Response: How FERN actively uses forest communities as a political tool depriving them of much needed resources

Terra Global Capital
January, 2018


A response to FERN’s paper “Unearned Credit”

  • Communities working on the literal frontier of deforestation are being used as a political tool by FERN in their recent report – (“Unearned Credits – Why aviation industry forest offsets are doomed to fail”) – a group who emphatically opposes the use of market based solutions without regard to the negative impact it has on forest dependent communities.
  • FERN’s actual target is the ICAO CORSIA mechanism, a much needed and landmark initiative which uniquely brings together government, airlines and NGO’s to develop rules for use of offsets for aviation carbon neutrality. 
  • Accountability of the social and environmental outcomes from forest projects are a much needed and industry has gone to great pains to continually iterate and improve practices - however this does not justify the mistruths perpetuated by FERN, which cannot go unanswered.

What is clear from the recent Fern report "Unearned Credits - Why aviation industry forest offsets are doomed to fail” is that Fern has a negligent misunderstanding of how forest offsets work, but more deplorable is its mission-driven goal to drive away desperately needed financial resources from rural, impoverished communities who protect their forests.  This report has been widely publicized and reported on as a “truth”, further driving away those few organizations willing to reward communities for results and again throwing cold water on a sizable opportunity that the airlines could provide to finance reduced deforestation and degradation around the world.   

Shame on you Fern and others who seek to limit opportunities for communities that desperately need financial resources to protect forests and make a decent living without offering any viable alternatives. Before Fern and others who have never designed or managed a REDD+ program start to criticize the hard work of communities and the partners that support them, they should 1) get their facts straight as the Fern report has numerous completely false statements and gross misunderstandings of the actualities on the ground and how forest offsets work, and 2) they should not misinterpret cause and effect. The Fern reports attempts to claim that carbon offsets are not an effective or legitimate way to reduce deforestation, and that in some way the purchase of offsets funds deforestation. However, in truth, it is the lack of funding to communities that leads to deforestation, which could be addressed through sale of offsets.

The negative impact of the world’s unwillingness to provide finance for audited results of reducing deforestation on communities, exacerbated by Fern and others, can be viewed through the Oddar Meanchey project that was falsely maligned in the Fern report.  The ongoing and long term success of reducing deforestation and degradation depends on a number of key factors for the Oddar Meanchey project: 1) communities’ secured land tenure and on-going interest in protecting their forests as part of their community forestry plans, 2) financial resources to implement the activities needed on-the-ground to address drivers of deforestation and degradation, build livelihoods and provide technical support for communities (where needed), and 3) government/local enforcement support for communities protecting their forests.  Without these three components, it is difficult for the communities to protect their forests from the pressure of deforestation.

For the Oddar Meanchey project, the 13 communities groups led by the Monks Forest, continue to have legal tenure over their forests and work to protect it. However, trees do not protect themselves, and resources are needed to fund the activities the communities need to undertake to address the drivers of deforestation.  For the Oddar Meanchey communities, this has been difficult because carbon revenue was to be the main source of funding for ongoing implementation of on-the-ground activities, which would have provided the necessary income to protect forests and build community’s incomes.  But carbon sales have been very limited over the last four years due to lack of global demand that Fern and others continue to negatively impact. And with very few funds available to the project from the Cambodian Government’s limited budgets and the lack of interest from international donors to support the project, it is left underfunded and unable to finance the communities’ implementation of activities. This is not a failure of the project, communities, project proponents, carbon developer, or market standard. It is a failure of the market for carbon and the shift that international donors have made away from supporting on-the-ground REDD+ activities to paying millions of dollars to governments for national level REDD+ readiness and results-based payment programs which will not likely trickle down to Oddar Meanchey in the near future.

As it relates to the government/local enforcement support, while resources are limited and some areas of enforcement may still be difficult, the project has made some progress recently. The project is near the border with Thailand which has had some unrest, and one driver of deforestation is encroachment of Cambodia Military camps being setup in the communities’ project area. Over the last couple years with the support of the Forestry Administration, communities, military and local police, the number of camps within the project areas has been greatly reduced. 

For the Oddar Meanchey REDD+ Project, the development of carbon offsets provided a structure and method for independent accounting for social and environment benefits and produced an environment asset/service that could be monetized to provide long-term funding for communities’ sustainability in managing their forests.  It is the world’s first Climate, Community and Biodiversity triple gold verified project for its added community, biodiversity and adaptation benefits. The problem was not with creating the offsets, it was with the fact that globally there was limited value placed on the credit credits that were generated by the communities for reducing deforestation.  Had the communities of Oddar Meanchey been able to sell the first set of one million verified emission reductions, they would have had the funding required to support their on-the ground activities for up to seven years, empowering them with the required resources needed to reduce deforestation and improve their livelihoods.  Without finance, there is no question that deforestation risks have increased since the end of the last monitoring period. Since the project has received virtually no funds to implement activities from sale of its environmental assets, from the government or donors, they lack the resources to address the deforestation drivers impacting their forest areas. 

Shame on you Fern and others who criticize and impede a system (while not 100% perfect) that places value on independently audited results of communities reducing deforestation and degradation.  You state your mission is “to achieve greater environmental and social justice, focusing on forests and forest peoples’ rights”.  Your position on forest credits does exactly the opposite as you work to rip away the most important stream of finance from the airline industry that communities desperately need to protect their forest and make a decent living.