Papua New Guinea seeks to monetise its rainforests as a ‘carbon sink’

To the loggers intent on chopping them down, Papua New Guinea’s rainforests are a chance to make money quickly. To the world’s conservationists — and to PNG’s government — they are a key front in the fight against climate change: a carbon sink to be preserved at all costs. Who will prevail depends on how ready the world is to pay those costs.

PNG’s government, led by Prime Minister James Marape, appeared to have the upper hand in July last year, when French President Emmanuel Macron visited the country and committed to back its efforts to preserve the world’s third largest primary rainforest.

France is a big contributor to a €100mn finance package announced at the UN’s COP28 climate conference in December, which aims to support PNG’s ambition to halt deforestation by 2030.

The package, which is also funded by the EU and the World Bank, includes assistance with carbon trading schemes, seen as crucial to efforts to reduce deforestation worldwide. These schemes allow countries emitting greenhouse gases to offset them by buying carbon credits from nations preventing deforestation.

For PNG’s leaders, Redd+, as the mechanism is known, offers a way to boost the economic development of a country with a GDP that ranks it among the poorest in Asia-Pacific. But some observers worry that international will, and governance on the ground, may be lacking.

Marape is optimistic. In December, he told the Lowy Institute think-tank in Sydney that PNG’s carbon sink has the potential to absorb 100mn metric tonnes a year, while its carbon emissions amount to only 10mn tonnes. “Papua New Guinea is carbon negative, not carbon neutral,” he said, adding: “And this is something that we’re trying to promote in a big way.”

That same month, during COP28, PNG announced that it had signed a memorandum of understanding with Blue Carbon, a broker of carbon credits. The Dubai-based company undertakes to manage tracts of land in heavily forested countries to generate credits, though it has been criticised by some activists for failing to consult local communities and a lack of transparency on deals — claims that it denies.

So far, translating deforestation-prevention efforts into income has proved tricky — owing, in part, to difficulties in verifying that projects in remote rainforests are delivering the promised benefits. Developing nations have delivered a 13.5bn tonnes cut in CO₂-equivalent emissions since 2005, but only 369mn tonnes have been paid for, says the Coalition For Rainforest Nations advocacy group CfRN’s co-founder and executive director, Kevin Conrad, who grew up in PNG and was previously its special envoy for climate, says that disparity has been keenly felt in the Pacific country.

Like others, he is sceptical that the Macron pledge represents a turning point. The money is set to be spent not with local workers but with French export and development agencies, Conrad says. Some in PNG have speculated that Macron’s trip was aimed less at tackling deforestation than at bolstering the prospects of French oil major TotalEnergies, which is developing a gas project in the country.

Andrea Babon, an Australian environmental researcher who has studied carbon trading schemes in PNG, warns that there is a gap between rhetoric and reality. “Leaders have made amazingly strong statements with conviction on the international stage, but that has not translated into leadership at the domestic level,” she says. “Until someone can tackle the political economy of forests in PNG and the strong logging sector, then you are not going to see change on the ground.”

Logging companies, she says, can offer immediate tangible benefits to local communities in the form of jobs and infrastructure such as roads. So can “carbon cowboys” — unscrupulous intermediaries who talk locals into selling them the right to trade credits generated by their forests on the voluntary carbon market, which is used by companies to offset their emissions. In 2022, PNG’s government introduced a ban on new schemes until it could introduce more rigorous regulation.

Locals concur with Babon’s view. “The big issue in PNG is the lack of basic services”, says one PNG-based adviser on carbon schemes. “That’s the main reason communities are giving in to logging.”

Ownership is another issue. If, as is the case in PNG, local communities own the land and the trees, and the national government expects a slice of any value created, then that leaves a “very slim profit” for the developers of new carbon projects. “There is a massive disconnect between the people that own the resources and those that want to exploit it,” Babon says.

Complicating matters is PNG’s febrile political situation, with riots in the capital in January, tribal violence, and recent calls for Marape to face a no-confidence vote in parliament. Politicians have also faced criticism for their response to a landslide last month that killed hundreds of people.

Conrad argues that PNG will, in time, be able to “finally make this real” and follow in the footsteps of Suriname, which has pioneered the sale of Redd+ carbon credits. But he adds that Marape will need to translate such deals into tangible economic progress for the country and local communities. “This has to be real,” he says. “So far, it is mostly broken promises.”