climate change director. She called the project, begun at a time when forest carbon science was nascent and there was no precedent for structuring such deals, a successful learning process that has shown a path for improvements but has also unambiguously proved that these projects can work.
Other environmentalists back her up. Doug Boucher, of the Union of Concerned Scientists, said that while there have been substantial difficulties along the way, the project has shown that it is possible to model, estimate and make corrections for carbon saving uncertainties.
There is no dispute about many of the specific figures that Greenpeace relies on; it is more in how they are interpreted. Originally, for example, scientists estimated that the 30-year project would save 10 times the 5.8 million tons of CO2 that they figure today. The first projections were revised downward three separate times.
Greenpeace takes this as a foreboding sign that emissions savings are difficult if not impossible to pin down. Marshall, however, said these adjustments are indications of how much the science and on-the-ground measurements have improved over the last decade and how serious efforts are to ensure legitimate credits.
Among a number of other issues, the groups also do not see eye-to-eye on efforts to account for carbon leakage, or the transfer of carbon emissions elsewhere due to reduced timber supply from the logging concessions, and carbon permanence.
The real difference is Greenpeace's distrust of the models and data that form the basis for the project's insurances. Greenpeace says, for example, that the project's estimates of unavoidable leakage -- a total of 16 percent of emissions -- are far too low.
Which comes first, financing or rules?
"I think you get to a point where you have to take a leap of faith," said Skar.
Marshall also noted that the leakage number is on the low end of possible ranges, but she said it is what top economic modelers agreed upon after studying Bolivia's influence on global timber markets. Those leakage factors were lopped off the top of the total emissions savings before the tons were sold as carbon credits.
The underlying issue, beyond the specifics of NKCAP, is whether carbon offset funds should be directed to individual projects.
Practically everyone involved in the debate agrees that countrywide programs that measure deforestation against a national baseline are better because they eliminate carbon leakage within a country's own boundaries -- a fact that the NKCAP experience effectively demonstrated, said Boucher.
In the United States, for example, the House-passed climate bill and the draft Senate climate legislation both heavily restrict international forest offsets to nationally based programs. The bills also, however, allow certain time-limited exceptions for small countries and states in Brazil and Indonesia to submit individual project credits into the market.
Many environmentalists believe that the private capital of the offset market will be sorely needed, in addition to government funds, to build developing nations' capacities to monitor and manage forest carbon programs.
"It's going to take some time to establish national baselines. If you don't allow people to get credit for investing in forest conservation where appropriate, we're just going to keep losing forests," said Glenn Hurowitz, Washington director of Avoided Deforestation Partners, a group that facilitated the creation of a coalition of major environmental, conservation and business groups lobbying for the inclusion of tropical forests in climate legislation.
Forests burn while argument continues
The Nature Conservancy, a member of the coalition along with AEP, Duke Energy, the Union of Concerned Scientists and others, agreed. Marshall said that private investment in so-called "sub-national" project-level approaches will be critical to help developing countries like Indonesia eventually implement and scale major national programs.
"It's a daunting challenge," she said. The Bolivian government, for example, has not yet gotten organized enough to sell its own half of the carbon credits from NKCAP -- to the detriment of indigenous populations who live near in and near the park, slated to receive a yet unspecified share of the proceeds.
Greenpeace takes issue with the entire offset approach. Skar said that ideally, only governments, not private companies that want to compensate for their own smokestack emissions, should fund bonus forest carbon projects. The trade-off for the climate, he said, goes "beyond apples and oranges." But in the nearly certain event that international forest offsets make it into a U.S. cap-and-trade program, he said, they should without exception be tied to national baseline programs.
With companies like AEP set on ensuring that a large enough supply of offset credits exists, Skar said that projects like Noel Kempff cannot be trusted. A similar debate is also occurring at the international level, as countries work to frame a forest carbon agreement as part of a new climate deal this year.
Hurowitz, who also served as Greenpeace's media director until earlier this year, fired back against his former employers, who he said successfully campaigned to entirely bar forest projects from inclusion in the 1997 Kyoto Protocol.
"I think Greenpeace should take some responsibility for the fact that we lost 300 million acres of tropical forests over the last 10 years," he said.