ii Contents !"#$%&(#)*%++,-. /0#)*&1-.)12)3!445) 6 !7&#-)8$97*#.)) : ;0,&)*)8$97*#.),7<)=01)<1#*)&)=1->)21-?) @ 3!445A)8$97*#.B*)72C%#7$#)7)>#.)$1%7&-#*)) D Democratic Republic of the Congo (DRC) 6 Guyana 6 Papua New Guinea (PNG) 7 Indonesia 7 E721F-,G0$A)8$97*#.)H)3!445) McKinsey’s bad inﬂuence on national plans to reduce forest emissions from deforestation and degradation I /0#)8$97*#.)8JK)$%-(#A),7)1G&$,C)CC%*17?)) LL E721F-,G0$A)8$97*#.B*)) +,-F7,C),M,&#+#7&)$1*&)$%-(#)) L6 ;0,&B*)=-17F)=&0)8$97*#.B*)+#&01<?) LN LO)P1-#*&)$,-M17A)7,-&$%C,&#)1-)7#G&?) LN a. Carbon stocks and ﬂows in plantations 15 b. Unrealistic precision 15 6O)4,&,)<#2$#7$#*A)7,<#Q%,&#)1-),M*#7&?) LD Plantations: root and branch confusion 16 :O)R,*#C7#)$,C$%C,&17*A)+,7G%C,&7F),**%+G&17*) LS @O)P,(1%-7F)7<%*&-,C)7&#-#*&*A)*>#=#<)G#-*G#$&(#*) LI Can McKinsey add up? 19 NO)817&1-7F),7<)$,G,$&.A)%7=,--,7&#<)1G&+*+) LT /0#)+G,$&)12)8$97*#.B*),<($#) 6U LO)P,C7F)&1),<<-#**)&0#)-#,C)<-(#-*)12)<#21-#*&,&17)) 6U 6O)V,.7F)&0#)G1CC%&#-) 6U :O)E+G,$&7F)17)7,&%-,C)21-#*&*)) 6L P1-#*&*A)+1-#)&0,7)W%*&)$,-M17) 66 LO)/0-#,MF)7,&%-,C)0,M&,&*),7<)=C<C2#)) 6:) 6O)X1$,C)+G,$&*) 6N 8$97*#.),<($#A)%72&)21-)G%-G1*#)) 6D 3#$1++#7<,&17*)21-)8$97*#.Y)-,721-#*&) 7,&17*Y),7<)<171-)$1%7&-#*),7<)7*&&%&17*) 6I !7<71&#*) :U
vExecutivesummary Rainforest degradation is a major contributor to climate change, being responsible for up to one ﬁfth of global emissions. If climate change is to be tackled, the urgent prevention of deforestation is essential.Reducing Emissions from Deforestation and Degradation or REDD McKinsey’s advice does not, in any example studied byschemes are intended to provide tropical forest nations with Greenpeace, lead to a cessation of deforestation or forestﬁnancial incentives not to destroy or degrade their forests. The degradation. Often it defends destruction by industrial interestsconcept of REDD has subsequently been expanded to also include on the erroneous grounds that it contributes to economic growth.ﬁnancial support for restoration, reforestation and afforestation, In DRC, for example, McKinsey legitimises a signiﬁcant increasemaking for an expanded mechanism widely known as REDD+. in industrial logging, with an increase of at least an additional 10 million hectares given as logging concessions.Despite the world’s general failure to agree a deal on climatechange at the 15th Conference of Parties to the United Nations While McKinsey’s cost curve has been extremely inﬂuential inFramework Convention on Climate Change at Copenhagen in government policy decisions, it has a number of fundamental2009, donor countries nevertheless did pledge about $3.5 billion ﬂaws. These include data deﬁciencies and dubious baselineto kickstart REDD+. One year later more progress was made calculations, as well as basic mathematical errors and distortionswith an agreement to establish REDD+ at COP16 in Cancun (‘the within McKinsey’s carbon accounting method. Furthermore,Cancun Agreement’). Meanwhile, around the world, rainforest McKinsey’s intellectual property rights on some of the datanations have been endeavoring to become ready for REDD+ by underpinning its cost curve prevent proper scrutiny of its rationale.engaging in national planning around how the scheme would bedomestically implemented. McKinsey’s approach provides an incentive to over-estimate projected future levels of deforestation, allowing forest nationsMcKinsey & Company is a giant, well-connected global consultancy to claim REDD+ funding for preventing destruction which wasﬁrm which has been working to position itself as the market leader unlikely ever to have happened.in REDD+ advice. According to McKinsey: McKinsey co-authored studies barely acknowledge governance‘Our clients … look to us for honest, objective, thoughtful, and issues within rainforest nations, such as the sheer scale ofexperienced advice.’1 monitoring, reporting and veriﬁcation, capacity-building and governance challenges . This casts further doubt on the value ofThe McKinsey ‘Climate Desk’ has been very successful in becoming McKinsey advice.known as a leading provider of these services. It has attractedcommissions to advise many forest nations on how to draw up national McKinsey-inspired plans not only consistently fail to addressplans for applying for REDD+ funding. It appears most probable that the major drivers of deforestation, such as mining andthe rainforest nations featured in this report are generally following logging, they actually reward the industries and interestsand implementing the advice provided by McKinsey. that cause it. For example, in the DRC study, the palm oil industry stands to gain as much as 1bn for the ‘relocation’ of concessionsHowever, when rainforest countries employ McKinsey to apply its that have not even been awarded.trademarked cost curve to their REDD+ prospects, few if any of theresulting plans meet basic standards of accuracy, rigour, utility or ethical McKinsey promotes a methodology that effectively encouragesacceptability. If implemented in their current form, these plans could its client governments to pursue an industry-orientatedactually result in an increase of deforestation and carbon emissions. development path at whatever cost to wildlife. In Indonesia for example, the forecast of continuing expansion of pulp and oil palmThis Greenpeace report presents case studies on McKinsey’s inﬂuence plantations is a major threat to biodiversity. McKinsey accepts thaton REDD+ plans for four forest nations – Papua New Guinea (PNG), the deforestation will shift to other, still largely forested, islands such asDemocratic Republic of Congo (DRC), Indonesia and Guyana. Our key parts of Kalimantan and especially Papua. Kalimantan is home to theﬁndings include that: endangered Bornean orangutan.
vi If followed, McKinsey’s advice will lead to an expansion of monoculture plantations into farmland and ecologically important non-forest lands. McKinsey misleadingly classiﬁes these lands as ‘marginal’ to justify their conversion to plantations. This could have devastating impacts on local ecosystems and wildlife. McKinsey – and its cost curve – systematically play down the environmental impact of industrial logging and deforestation for plantations. At the same time, it routinely exaggerates the destructive impact of smallholders and farmers. This leads to plans that advocate large-scale acquisition of local people’s lands or settling of subsistence farmers without sufﬁcient attention to their land rights, prior informed consent and compensation. McKinsey’s advice has produced plans which have been criticised by funding institutions and are unﬁt for purpose. When rainforest countries employ McKinsey to apply its cost curve to their REDD+ prospects they are at risk of wasting money on advice that may be in violation of safeguards in the Cancun agreement on REDD+ and other decisions of the UNFCC, UN CBD and other international and regional institutions. As a matter of urgency: McKinsey must publish all the data, assumptions and analysis underlying its cost curve, and not hide behind intellectual property rights to avoid proper scrutiny. It should revise its methodology to include: associated with abatement options, Cancun agreement: protecting forest ecosystems from conversion and degradation, and recognising and implementing indigenous peoples and local communities’ rights. Rainforest nations should not commission further work from McKinsey until the above conditions have been met. Those which have worked with McKinsey should revise the resulting plans to address concerns outlined in this report, and make public all advice received so far from the company. Donor countries and institutions should not provide further funding for McKinsey until the above conditions have been met. They should only agree to fund the provision of REDD+ advice where all parties agree to a fully open and transparent tendering process and there is full public disclosure of advice and full participation of local communities They should focus their attention and incentives on REDD through natural forest protection, rather than any ‘+’ activities. REDD proper provides the greatest mitigation and adaptation beneﬁts. Policies should prioritise ending deforestation where it currently occurs and preventing it from increasing in areas at risk .
2 The story of REDD+ Tropical forests are home to a staggering array of plant, animal and Two years of intense negotiations between 2007 and 2009 saw human communities. While covering only about 10% of the total rainforest nations and potential donors ﬁght to see their particular terrestrial surface, they are home to considerably more than 60% of preferred blueprint for REDD adopted. As a result, there was a all terrestrial and freshwater biodiversity.2 1.6 billion people depend signiﬁcant expansion of the ground to be covered by REDD, as it upon forests for their survival.3 They also play a vital role in stabilising moved from being a mechanism for forest protection to a tool for global weather patterns and their degradation is a major contributor also promoting restoration, reforestation and afforestation, under to climate change, being responsible for up to one ﬁfth of global the new acronym of REDD+. emissions.4 If climate change is to be tackled, therefore, the urgent prevention of further deforestation is essential. In parallel, the World Bank continued to play a central role in the development of REDD policy making and implementation For this reason, and in the absence of an effective global treaty to through the Forest Carbon Partnership Facility (FCPF) and Forest ﬁght deforestation, many people began to see it as imperative that Investment Programme (FIP). The FCPF aims to prepare forest reduction of emissions from deforestation and degradation of forests countries for participation in international carbon markets by was included within the aims of the United Nations Framework supporting REDD readiness activities. It became operational in June Convention on Climate Change (UNFCCC). In essence, REDD 2008. Thirteen countries (Argentina, Costa Rica, the Democratic (Reducing Emissions from Deforestation and Degradation schemes) Republic of Congo, Ghana, Guyana, Indonesia, Kenya, Lao PDR, contemplates that funding be made available for the developing Mexico, Nepal, Panama, the Republic of Congo and Tanzania) have world to reduce emissions from deforestation and degradation so far submitted Readiness Preparation Proposals (R-PPs) for the of forests. Later REDD+ emerged as a variant, with the plus sign FCPF, setting out potential REDD+ policies and activities, which signifying the potential for funding ﬂows for active enhancement of have been reviewed by ad hoc Technical Advisory Panels and carbon stocks through programmes of reforestation or afforestation. the Participants Committee. The World Bank is conducting due The publication of a joint proposal by Papua New Guinea and Costa diligence on these proposals with a view to entering into readiness Rica at COP11 of the UNFCCC in 2005 proved to be the turning grant agreements of up to $3.6 million to assist these countries in point for international interest in establishing a REDD scheme and a conducting the preparatory work they have proposed.7 The Forest two year review into the practicalities was initiated. REDD was then Investment Program (FIP) is a targeted programme of the Strategic formally incorporated within the climate Road Map agreed at COP13 Climate Fund (SCF), which is one of two funds within the framework of the UNFCCC in Bali in 2007.6 of the Climate Investment Funds (CIF). The FIP supports developing countries’ efforts to reduce deforestation and forest degradation Complex political and methodological challenges meant that the (REDD). The following have been selected to be pilot countries for issue had still not been resolved as countries began to negotiate the FIP: Brazil, Burkina Faso, Democratic Republic of Congo, Ghana, the shape of a new global climate deal in the run up to the ill-fated Indonesia, Laos, Mexico and Peru.8 Copenhagen Conference of 2009. As negotiations moved forward, pledges of funding from donor Nonetheless, momentum for REDD was growing: reducing emissions countries grew in size, with $3.5 billion9 agreed at the UNFCCC COP15 from deforestation and degradation of forests was commonly at Copenhagen in 2009. In many cases it was unclear how much of this described as the low hanging fruit of the UNFCCC negotiations. REDD money was additional and whether it would be disbursed bilaterally or would aim to provide tropical forest nations with a ﬁnancial incentive through multilateral institutions and processes. While less than the $25 not to destroy or degrade their forests. Rainforest countries saw billion which some estimated was required up to 201510 (or a minimum REDD as a means of accessing some global ﬁnancial value for their commitment of $10 billion over the next three years that some NGOs standing forests, whilst rich countries saw it as a relatively cheap were calling for11), this was still a considerable amount of money, and politically acceptable measure to address climate change. As the particularly for rainforest countries struggling with poverty alleviation ﬁnancial crisis hit and then deepened in 2008/9, it became a mantra and development needs. It was certainly enough money to attract the that REDD offered supposed win/wins all round. attention of at least one international consultancy ﬁrm.
5McKinsey has attained the position of market the world that will result in further business goingleader in REDD+ advice and forcefully advocates in the direction of The Firm.its approach in the countries where it works.According to journalist Clayton Hirst, McKinsey is: In the Democratic Republic of Congo (DRC) McKinsey itself proposed as part of its output‘…the ultimate old boys’ network. Its tentacles reach the inclusion of a list of key REDD+ measuresinto the boardrooms of Britain’s biggest companies to be adopted.25 This element did not feature inand snake through Westminster’s corridors of the terms of reference for the contract, but thepower…. The McKinsey mob just keeps growing. The resultant 14 programmes now form a key part of theﬁrm, of course, doesn’t use such crude terminology country’s Readiness Preparation Plan for REDD+.26for its former partners; the “alumni network” is its In Indonesia, McKinsey advocated afforestationpreferred phrase. One source close to McKinsey right from its ﬁrst presentation,27 and saw thesays: “The alumni are seen as ambassadors to the policy adopted by the National Council for ClimateMcKinsey brand. The network isn’t openly exploited, Change.28 In the conﬁdential proposal, ‘Institutionalbut the ﬁrm maintains a database of members and capability building for low carbon growth’, preparedholds an annual reception for the alumni.’22 by McKinsey for the Indonesian government there is ‘a heavy emphasis on coaching of local governmentAs one might expect, there is evidence of these ofﬁcials, DNPI [Indonesian National Climate Changebusiness practices being applied in McKinsey’s Council] secondees and institutional partners’.29work on REDD+. One individual involved in anofﬁcial capacity with a rainforest nation’s REDD+ According to one observer, McKinsey remained ‘highlyprocess has told Greenpeace on condition of inﬂuential’ within Papua New Guinea’s (PNG) Ofﬁceanonymity that McKinsey uses contacts in of Climate Change and Development (OCCD) asone country as sales reps to help it get work in recently as November 2010, with questions raisedanother, while boasting to potential developing at Technical Working Group meetings being ‘mostlycountry clients of its capacity to connect them answered … by McKinsey representatives’.30 There iswith donors and taking full credit for funding even evidence that McKinsey may be responsible fordeals concluded (Guyana) or international mentoring staff in the recently established OCCD.31inﬂuence attained (PNG) by its existing clients.23 The same observer notes that Sebastian Schienle, aOnce its foot is in the door, the company works McKinsey representative stationed permanently into maximise its inﬂuence. PNG, was even part of the PNG delegation in Cancun.McKinsey states: ‘We take an overall, Yet at the same time, McKinsey plays downindependent, and fact-based view of a client’s responsibility for most of the documents on whichperformance. We rely on facts because they it works. Despite extensive evidence for its havingprovide clarity and align people. Facts are the played a major part in the studies considered inglobal management language. We work with this brieﬁng, it is invariably credited merely withfacts to provide credible recommendations.’24 providing data, analysis or technical support. ThatThe claim to strict objectivity is not reﬂected this is McKinsey’s decision is suggested by thein McKinsey’s advice on REDD+ which is heavily comment in its DRC project proposal that it will notreliant on a set of distinctly subjective policy publish a report under its own name, so as to ensurepreferences. Put simply, with McKinsey national ownership of the results.32 The exceptionadvice you don’t get dispassionate analysis of is the ‘Pathways to a low carbon economy’ reporttransparent data so much as the advocacy of a for Brazil, notably less controversial than the otherparticular – and literally patented – policy view of studies discussed here.33
6 REDD+: McKinsey’s inﬂuence in key countries 34 Democratic One of the major problems with logging rates. The business as in December 2008. McKinsey Republic of the the DRC study is that it clearly attempts to both obscure the role usual scenario for industrial logging forecasts an increase was credited with ‘independent fact based assessment’ for this Congo (DRC) of industrial logging in destroying in logging yield from 3-5m3/ document, but circumstantial rainforests and to ensure a future hectares to 15m3/hectares evidence suggests it was largely McKinsey was commissioned for the logging industry at the by 2030,42 then suggests that McKinsey’s work.48 McKinsey to produce a study of DRC’s expense of small-scale farming. restricting the increase in received £313,000 from the UK REDD+ potential in late 2009. Far from reducing and eventually yield to 10m3/hectares is an Department for International It produced its report after just eliminating deforestation, it emissions reduction; 43 Development for REDD+ work ﬁve weeks, and although it is proposes a signiﬁcant increase in done on behalf of the Guyanese credited only with technical concessions. A billion euros in subsidies44 Government supposedly between collaboration on the study, there to the intensive farming June 2008 and March 2009.49 are grounds to believe that the The McKinsey co-authored industry (mostly palm oil for published document is mainly DRC study underplays the role export) to divert plantation In addition to the FCPF, a number McKinsey’s work.35 Early in 2010, of logging in deforestation, and establishment outside of of donors have been, or are to be, the DRC released its Readiness simultaneously overestimates existing dense rainforest;45 approached for assistance with Preparation Proposal for REDD, the likely expansion of the logging Guyana’s REDD+ preparation which provisionally adopted all of sector in the future, allowing and implementation, but apart McKinsey’s proposals. companies to misleadingly claim farmers without from small contributions from that they have reduced their consideration for community Conservation International and The DRC is one of the nine efforts when compared to what lifestyle and traditions the German Development Bank, initial UN-REDD Programme would have happened without and without reference to the only funding agreed has pilot countries, and has been REDD+ intervention.39 The overall indigenous peoples.46 been from Norway, which has given direct funding to help effect is to support business as committed support of up to $250 launch its REDD+ process. In usual for logging companies – On 29th January 2011, the million by 2015. The funding addition to REDD+ readiness whilst efforts to reduce emissions DRC’s Environment, Nature is supposed to be conditional funding received from the are directed at subsistence Conservation and Tourism on ‘Guyana’s success in limiting World Bank’s Forest Carbon farmers because their activity Minister, José Endundo, greenhouse gas emissions Partnership Facility (FCPF) does not contribute to GDP announced that he would from deforestation and forest and the UN, in 2010 support growth – regardless of its social legalise logging titles in 15 degradation’50 but the basis for of up to $20 million for pilot and cultural value. million hectares of rainforest deﬁning this process has projects was being considered and proposed that the been controversial.51 by the Congo Basin Forest Fund, !"#$%&"$() government lift the country’s funded by Norway and the UK.36 *+"!,-()$". moratorium on new logging Guyana’s approach involves the No information is available on concessions,47 which would country being paid to retain its funding promised for the actual ,/0#%*+/&"1234 open up an additional 10 standing forests on the basis implementation of the strategy. $*%1.(),5%1"6 million hectares of forest to of their ‘economic value to the exploitation. McKinsey’s nation’ were they cleared almost McKinsey received $300,000 A signiﬁcant increase in advice has legitimised entirely for timber, agriculture and for its work, paid for by a industrial logging, with government policy. development at a hypothetical rate, Multi-Donor Trust Fund (now an increase of at least an which is actually far above that ever closed) overseen by the World additional 10 million hectares Guyana seen in the country. This rate (4.3% Bank and funded by the UK, given as logging concessions;40 deforestation per year) would be France, Belgium, Germany, Guyana is a UN-REDD partner around 20 times the government’s Luxembourg and the EU.37 An argument that effectively country but receives no estimated current deforestation McKinsey appears to have been states that companies should funding for its national REDD+ rate of 0.1-0.3%.52 The approach appointed by direct agreement be paid (at a rate of $2 to programme. It published its is explained as appropriate to rather than through an open 2.5 per tonne of CO2e)41 for approach to pursuing external Guyana’s status as a high forest tendering process.38 doubling or trebling existing funding to avoid deforestation cover, low deforestation country.53
7!"#$%&"$()7%.#)#8$ the actual implementation of of deforestation and ‘facilitate The effect is to make it seem 3095#)(),5%1"6 PNG’s REDD+ programme. progress towards performance- times cheaper to displace a small A ﬁnancial plan for interim based payments for emissions farmer than to challenge the Almost no measures to funding requirements is being reduction’.70 Other funding for incursion of new plantations into address the existing drivers developed.62 that period included $64.4 million natural forests. of deforestation in Guyana. In from Australia and $30 million fact logging would be allowed We have no information on from Germany for ‘Measures on Meanwhile, the logging industry to increase by 20 times its who has paid for McKinsey’s Reporting and Veriﬁcation’, work is declared off-limits. Discussing current rate;54 work in PNG. towards a reference emission what it calls ‘sustainable level and other preparation forest management’, the cost Use of REDD+ funding :+"1/,%;")*$/) work.71 According to a 2009 curve report claims that: ‘The to facilitate ‘higher value <+(,+!,-()$". source, the UK, Japan and Norway alternative – stopping logging agricultural development’, have also promised funding for altogether – would have including biofuel production in </&="1#1>/,#*" capacity building of Measurement the same effect on emission ‘unique and fragile’ Savannah 9/5(,("$(),5%1()?6 Reporting and Veriﬁcation reductions [as sustainable ecosystems and wildlife rich (MRV)72, REDD+ markets and forest management], but has wetlands;55 Continuation of large-scale fund distribution.73 a much higher opportunity commercial logging under a cost and would not allow Use of REDD+ funding to so-called reduced impact The Norwegian money was Indonesia to further develop construct the Amaila Falls regime,63 yet a moratorium on paid direct to McKinsey and was its forest products industry.’81 Hydro-Electricity Project. new logging concessions not subject to a competitive McKinsey does not explain A recent study suggests is explicitly rejected;64 tendering process as McKinsey the assumptions behind this considerable impact on was already active in Indonesia statement, but its implication – forests from clearance No measures to address in September 2009 when the that logging must continue and through to building the plant mining, despite its role as a funding was agreed.74 that this will not compromise and its access road: 750,000 major driver of deforestation; emission reductions – is central tonnes(t) of biomass are to be Greenpeace has also seen to the proposals in the plan. cleared from the dam site56 Major agricultural two McKinsey reports for and the access route will intensiﬁcation affecting the Indonesian government: !"#$%&"$9&/9/$"1() include 110km of a minimum subsistence farmers;65 Detailed project overview (Phase @)1/)"$(#(),5%1"6 8m wide road cut through 3): Implementation support primary forest.57 750,000t Afforestation and plantation for Central Kalimantan, from An additional 10 million biomass is equivalent to 1.3Mt on pasture and other non- February 2010 and Detailed hectares of afforestation and CO2 emissions.58 forest land, likely to impact on project overview (Phase 3): reforestation via plantations areas with very high value to Institutional capacity building for with a lack of clarity as toPapua New wildlife.66 low carbon growth. McKinsey whether industrial plantationsGuinea (PNG) Indonesia charges approximately $3.6 million75 and $6.1 million76 are to replace natural forests;82In 2010 Papua New Guinea respectively for capacity building. The payment of large sumspublished three documents Indonesia is one of the initial of money, effectivelyrelating to its national climate UN-REDD Programme The cost curve for Indonesia compensation,83 to divertchange REDD+. Though McKinsey pilot countries and receives contains ﬂawed assumptions, establishment of pulp and palmis credited only with data direct support for its national which signiﬁcantly bias the oil plantations from forestedand analysis for the ﬁrst two programme.67 Indonesia has ﬁnal outcome to protect the land when improvements todocuments, and not at all for the also been selected as a World interests of industrial forestry productivity could mean onlythird, there is strong evidence Bank Forest Investment and agri-business. The cost of a marginal increase of newfor McKinsey being largely Programme (FIP) pilot country. reducing emission from limiting land area would be needed toresponsible for all three.59 At the Copenhagen conference plantation expansion into natural meet government targets for in December 2009, President forests is set as high as possible, production expansion;84PNG is one of the nine UN-REDD Yudhoyono pledged Indonesia to by assuming that there are noProgramme pilot countries reduce overall emissions by 26% alternative locations possibleand receives direct support by 2020 using domestic funding – nearly $30/tonne CO2e or increased greenhouse gasfor its national programme, only, while aiming to increase $20,000/ha.77,78 In contrast, emissions by proposing thatwhich ‘aims at initiating the that ﬁgure to 41% with help of the forecast costs of reducing the deﬁnition of ‘forest’ willquick start phase of readiness international funding.68 emissions from smallholder be more than 30% canopysupport for REDD+’.60 In agriculture are minimised to cover. According to theaddition to funding of $6.4 As of May 2010 (the most recent include only the monetised joint Indonesia Nationalmillion from UN agencies, PNG ﬁgures available), Indonesia had value for production79 – a ﬁgure Development Planninghas received or been promised received or been pledged FCPF of $1/tonne CO2e80– which Agency–UN-REDD draftfunding from Australia (up to $3 and UN-REDD funding totalling clearly recognises neither the National REDD+ Strategy85,million), Japan (¥700 million) $9.2 million (the UN-REDD transaction costs nor, more 10% canopy cover (the FAOand the EU (unspeciﬁed).61 contribution of $5.6 million being importantly, the wider social, threshold for deﬁnition ofNo information is available on funded by Norway69), and $80 environmental and cultural forests) would be classiﬁed asany donor commitments for million from FIP to address drivers impacts of such an intervention. ‘high carbon’.
11The McKinseyMAC curve: anoptical illusionMcKinsey has risen to prominence within the assumptions relied upon in its calculations.86 Due toclimate change and REDD+ spheres through its the company’s stringent application of intellectualglobal greenhouse gas abatement cost curve, property rights on its data, the outside world haswhich the company conceived in 2007 and no way of knowing how McKinsey arrives at theupdated in 2009. The so-called ‘McKinsey curve’ different cost estimates attributed to varioushas been extremely inﬂuential in setting the terms abatement measures.87 The potential victims ofof the debate for international carbon reduction a REDD+ policy which displaces local farming willregimes and other marginal abatement cost (MAC) thus never have access to the reasoning behindcurves inspired by the McKinsey model have since why this policy was deemed cheap in the ﬁrst place,become hugely inﬂuential in carbon abatement let alone considered acceptable.policy. They are a simple way of ordering andpresenting different options for reducing emissions The use of projected emissions raises another set ofand typically look like a succession of rising steps, thorny issues. McKinsey cost curves typically workeach one a different potential measure, its height on assumptions about what a country’s emissionsrepresenting its cost, and its width representing will be in 2020 or 2030, so it is necessary tothe amount of carbon abatement it could deliver. calculate, based on current trends, what emissions are likely to be at that date before the abatementThe cost curve approach to carbon reduction potential and the associated compensation forhas many immediate attractions, not least that it REDD+ action can be calculated. This introducesallows policymakers to focus on the least expensive a clear incentive to inﬂate projections in order tomeasures ﬁrst and to get an idea of the total cost be paid more for not actually producing emissions.of a given level of emission reduction. But as with The dangers of this approach are clearly illustratedmany simple presentations of a complex reality, in the case studies in this report, in particular theMAC curves can disguise signiﬁcant dangers; in projections for logging yield in the DRC and PNG,particular, where there are ﬂaws in underlying which result directly from McKinsey advice.assumptions about comparative costs. Cost curves for REDD+ are not able, and doThis is especially true when it comes to costing not seek, to integrate the web of social andthe measures in REDD+. For example, if the true environmental values associated with tropicalcosts of displacing local subsistence farming are forests beyond their carbon sequestration andunderestimated – as this report argues they are storage potential. MAC curves treat tropical– by ignoring transaction costs and wider social forests like a carbon abatement technology, ratherand environmental impacts, whilst the costs of than recognising them as some of the world’s mostaddressing industrial logging are overestimated (for complex living systems, supporting a staggeringexample by exaggerating the economic value of variety of biodiversity, as well as being of greatlogging to the economy), and these assumptions are economic and cultural importance to humans.built-into the cost curve, then every policy decisionﬂowing from the use of the curve will tend to favour It is this basic lack of understanding – along withlogging interests over those of small-scale farmers. some rather fundamental mistakes in biologicalThe result will not just be socially destructive, but carbon accounting – which too often seducemay prove impossible to implement, economically policymakers away from measures to protect naturalirrational, and ineffective in reducing emissions. forests in favour of plantations and industrial scale logging, for example. Until these ﬂaws areMcKinsey claims to ‘rely on facts because they addressed, the use of the MAC curve in forestprovide clarity and align people’, but it is entirely policy making will remain at best misleading,unwilling to transparently disclose the data and and at worst dangerous.
12 UN B E L I E VA B L E CO V E R T Global consultancy firm, McKinsey advises rainforest McKinsey’s, cost curve has nation governments on reducing been extremely influential in emissions from deforestation. Yet setting the terms of the debate it keeps most of its assumptions for international carbon commercially confidential. Since reduction regimes. these flawed cost curves are at the heart of its advice, HOW CAN C S THE REDD+ PLANS McKINSEY AL C U L AT I O N INSPIRES BE TRUSTED? McKinsey’s FA L S E E CO N O MY MARGINAL The height of each bar shows how much uch ABATEMENT COST CO2e abatement measures cost. Butut these costs are misleading because only t the missed opportunity costs get CURVE included, and McKINSEY EXCLUDES CERTAIN SIGNIFICANT COSTS FOR REDD+ such as transaction, ES R a agri re for an rn bsisten bsiste ers’ gal. implementation, monitoring and legal. Abatement cost ive i ood are ened, bar doesn’ in ba fi ¤ per tCO2e ost, no e st of tt 60 2nd generation biofuels 40 Reduced pastureland Organic conversion soil restoration 20 Reduce slash and Geothermal burn agriculture conversion Grassland management 0 5 10 15 Building efficiency new build -20 Waste recycling Degraded land reforestation -40 Cars full hybrid Insulation retrofit (residential) n I N T E R AC T I O N S -60 Tillage and residue management due McKinsey puts each CO2e abatement VAC Retrofit residential HVAC measure in a bar to show its clients which -80 are the mo cost effective. But the bars most Appliances residential are not fle flexible enough to allow for even th simplest the simple of interactions. In reality, if -100 Residential electronics one one measure on measu is increased or lowered, then another m an h another measure can change in response. Sin e it energ Lighting – switch incandescent eff ie effi ess of an on to LED (residential) red s, bars s M in Since McKinsey’s assumptions are not available for public scrutiny, th cost this curve has been redrawn for illustrative purposes without using origin data. strative original
INC R E DIBL E SNAPSHOT 13 McKinsey’s secrecy means that McKinsey’s cost curves only t scientific community and the focus on one year, usually policymakers can’t see or 2030. But even where it’s challenge the assumptions c possible to predict costs, the behind how McKinsey arrives curve doesn’t show the trends a different cost estimates or at over a period of time. emission savings. McKINSEY’S e McKINSEY’S CURVE IGNORES WORK IS NOT OPEN TO W DEVELOPMENTS BEFORE PUBLIC SCRUTINY. AND AFTER 2030 THAT MIGHT BE IMPORTANT. LO S T E M I S S I O N S McKinsey cost curves predicts CO2e saving potential for each abatementnt measure in 2030, shown by the width of h each bar. But McKinsey doesn’t showow the emissions that accumulate over ar Gas plant CCS retrofit period of time or their contribution to Coal CCS retrofit global warming, which could be much ch more significant than presented. ba s, Iron and steel CCS new build an afforestatio save CO2e, it ignore Coal CCS new build it save it as it Power plant rainforest or even degraded rest biomass co-firing Cars plug-in hybrid Degraded forest reforestation Solar PV Solar CSP Nuclear20 25 30 35 40 40 Pastureland afforestation Abatement potential ential Low penetration wind High penetration wind GtCO2e per year r Reduced intensive agriculture conversion MISSING BENEFITS The x axis shows the potential CO2e savings via the width of ea measure, each FALSE SENSE OF CERTAINTY ’s no of e but doesn’t factor in any additional st in benefits or costs. Thes missing These ’s st rv does no beyo benefits and costs, beyond carbon McKinsey presents forest-related future re ref rang of r rtaint abatement costs as certainties. But sincece emissions, ought to be iinfluencing margins of error ca be greater than cost can ost REDD+ plans, and also have implications hav betw ot differentials between measures, it’s not a for other policy areas. realistic to predict which will be cheaper. er. fo Costs may vary for REDD+ abatement t measures due to location, land use change, policy and market forces. Ra Rainforest o er ive fo ere; t e intensiv agri t nversion be va e doesn’ t differen do doesn’t o rt nit st e ed differen of in in differen
15What’s wrongwith McKinsey’smethod?AB /&"$*,#&D/)6 C It is not made clear anywhere whether the ()#&*(,%5#*"/&()"9*E existing carbon stock of land targeted for plantations has been taken into account.Measuring carbon accurately, with clear and For example, the DRC study recommendsveriﬁable methodology, is critical to the success afforestation on ‘shrubby savannahs or forest-of REDD+ programmes. However, forest carbon savannah mosaic’89 – but without data onaccounting systems are complex, controversial and the carbon which is already stored in thesestill a matter for debate. This makes it particularly ecosystems, it is impossible to calculate whetherimportant that REDD+ plans show exactly how they putting plantations on them will actually reducehave calculated any emissions savings, so that they emissions – or by how much. Yet the samecan be assessed independently and veriﬁed. report gives emissions from logging as net ﬁgures – that is, assuming regrowth of treesYet McKinsey keeps most of the workings of its cost which will in turn reduce the overall impact oncurve commercially conﬁdential, this means that its emissions. The result of these two approachescalculations of forest carbon savings are hidden and taken together, is likely to exaggerate thetherefore can’t be veriﬁed. Each potential action, emission reduction potential of plantations,such as preventing logging, or planting trees, is and minimise the negative impacts of logginggiven a cost per tonne of carbon saved and assessed – resulting in an inevitable bias in the kinds offor its total abatement potential – but there is solutions proposed in the plan.almost no indication of how these results werereached. Many of the assumptions and calculations The same DRC study shows similar distortions.underpinning the results of the cost curve are Its agroforestry case study shows carbonconcealed as if in the workings of a black box. sequestration by a plantation equivalent to around 150 tonnes of carbon stored per hectare.90 ThisThere is evidence of major problems with the ﬁgure is around the same amount of carboncost curve carbon accounting methodology: sequestered by untouched primary forests in the region 91 despite the fact that the plantations area. Carbon stocks and ﬂows described as being harvested for fuelwood and in plantations construction. This is grossly unrealistic.McKinsey co-authored studies focus almost b. Unrealistic precisionexclusively on carbon ﬂows (emissions andabsorption), usually given at two static points in The McKinsey cost curve generates predictionstime – today’s current emissions and net ﬂows with unrealistic precision. For example, ain 2030.88 They do not describe how this carbon fact sheet on the Indonesia cost curve givesstock – ie carbon stored in forests and soils – might emissions reduction estimates in 2030 to twochange over time. This makes interpreting the decimal places. This level of precision obviouslyﬁgures given for ‘reforestation and afforestation’ gives an exaggerated picture of the reliability of(ie plantations) particularly difﬁcult. the estimates.92The numerous errors and biases suggest that McKinsey lack an understandingof the fundamentals of carbon accounting. The confusion of net and grossemissions, the neglect of effects on carbon stocks and, most importantly,the persistent failure to display a robust and transparent carbon accountingmethodology seriously undermine the documents’ credibility.
16 PLANTATIONS: FB #*#1"G(,("),("$6 2 ROOT AND BRANCH ()#1"H%#*"/&#D$")*E CONFUSION It is not only McKinsey’s secrecy that is troubling: in some instances the so-called data that McKinsey has used to produce Indonesian Government recommendations may simply not exist. documents confuse different plantation types and consider In the DRC study, for example, a table is given commercial plantations as showing conﬁdence in individual emissions factors.99 The table reveals that illegal logging ‘carbon sequestration’ and and fuelwood factors have been reached ‘sink enhancement’. despite there being ‘no exact data available’. It is unclear what assumptions have been made or analysis done in the absence of this data. The conclusions on industrial logging are also highly suspect, due to the lack of governance, control and law enforcement, and the level of corruption in the DRC logging sector. The DRC, PNG and Indonesia studies rely heavily on plantations, usually referred to in In the development scenario set out for the reports based on McKinsey’s advice as Guyana, meanwhile, evidence-based planning ‘afforestation and reforestation’. Although is largely abandoned in favour of speculation. these plans do not explicitly advocate The Low Carbon Development Strategy replacing natural forest with plantations, using suggests extensive agricultural and forestry plantations in the emissions abatement ﬁgures development, including on large areas of land acts to mask ongoing deforestation. which are almost certainly unsuitable for such activity. A Guyanese forest expert, Janette Each of the cost curve reports bases its Bulkan, has commented on the ‘extreme predictions on what it calls ‘conservation’93 infertility of most of [Guyana’s] forest- plantations or ‘afforestation aiming to sequester covered hinterland soils’100 which makes carbon’,94 that is, plantations not intended for them ‘much less likely to be convertible to harvest. Such plantations have no economic use ﬁnancially-proﬁtable, ecologically-sustainable other than to attract REDD+ credits. These plans agriculture than in neighbouring Brazil’. would pay developing countries to hand over large areas of what may be biodiverse and useful With a similar disregard for basic data land to ineffective plantations, while continuing to or evidence to support its assumptions cut down natural forest. and proposals, PNG’s Interim Action Plan proposes that measures to increase yields There is also the possibility that the McKinsey- and market access in subsistence and inspired plans could lead to REDD+ funding smallholder agriculture would save 9-15 supporting pulpwood and oil palm plantations, megatonnes of CO2e per year by 2030,101 which do not sequester signiﬁcant amounts but admits that ‘the abatement effect of of carbon.95 Greenpeace has previously noted these measures is unproven’. that Indonesian government documents confuse different plantation types and consider Elsewhere, data from countries in different commercial plantations as ‘carbon sequestration’ continents is used to attempt to construct and ‘sink enhancement’.96 This possibility is arguments in support of McKinsey’s favoured admitted in the Indonesia and PNG cost curve REDD+ interventions. The PNG report, the reports. For example, it is suggested for PNG that Climate Compatible Development Strategy, if reforestation included forestry plantations, cites evidence from African countries in support this would require ‘further research/analysis of proposals for ‘agricultural extension’, ignoring … to calculate the abatement potential’.97 The the different ecological and cultural conditions possibility of REDD+ funding going to commercial affecting PNG farmers.102 The document plantations is not ruled out. claims that ‘Technical appendices containing this data and analysis are available on request Although not one of the principal case studies from the Department of Environment and considered in this report, McKinsey’s advice Conservation’103 but Greenpeace requests for to the government of Brazil is illustrative these appendices have been unsuccessful. here. McKinsey’s report suggests that both ‘commercial forestry operations’ such as ‘pulp These examples suggest these reports are production’ and ‘reforestation using native not based on hard evidence. They present species...not for commercial use’98 could form possibilities as if they were ﬁrm policy plans, part of REDD+ plantation programmes. backed by inadequate, if not absent, data.
18 KB #>/%&()?()1%$*&(#5()*"&"$*$6 C reduction potential, and add to the time it takes $="<"19"&$9",*(>"$ to implement a REDD+ strategy.’ 118 McKinsey co-authored studies repeatedly use tricks This is particularly important for programmes of data presentation to protect or promote industrial relating to smallholder or subsistence agriculture and logging and large-scale agricultural interests at the fuelwood collection, where implementation costs expense of subsistence farming. The methodology are likely to be very high. The failure to include the of the cost curve contains implicit assumptions on costs and difﬁculties of communication with large the relative value of different activities, particularly numbers of people in remote areas, added to the logging, industrial agriculture and subsistence or failure to account for the value of non-monetised smallholder agriculture. The overall effect is that the land uses, means that the ﬁnancial and social cost of potential emissions savings from targeting small- programmes tends to be underestimated and their scale agriculture are repeatedly overestimated, and potential effectiveness overestimated. their costs underestimated, in comparison to tackling the commercial drivers of deforestation. In contrast, forecast emissions reductions from reduced plantation expansion are costed at the The country reports for Indonesia, the DRC and theoretical opportunity cost based on the value of lost PNG, for example, base their calculations of the cost production. In this instance the maximum opportunity of emissions reduction from avoiding deforestation cost – nearly $30/tonne CO2e or $20,000/ha119 – is and degradation on a theoretical ‘opportunity based on an assumption that plantations will not be cost to the nation’ which excludes ‘transaction, established at all if they are not on forested land,120 communication and information costs,’ 116 that is, despite admitting that much expansion could be the cost of implementing an emissions reduction relocated to non-forest land much more cheaply.121 programme. This tends to misrepresent the costs In effect, the cost of reducing plantation expansion and desirability of different emissions reduction is inﬂated while the cost of reducing smallholder options. In DRC, McKinsey is actually very explicit expansion is minimised until it is virtually meaningless. in equating the abatement cost to ‘the reduction of proﬁt margin incurred by the company’.117 As The partial use of the concept of opportunity cost the World Bank review of the DRC’s R-PP argues, also skews the cost curve’s priorities. While the ‘[Transaction and implementation costs] can REDD levers (smallholder agriculture and plantation signiﬁcantly increase costs, reduce the emissions development) are based on opportunity cost – deﬁned
20 The impact of McKinsey’s advice AB #(5()?*/#11&"$$*+"&"#5 C uses. The PNG’s ‘Climate Compatible Development ‘[We] bring 1&(>"&$/G1"G/&"$*#*(/) Strategy’ describes this approach: innovations in In addition to distracting attention from the commercial and industrial drivers of deforestation, ‘For every driver of deforestation and degradation there are multiple abatement options, including management McKinsey’s co-authored country reports often full abatement by stopping an activity, or partial practice to clients… Our simply do not include measures to reduce or halt abatement by reducing the carbon intensity of destructive activities. the activity. In this report, our approach has been In Guyana, for example, there are no new to analyse abatement measures that are broadly compatible with the continued development of clients need new proposals to address the major driver of the sector in question.’140 insight.’ 131 deforestation in that country: mining. This section of the country’s Low Carbon Development Indonesia’s cost curve report is oddly quiet over McKinsey Strategy website features the following Q&A: development on non-forested peatlands. The report lists ﬁre prevention, water management Q: Will the Strategy require and peatland rehabilitation as the preferred levers mining and forestry to stop? for peat emissions abatement.140 This suggests that expansion of plantations on peatland, with A: Mining and forestry activities will not accompanying emissions resulting from drainage, be required to stop. However, they will disturbance and compression of peat, would be be required to strictly comply with permitted to continue. standards set by our Mining, Forestry and Environmental Laws and the Low When combined with carbon accounting Carbon Development Strategy.132 methodologies and projected baselines which systematically favour action to displace small- In other words, Guyana’s plan would only scale farmers over action to address the impacts address deforestation drivers by enforcement of industrial logging or plantations, it is no wonder of existing regulation. that McKinsey-inﬂuenced REDD+ are a source of comfort and reassurance to many forest- While mining is also acknowledged as a destroying industries. signiﬁcant driver of deforestation in the PNG133 and DRC studies,134 stopping or reducing mining FBM#.()?*+"9/55%*"& is not included in their mitigation proposals. It is judged too expensive in the DRC135 and in PNG McKinsey co-authored reports not only consistently it is simply omitted from the cost curve.137 In the fail to address the major drivers of deforestation PNG Interim Action Plan mining is acknowledged as a signiﬁcant source of emissions ‘includ[ing] they actually reward the industries and interests which cause it. For example: McKinsey forest dieback from Ok Tedi spill’138– a reference co-authored reports not only to a copper mine whose toxic waste has In the DRC: If logging intensity did not increase contaminated some 1,300km2 of south-west above 5m3/hectares (the upper bound of PNG.139 However, the cost curve methodology does not include non-monetised externalised current estimates) between now and 2030, McKinsey’s plans would net around ¤750 million consistently fail costs such as environmental damage or non- in ‘compensation’ over that period.141 The palm to address the monetised, non-carbon beneﬁts of forests. This acts in favour of the mining industry by oil industry stands to gain as much as ¤1 billion for the ‘relocation’ of concessions that have not major drivers overestimating its value, thus allowing it to even been awarded yet.142 of deforestation continue business as usual. In Indonesia: The forecast cost of oil palm they actually The DRC and PNG studies do make some effort to and pulp plantation displacement per year by reward the address other drivers of deforestation, but only 2030 is $11 billion143, effectively compensation within a stated policy context of choosing abatement for halting expansion into forest which never industries and levers which have the minimum impact on business as usual in the affected sectors. The PNG views needed to happen. interests which forests primarily in terms of their value for other In Guyana: The Amaila Falls Hydro-Electricity cause it.
25 The contrast between the intolerance of shifting agriculture and the laissez-faire approach to logging is reﬂected in the downplaying or ignoring of industry’s social impacts.FBN/,(#5(;9#,*$McKinsey’s abstract view of REDD+ actions as established through commercial logging’184 –simply a source of carbon market revenue without despite the ﬁndings of ofﬁcial review teams thatreal world impacts is all too evident in the treatment logging royalties (often not paid in full) and jobsof the wider social value of forests. created (generally poorly paid) contribute little to local welfare, and that companies fail to fulﬁlPerhaps the most glaring example is the attitude to agreements to provide infrastructure.185traditional agriculture based on shifting cultivation.Notwithstanding academic evidence that its Beyond the forest, the ubiquitous proposals forcontribution to degradation or deforestation may so-called afforestation, plantation establishmentbe trivial or non-existent,179 subsistence-level or commercial agriculture in grassland orshifting cultivation is held up with unrestrained savannah threaten social as much as ecologicalzeal as one of the key drivers of deforestation. The damage since they ignore the existence of peopleassumption – made explicit in the DRC study – is who depend on these lands. In PNG, for example,that commercial agriculture is a desirable norm the only indication of any compensation for thoseto which forest dwellers would obviously want who lose pasture to oil palm is a passing referenceto ‘evolve’, if only circumstances would permit.180 to an unexplained ‘community beneﬁt payment’There is no mention of people’s right to free, prior on which ‘further discussion is needed,’ whileand informed consent or how forest people who those who lose land to sequestration plantationsdo not wish to comply with these plans will be dealt are not even promised this.186with. At its worst this could represent the massdisplacement of people and human rights abuses. McKinsey’s indifference to consultation is emblematic of its wider disengagement fromThe proposals in PNG, meanwhile, give with one the effects of the measures it proposes. Yethand and take away with the other, holding out what might be seen as naïveté becomes culpablethe prospect of intensiﬁcation bringing increased when it assists injustice and oppression. The DRCrural incomes and food security181 while concluding government’s breach of its promise to distributethat increased yields would enable some land logging revenues to the local level has already beencurrently used for subsistence to be ‘freed up for noted187 in the section on McKinsey’s monitoringreforestation through natural regrowth’182 – in and capacity on p19. In PNG, failure to curbother words diminishing the land area at indigenous logging, and proposals for large-scale plantationfarmers’ disposal, rather than empowering them and ‘afforestation’, threaten to combine with newto grow a proﬁtable surplus without increasing legislation depriving communities of the right totheir land take. The assumption that increased appeal or receive compensation when land is takenproductivitiy frees up land, known as the Borlaug for projects ‘in the national interest’, to unleashhypothesis, has itself been questioned by some.183 a wave of dispossession.188 In Guyana the stated rights of Amerindian communities to proﬁt fromThe contrast between the intolerance of shifting the LCDS189 are undermined by the government’sagriculture and the laissez-faire approach to heel-dragging over as-yet untitled land (whichlogging and other destructive industries is is not eligible for payments)190 and its co-optingreﬂected in the downplaying or ignoring of and manipulation of several of the supposedlyindustry’s social impacts. The PNG ‘Climate- representative indigenous bodies.191 The leader ofcompatible development’ study thus enthuses one resolutely independent Amerindian body thatthat forest communities will ‘continue to beneﬁt has criticised the LCDS process has apparentlyfrom the roads and public services that are received death threats.192
27It is clear that when rainforest countries employ scenario on a projected business as usual The internationalMcKinsey to apply its methodologies to theirREDD+ prospects, they are in danger of wasting approach, against UNFCCC recommendations199 and calls for this approach to be reviewed in institutionsmoney on advice that harms their own interests light of lack of quantitative data and lack of concerned withand threatens the biosphere. A failure to insiston adequate safeguards for biodiversity or the agreement over ‘adjusted scenarios’.200 REDD+ arerights of forest-dwelling peoples, or indeed to It may be assumed that similar scepticism is becomingprovide a realistic assessment of the technicaland economic feasibility of proposals, does beginning to permeate bilateral donors, though they tend not to make public pronouncements increasinglynot merely threaten harmful consequences for on the subject. But with the exception of critical of thethe client country, but actually jeopardises the Norway, no individual donor country is yetwhole future of its REDD+ plan, and arguably recorded as having committed to funding ﬁnal shortcomings ofthe credibility of the REDD+ concept. Suchfailure may also be in violation of the Cancun implementation of any of the national REDD+ plans discussed. Whether they will do so must plans preparedagreement on REDD+ and other decisions of the now be an open question. with McKinsey’sUNFCCC, UN CBD and other international andregional institutions. It is also clear that in some cases rainforest advice. countries themselves are beginning toThe governments of the UK, Norway and acknowledge McKinsey’s shortcomings andothers have funded McKinsey’s work in develop more credible REDD+ plans. This isthe countries considered by this report, most notable in the DRC, whose R-PP (despitesometimes without any kind of competitive the criticisms noted in this report) does displaytendering and with no effective control over a note of realism and caution absent from theperformance.194 A number of donors have also REDD+ Potential study – for example, insistingcommitted funds to other aspects of these on the inclusion of indirect effects such ascountries’ REDD+ preparations. However, migration in any impact analysis of miningthe international institutions concerned with or large-scale agriculture,201 and admittingREDD+ are becoming increasingly critical the government’s breach of its pledge toof the shortcomings of plans prepared with distribute forestry tax revenue locally.202 AMcKinsey’s advice. source close to the country’s REDD+ planning has told Greenpeace anonymously that theIn PNG, ‘Climate-Compatible Development’s’ DRC Environment Ministry commissioned therejection195 of the possibility of stopping REDD+ Potential study from McKinsey (despitelogging entirely, despite the acknowledged UN-REDD and FCPF opposition) to strengthenhuge emission savings that would result, and its its negotiating position for Copenhagen, butsuccessor’s failure to mention even the partial that McKinsey’s intervention compromised therestriction that it proposed as possibly worth national REDD+ process and has now outlivedconsidering,196 exemplify the pro-industry its usefulness:bias that persists through the documents onwhich McKinsey has worked. Unsurprisingly, ‘There is no doubt that the DRC’s increasingthe UN-REDD secretariat has questioned the credibility in REDD terms is based above allsincerity of PNG’s approach and called on the on the long-term ﬁeldwork conducted by thePNG government to enact a moratorium on national team along with all its partners. Oncenew timber and agricultural leases as a sign of the McKinsey comet has passed, it makescommitment.197 Meanwhile, the Independent more sense to count on credible and lessTechnical Review of the UN-REDD National greedy partners to develop and implement theJoint Programme document doubts whether profound transformations that will be critical tothe abatement measures proposed in the REDD success.’203forthcoming third draft of ‘Climate-compatibledevelopment’ (reduced impact logging, The ‘Indonesia climate change sectoralsustainable forest management, reforestation,‘relocating’ plantations to degraded land and roadmap’204 is another non-cost curve-based plan showing a more measured way forward, Some rainforestintensifying agriculture) ‘are in fact additional or albeit one that actually preceded McKinsey’s countries areachievable’.198 This scepticism from UN-REDDis an instance of real reputational damage done approach and related proposals for Indonesia. Produced by the development planning beginning toto the PNG programme by adhering to the pro- ministry and the Ministry of Forestry, it gives acknowledgebusiness approach advocated by McKinsey. more emphasis to forest protection than some other REDD+ planning documents proposed McKinsey’sCriticism has also been levelled at McKinsey- by Indonesia.205 Speciﬁcally, it uses a baseline shortcomingsinspired aspects of the DRC’s plan. The FCPF derived from present-day emissions rather thanTechnical Advisory Panel review has questioned aggressive projections of industry expansion,206 and developthe usefulness of a cost curve that excludestransaction and implementation costs, and and emphasises the need to protect community land rights.207 Which approach dominates in more crediblehas criticised the plan for basing its reference Indonesia is yet to be determined. REDD+ plans.
29!,-()$". 3#()G/&"$* 2/)/&,/%)*&("$#)1;%$*6 )#*(/)$$+/%516 ()$*(*%*(/)$$+/%5161. Immediately publish all the data, 1. Not commission further work from 1. Not commission or fund further work assumptions and analysis underlying the McKinsey until all the conditions above from McKinsey until all the conditions international and national versions of its have been met. outlined above have been met. cost curve and include such disclosures in all future publications. 2. Revise existing REDD+ plans to address 2. Only agree to fund the provision of the methodological ﬂaws outlined in this REDD+ advice where all parties agree to2. Revise methodologies to reﬂect report by ensuring the plans: fully address a fully open and transparent tendering international norms in biological carbon the major drivers of deforestation; focus on process; full public disclosure of advice; accounting, and apply a consistent and natural forest protection while prioritising and proper participation of civil society transparent approach. protection of large intact forests and organisations, indigenous peoples and other biodiversity hotspots; include goals the local communities.3. Fully assess and include the transaction, to achieve zero deforestation, and fully environmental and social costs associated apply as a bare minimum the safeguards for 3. Not commit further funding to REDD+ with each abatement option suggested in biodiversity and community and indigenous plans until a thorough review has taken advice or analysis. peoples’ rights included in the Cancun place to ensure that they address the Agreement on REDD+. methodological ﬂaws outlined in this4. Publicly commit to ensuring that all REDD+ report, so that they: fully address the advice and analysis explicitly recognises 3. Ensure a full and transparent tendering major drivers of deforestation; focus on and protects non carbon values of natural process for any further contracts for REDD natural forest protection while prioritising forests and does not allow the timber advice, including publicly available terms of protection of large intact forests and industry to destructively exploit forests as a reference, and ensure transparency of all other biodiversity hotspots; include goals climate mitigation measure. funding sources. to achieve zero deforestation; and fully apply as a bare minimum the safeguards for5. Publicly commit to ensuring that all advice 4. Publish all advice received so far, and biodiversity and community and indigenous will demonstrate as a bare minimum all future advice, in full, along with full peoples’ rights included in the Cancun consistency with the safeguards for disclosure of terms of reference, any Agreement on REDD+. biodiversity and community and indigenous tendering documentation, costs and peoples’ rights included in the Cancun funding sources. 4. Introduce explicit national funding Agreement on REDD+. policies for REDD+ which make it clear 5. Ensure that all advice is developed with that funding will not be given bilaterally6. Fully disclose all instances where the full participation of, and is open to or through multi-lateral institutions until McKinsey has provided advice to scrutiny, amendment and/or rejection REDD+ plans are changed, and provide companies associated with the drivers of by, civil society organisations, indigenous support to revise these plans so that deforestation in countries where they are peoples and the local communities they fully address the major drivers of advising on REDD+. impacted by REDD+ plans. deforestation, demonstrate a focus on natural forest protection, include goals 6. Revise REDD+ plans so that any to achieve zero deforestation, and fully accounting rules for forestry which apply as a bare minimum the safeguards allow and enable the timber industry to for biodiversity and community and destructively exploit forests as a climate indigenous peoples’ rights included in the mitigation measure are excluded. Cancun Agreement on REDD+. 5. Introduce explicit national funding policies for REDD+ which make it clear that funding will not be given bilaterally or through multi-lateral institutions, for REDD+ plans that rely on accounting rules for forestry which allow and enable the timber industry to destructively exploit forests as a climate mitigation measure.Full implementation of the Cancun Agreements should also now further strengthen the scrutinyapplied to REDD+ plans and help to ensure that plans are not considered for funding unless they clearlyprioritise the protection of natural forests, protect biodiversity, and recognise the rights of localcommunities and indigenous peoples as requested in the UNDRIP.208These principles must provide the foundations for a new round of REDD+ plans, which reject advicebased on faulty assumptions and poor quality analysis and build instead on the willingness of theinternational community to protect once and for all the global heritage of our natural tropical forestsand all who depend on them.
30 Endnotes List of documents referred to in 1 www.mckinsey.com/aboutus/whatwedo/ from the other country reports under endnotes by abbreviations: 2 www.unesco.org/new/en/natural-sciences/ discussion in that it ‘does not evaluate the about-us/single-view/news/protecting_ economic value of the standing forest itself, POT Ministry of the environment, nature biodiversity_protecting_forests/ which consists of the revenue from selling conservation, and tourism ‘Potentiel 3 www.un.org/en/events/iyof2011 deforested timber and the alternative use REDD+ de la RDC’ French version, (‘The 4 IPCC WGIII (2007) Figure SPM.1 of the land’33 and does not claim REDD Democratic Republic of Congo’s REDD+ 5 See Humphreys, D (2006) Logjam: credits based on opportunity cost. Brazil Potential’ - English version) December Deforestation and the Crisis of Global is ahead of other major tropical forest 2009 Wholly or partly McKinsey- Governance (London: Earthscan). countries in developing its approach to authored report on application of its cost 6 UNFCCC2007 decision 2/CP.13 deforestation and it appears that, in this curve methodology to the DRC 7 www.forestcarbonpartnership.org/fcp/ report, McKinsey has turned its cost curve sites/forestcarbonpartnership.org/ﬁles/ to supporting existing policy rather than CIAD Ofﬁce of the President of Guyana Documents/PDF/Nov2010/FCPF%20%20 attempting to inﬂuence future plans. ‘Creating incentives to avoid one%20pager%2011-21-10%20.pdf Because of this, the Brazil report is only deforestation’ December 2008 8 www.climateinvestmentfunds.org/cif/ occasionally referred to below. www.lcds.gov.gy/images/stories/ node/5 34 Information on countries’ readiness Documents/Guyana%20Ofﬁce%20 9 www.economist.com/node/15129518 activities under the FCPF, and of%20the%20President%20 10 www.economist.com/node/15129518 their participation in the Forest Avoiding%20Deforestation%20 11 www.conservation.org/newsroom/ Investment Program, is taken from Paper.pdf Wholly or partly drafted by pressreleases/Pages/Reaction- the FCPF website, speciﬁcally the FCPF McKinsey, this is the ﬁrst published Developed-Pledge-Forest- Dashboard (revised October 2010, source for Guyana’s baseline-setting ProtectionIsNotNearlyEnough.aspx www.forestcarbonpartnership.org/ strategy and claims for REDD+ funding 12 www.mckinsey.com/aboutus/whatwedo/ fcp/sites/forestcarbonpartnership. 13 www.businessweek.com/magazine/ org/ﬁles/Documents/PDF/Nov2010/ LCDS ‘Low Carbon Development Strategy: content/02_27/b3790001.htm FCPF%20Readiness%20Progress%20 Transforming Guyana’s Economy 14 www.mckinsey.com/aboutus/whoweare/ MASTER_103110.pdf), the chronological while Combating Climate Change’ 15 www.mckinsey.com/aboutus/locations/ digests of individual countries’ May 2010 www.lcds.gov.gy/ 16 www.mckinsey.com/aboutus/whatwedo/ R-PP submissions (indexed at www. images/stories/Documents/Low%20 17 www.mckinsey.com/aboutus locations/ forestcarbonpartnership.org/fcp/ Carbon%20Development%20 18 www.businessweek.com/magazine/ node/257), and the individual countries’ Strategy%20-%20May%202010.pdf content/02_27/b3790001.htm REDD Readiness Progress Fact Sheets Follow up to CIAD and incorporates 19 www.businessweek.com/magazine/ (September’October 2010, indexed at much of its strategy wholesale content/02_27/b3790001.htm www.forestcarbonpartnership.org/fcp/ 20 http://uk.reuters.com/article/2009/10/20/ node/283). Information of countries’ SDCCD ‘Climate-compatible development for mckinsey-insider-trading- UN-REDD programmes is taken from the PNG - Second draft’ March 2010 Largely idUKLNE59J00L20091020 UN-REDD website (www.un-redd.org/ McKinsey-authored report on application 21 www.themonthly.com.au/nation-reviewed- UNREDDProgramme/CountryActions/ of its cost curve methodology to PNG. malcolm-knox-hard-stuff--2507 tabid/584/language/en-US/Default. 22 www.independent.co.uk/news/business/ aspx and speciﬁc country pages as IAP GoPNG Ofﬁce of Climate Change and analysis-and-features/the-might-of-the- indicated). Information on the measures Development ‘Interim action plan for mckinsey-mob-664081.html and approaches advocated by McKinsey climate-compatible development’ June 23 Pers. comm. to Greenpeace, 3 November summarises information given in more 2010 Study incorporating and updating 2010 detail in the body of this brieﬁng. much of SDCCD’s analysis – probably 24 www.mckinsey.com/aboutus/whatwedo/ 35 DRC dossier, section 9.a.I p38 for largely authored by McKinsey 25 McKinsey & Company (2009) Elaboration further discussion d’une analyse exploratoire du potentiel 36 DRC R-PP p147; Intergovernmental NPD ‘UN-REDD PNG National joint REDD+ de la Republique Democratique du taskforce (2010) REDD+ survey: Democratic programme document’ GoPNG, FAO, Congo: Dossier de candidature 23 October Republic of Congo p1, www.oslocfc2010.no/ UNDP, UNEP September 2010 REDD+ p9-10 pop.cfm?FuseAction=Doc&pAction=View& Plan incorporating much analysis from 26 POT para 11, p4: ‘Ses ambitions pDocumentId=24929 IAP – probably worked on by McKinsey dans le cadre de cette stratégie sont 37 Republique Democratique du Congo: d’actionner à la fois tous les leviers de Fonds Commun Multibailleurs pour CC DNPI (National Council on Climate mitigation envisageables à des coûts le Renforcement de la Gouvernance Change) ‘Indonesia’s GHG Abatement acceptables de même que ceux de Forestiäre (2010) Rapport Final August p.1, Cost Curve’ August 2010 Partly séquestration.’ 9, 11, 14 McKinsey-authored report on application 27 McKinsey & Company (2009) 38 Ibid. p14 of its cost curve methodology to Indonesia Mengembangkan cost curve pengurangan 39 POT paras 47, 59 – main target of this dossier carbon untuk Indonesia p8, 19-22 40 http://unfccc.int/ﬁles/methods_science/ 28 CC p21 redd/country_speciﬁc_information/ While we haven’t directly quoted from the 29 McKinsey & Company (2010) ‘Creating low application/pdf/eng_ﬁnal_report_ Rainforest Foundation UK’s report ‘McREDD carbon prosperity in Indonesia: Detailed exploring_redd_potential_071209.pdf p35 How McKinsey ‘cost-curves’ are distorting project overview (Phase 3): Institutional 41 POT para 59 REDD’, we would like to acknowledge it as a capability building for low carbon growth’ 5 42 POT para 47, p19 comprehensive resource showing how advice February 5 2010 43 POT para 59, p28 given by international consultants, McKinsey & 30 Dr Justin Ondopa, Climate Change 44 80 Mt CO2e at 13 Euros / t CO2e POT p27 Company, to governments of forested nations Coordinator with PNG Eco Forestry Forum 45 POT p27 could harm the scheme to stem destruction of and observer to the REDD Technical Working 46 Ibid p39 the rainforest, known as REDD. Group, pers. comm. to Greenpeace, 10 47 Endundo, J (2011) ‘Clôture du processus November 2010; corroborated by a 28 du conversion des anciens titres forestiers September 2010 letter from Kenn Mondiai, et perspectives dans le secteur de Chairman of PNG EFF to Dr Wari Iamo of the l’exploitation forestière en RDC’, press OCCD, available at http://pngexposed.ﬁles. release 29 January p5 wordpress.com/2010/10/ngo-letter.pdf 48 Guyana dossier, section 9.a.I, p52-53 31 PNG dossier, section 8a p31 49 Ian Gray, DFID Openness Unit, letter 32 McKinsey & Company ‘Elaboration d’une of 10 November 2010 and attached analyse exploratoire du potential REDD+ de la Memorandum of Understanding Republique Democratique du Congo: Dossier (undated, but apparently drafted before de candidature’ 23 October 2009 p10 1 June 2008 when the project was due 33 McKinsey’s cost curve report Pathways to commence, though signed by UK to a low carbon economy for Brazil differs and Guyanese representatives on 20
31 March and 26 March 2009 respectively) Indonesia: Readiness phase, draft, August, 109 POT, p19 140 CC p17 in response to Greenpeace Freedom Table 4 p35 110 POT, p25 141 Greenpeace International ‘REDD en RDC: of Information Act request. See also 74 Mogstad, Per (2010) Email to Greenpeace 111 IAP: p7 Menace ou solution?’ November 2010 p14 discussion in our Guyana dossier, section from Norwegian Ministry of Foreign Affairs 112 Overseas Development Institute (2007) 142 Greenpeace International ‘REDD en RDC: 6.a, p41-42. in response to freedom of information ‘Issues and opportunities for the Forest Menace ou solution?’ November 2010 p1450 ‘Memorandum of understanding request, 26 November Sector in Papua New Guinea’ 143 based on 381.9MtCO2e (DNPI (Dewan between the Government of the 75 Excluding 10% VAT but minus a discount 113 CC p19 Nasional Perubahan Iklim – National Cooperative Republic of Guyana and equivalent to roughly $1.5 million 114 Greenpeace International ‘REDD Alert: Council on Climate Change) ‘Fact Sheet the Government of the Kingdom of 76 Excluding 10% VAT and minus a discount Protection Money’ November 2010 – Carbon Emissions and Development’ 2 Norway regarding cooperation on issues equivalent to roughly $2.5 million www.greenpeace.org/international/en/ September 2010 p4) at $29/tonne (CC p21) related to the ﬁght against climate 77 CC p21 publications/reports/Protection-Money/: 144 LCDS: 26 change, the protection of biodiversity 78 Greenpeace International ‘REDD Alert: 42-43 145 Robert Goodland, ‘Guyana: Amaila Falls and the enhancement of sustainable Protection Money’ November 2010 115 LCDS p91 Hydro: Social and Environmental Aspects’ development’ reproduced in LCDS p67- www.greenpeace.org/international/en/ 116 POT para 142, p55; similar disclaimers Bank Information Centre, 19 October 2010 68 publications/reports/Protection-Money/: appear in other countries’ reports www.bicusa.org/en/Document.102355.51 See our Guyana dossier, section 2.d p4-10 31-32, CC p21 117 POT p25, p31 Etude potential REDD+ aspx p2 for further discussion 79 CC p21 118 Forest Carbon Partnership Facility ‘Revised 146 Robert Goodland, ‘Guyana: Amaila Falls52 www.forestry.gov.gy/Downloads/Guyana_ 80 CC p20 FCPF TAP Synthesis Review of R-PP of Hydro: Social and Environmental Aspects’ MRVS_Interim_Measures_Report_2010_ 81 CC p22 DRC’ 17 Mar 2010. p8-9 Bank Information Centre, 19 October 2010 Final_January_2011.pdf, p iv 82 DNPI (2010a): 21 119 CC p21 www.bicusa.org/en/Document.102355.53 CIAD p19, LCDS p20 83 Based on $28-29/tonne CO2e and 192t 120 Greenpeace International ‘REDD Alert: aspx p254 www.forestry.gov.gy/Downloads/Guyana_ carbon (705tCO2e) per hectare. Source: Protection Money’ November 2010 147 At conversion factors of 0.47 biomass: MRVS_Interim_Measures_Report_2010_ DNPI (2010a): 21 Exhibit 12, 22 www.greenpeace.org/international/en/ carbon, 3.67 carbon: CO2 Final_January_2011.pdf, p iv 84 P42 Greenpeace report Protection Money publications/reports/Protection-Money/: 148 Robert Goodland, ‘Guyana: Amaila Falls55 LCDS p10, 12 2010 31-32, CC 21 Hydro: Social and Environmental Aspects’56 Robert Goodland ‘Guyana: Amaila Falls 85 BAPPENAS /UN-REDD (2010): 41 121 CC p21 Bank Information Centre, 19 October 2010 Hydro: Social and Environmental Aspects’ establish a technical carbon threshold for 122 POT para 124, p50-51 www.bicusa.org/en/Document.102355. Bank Information Centre, 19 October 2010 land suitable for low carbon development 123 For example, no implementing legislation aspx p3 www.biscusa.org/en/Document.102355. (<35tC/ha), as well as land meriting has yet been produced for the 2002 Forest 149 Robert Goodland, ‘Guyana: Amaila Falls aspx p2 conservation purely for its carbon storage Code (DRC R-PP p130) nor, astonishingly, Hydro: Social and Environmental Aspects’57 Robert Goodland ‘Guyana: Amaila Falls potential (potential to store >100tC/ha) for the Land Tenure Law of 1973 Bank Information Centre, 19 October 2010 Hydro: Social and Environmental Aspects’ 86 www.mckinsey.com/aboutus/whatwedo/ (Cotula, L and Mayers, J (2009) Tenure www.bicusa.org/en/Document.102355. Bank Information Centre, 19 October 2010 87 McKinsey conﬁrmed this to Greenpeace in in REDD: Start-point or afterthought?, aspx p6 www.biscusa.org/en/Document.102355. face to face meeting International Institute for Environment and 150 POT Planche 10, p26 aspx p2 88 For more on this problem, see: Ekins P, Development, London, p35) 151 IAP: 10, further discussion in our PNG58 At conversion factors of 0.47 biomass: Kesicki, F, Smith, A ‘Marginal abatement 124 To give one of many possible examples, dossier section 2.e, p10 carbon,3.67 carbon: CO2 cost curves: a call for caution’ 2010 p19 the whole vast country has only 50 forest 152 DNPI (Dewan Nasional Perubahan59 The evidence is set out in detail in our 89 POT para 56, p27 agents (DRC R-PP 58) Iklim ‘National Council on Climate PNG dossier, section 9.a.I (p35-36). 90 POT Exhibit 13 (NB only in English version). 125 For example, local forest administrations are Change) ‘Fact Sheet ‘Carbon Emissions Among the most compelling instances Calculation based on 900 ha planted largely dependent upon logging companies and Development’ 2 September 2010: are the fact that the Properties box of the annually for 5 years (4500 ha total) and themselves for information, logistics, p4 gives emissions reductions from ‘Climate-compatible development’ PDF 2.5m tCO2 (681,199tC) sequestered after transport and ﬁnance, and bribery is frequent stopping plantation development gives the producer as ‘McK PDF Writer’ 30 years, ie 556t CO2e uptake per hectare, (Greenpeace International (2008) Étude as 190.95MtCO2e for each of estate (just like the second draft of Guyana’s equivalent to 151t carbon. Sectorielle: Exploitation forestière en République crops and timber plantations - ie (LCDS) and the fact that the ofﬁcial body 91 Humid, low-altitude dense forest in Congo Démocratique du Congo, October, p3). 381.9MtCO2e (eq. 104Mt carbon) credited with producing the ‘Interim Basin 126-275tC/ha Souce: ‘Un aper’u des 126 Acknowledged by the DRC’s Readiness for the two combined. Divided by Action Plan’ did not start work until two stocks de carbone et leurs variations dans Preparation Proposal (Ministry of the CC’s ﬁgure of 192tC/ha in forest land months after its publication. les foràts du bassin du Congo’ Nasi, R et al, Environment, Nature Conservation and (CC p22) this gives an estimated60 www.un-redd.org/UNREDDProgramme/ in Etat des Foràts 2008 p207 Tourism (MECNET) (2010) Readiness Plan 542,000ha of avoided deforestation CountryActions/PapuaNewGuinea/ 92 Ekins P, Kesicki, F, Smith, A ‘Marginal for REDD, 2010-2012 ‘R-PP Final Version, from plantation establishment in tabid/1026/language/en-US/Default.aspx abatement cost curves: a call for caution’ July, p131). See also Cotula, L and Mayers, 2030. On the same logic, avoided61 Ibid. p32-33 (2010) p25 J (2009) Tenure in REDD: Start-point or deforestation from smallholder62 IAP p27 93 IAP: 10, CC p21 afterthought?, International Institute for agriculture in 2030 would be around63 IAP p11 94 POT para 56 p27 Environment and Development, London, p21 273,000 hectares. BAU deforestation64 SDCCD p18-19, IAP p11 95 See for example Greenpeace International 127 www.forestcarbonpartnership.org/fcp/ in 2030 is predicted at 1.1m ha65 IAP p10 ‘REDD Alert: Protection Money’ November sites/forestcarbonpartnership.org/ﬁles/ annually (CC p20), suggesting that66 IAP p11 2010 www.greenpeace.org/international/ Documents/PDF/APR2010/4b-DRC_R- even under full implementation of67 www.un-redd.org/UNREDDProgramme/ en/publications/reports/Protection- PP_Presentation_FCPF_LOPE_ENG_2.pdf, CC’s plan, 285,000ha of natural forest CountryActions/Indonesia/tabid/987/ Money/ : 39-42 p24 would continue to be cleared each year. language/en-US/Default.aspx 96 Greenpeace International ‘REDD Alert: 128 POT para 77, p37: ‘la ﬁnalisation de la 153 CC p2268 eg BAPPENAS (Indonesian Ministry Protection Money’ November 2010 rÇforme institutionnelle’ 154 McKinsey & Company, ‘Pathways to a low for National Development Planning) www.greenpeace.org/international/en/ 129 POT para 80, p38 carbon economy for Brazil’ 2009: 7 (2010) Indonesia Climate Change Sectoral publications/reports/Protection-Money/ : 7-8 130 Chatterton, Paul (2010) Review of the 155 McKinsey & Company‘Supporting the Roadmap: Synthesis Report, March, p6 97 IAP p10-11 UN-REDD Joint Program in Papua New development of PNG’s national REDD69 DNPI (National Council on Climate Change) 98 McKinsey & Company, ‘Pathways to a low Guinea, pp2-3, http://un-redd.org/ and climate change plans: draft project /UNFCCC ‘National Economic, Environment carbon economy for Brazil’ 2009 p31 PolicyBoard/5thPolicyBoard/tabid/1002/ proposal’ June 2009 p6 and Development Study (NEEDS) for 99 POT Planche 16, p59 Default.aspx 156 CC p18 Climate Change: Indonesia Country Study’ 100 Series of articles by Janette Bulkan in 131 www.mckinsey.com/aboutus/whatwedo/ 157 http://en.wikipedia.org/wiki/Bornean_ December 2009 p76 Stabroek News July-August 2009 www. 132 LCDS website FAQ www.lcds.gov.gy/faqs. Orangutan70 Intergovernmental taskforce (2010) REDD+ redd-monitor.org/wordpress/wpcontent/ html#18: 158 Rhee, S, Kitchener, D, Brown, T, Merrill, survey: Indonesia, p1-2, available at www. uploads/2009/08/REDD_SN_series_July_ 133 IAP p8 R, Dilts, R and Tighe, S (2004) Report oslocfc2010.no/pop.cfm?FuseAction=Doc August_2009_carbon_in_Guyana.pdf p26 134 Mining and hydrocarbon extraction are on biodiversity and tropical forests in &pAction=View&pDocumentId=24932 101 IAP p10 predicted to be responsible for 9% of BAU Indonesia, USAID/Indonesia, Jakarta, p7.12,71 Ibid, p2-3 102 SDCCD p19 deforestation to 2030. POT para 47, p22 available at www.rmportal.net/library/72 MRV are monitoring systems that allow 103 SDCCD p2 135 POT para 59, p31-32 content/1/118_indon for credible measurement, reporting and 104 www.mckinsey.com/aboutus/whatwedo/ 136 IAP Exhibit 7, p10 159 POT paras 59, p29-31and 106, p44 veriﬁcation of REDD+ activities 105 LCDS p77 137 IAP Exhibit 3, p6 160 CC p2173 Ministry of Forestry (2009) National 106 LCDS p51 138 http://en.wikipedia.org/wiki/Ok_Tedi_ 163 IAP p11 Strategy: Reducing emissions from 107 CC p18 Environmental_Disaster 164 IAP p29 deforestation and forest degradation in 108 POT, p19 139 SDCCD p17 165 Edwards, D, TH Larsen, TDS Docherty, FA
32 Ansell, WW Hsu, MA DerhÇ, KC Hamer and 180 POT para 98, p42 whatwebelieve/ DS Wilcove (2010) Degraded lands worth 181 IAP p10 194 For a fuller discussion of this issue, see our protecting: the biological importance of 182 SDCCD p20 Guyana dossier, section 6.a, p41-42. Southeast Asia’s repeatedly logged forests, 183 Thomas K. Rudel, Agricultural 195 On the grounds that, while this would yield Proc.R. Soc. B, published online 4 August intensiﬁcation and changes in cultivated three times the emission savings of reduced 2010. doi: 10.1098/rspb.2010.1062 areas, 1970-2005 impact logging, it would do so at a higher 166 POT paras 56, p27; 59, pp29-31; and 90, 184 SDCCD p19 opportunity cost – though scarcely higher pp40-41 185 NPD p7-8 than that for afforestation (see IAP p10) and 167 Chidumayo, E (1999) Using Natural 186 IAP exhibit 7, p10 with an abatement potential at least three Fertilizers in Miombo Woodlands, Issues in 187 Acknowledged by the DRC’s Readiness times as great as any other lever discussed. African Biodiversity 2, Biodiversity Support Preparation Proposal (Ministry of the 196 IAP p11 Program, p1, available at pdf.usaid.gov/ Environment, Nature Conservation and 197 UN-REDD Programme (2010) National pdf_docs/PNACK011.pdf Tourism (MECNET) (2010) Readiness Plan Programme Submission Form – Papua 168 IAP p11 for REDD, 2010-2012 ‘R-PP Final Version, New Guinea, p10, un-redd.org/ 169 IAP p11 July, p131). See also Cotula, L and Mayers, PolicyBoard/5thPolicyBoard/tabid/1002/ 170 CC p21 J (2009) Tenure in REDD: Start-point or Default.aspx 171 WWF (2001),Trans Fly savanna and afterthought?, International Institute for 198 Chatterton, Paul (2010) Review of grasslands, www.worldwildlife.org/ Environment and Development, London, p21 the UN-REDD Joint Program in Papua wildworld/proﬁles/terrestrial/aa/aa0708_ 188 The legislation in question is the New Guinea, p1, http://un-redd.org/ full.html Environment (Amendment) Act 2010: see PolicyBoard/5thPolicyBoard/tabid/1002/ 172 Dr Justin Ondopa, Climate Change Callick, R (2010) PNG law to shield resource Default.aspx Coordinator with PNG Eco Forestry Forum giants from litigation, The Australian 199 Forest Carbon Partnership Facility ‘Revised and observer to the REDD Technical (Canberra), 2 June, p24. For a more detailed FCPF TAP Synthesis Review of R-PP of Working Group, pers. comm. to Greenpeace, analysis of the act and its implications, see DRC’ 17 Mar 2010 p9, 14 10 November 2010 www.actnowpng.org/sites/default/ﬁles/ 200 Carbon Partnership Facility ‘Revised FCPF 173 WWF (2001) Central Range sub-alpine BRIEFING%20PAPER%20%20enviro%20 TAP Synthesis Review of R-PP of DRC’ 17 grasslands, www.worldwildlife.org/ amend%202010.pdf. Greenpeace Mar 2010 p14 wildworld/proﬁles/terrestrial/aa/aa1002_ Australia Paciﬁc has been advised by a 201 Ministry of the environment, nature full.html legal expert that the Act is applicable to conservation, and tourism ‘Readiness Plan 174 LCDS p10, 12 any development deemed in the national for REDD, 2010-2012 – R-PP Final Version’ 175 Evans, Pamela (2002) Agricultural interest (potentially including forestry, July 2010 p59 development on the move in the agriculture and plantation), not merely to 202 Ministry of the environment, nature Intermediate Savannahs, Guyana Chronicle, mining, although the latter has so far been conservation, and tourism ‘Readiness Plan 1 September, www.landofsixpeoples.com/ the focus of objections. for REDD, 2010-2012 – R-PP Final Version’ news022/nc209016.htm 189 LCDS p35 July 2010 p131 176 Hanif, M and Otto, R (1978) Impact 190 An injustice of which Amerindian 203 Anon. pers. comm. 3 November 2010 identiﬁcation and evaluation: Guyana Small communities are keenly aware: see for 204 BAPPENAS (Indonesian Ministry for Farm Development Project, Annex IV, example Amerindian Peoples Association/ National Development Planning) ‘Indonesia Exhibit 1 in Department of State, Agency for Forest Peoples Programme (2009) Climate Change Sectoral Roadmap: International Development (1978) Proposal Indigenous peoples’ rights, REDD and the Synthesis Report’ March 2010 and Recommendations for the Review of draft Low Carbon Development Strategy 205 For example BAPPENAS (Indonesian the Bilateral Assistance Subcommittee: (Guyana): A summary report of a workshop Ministry for National Development Guyana – Small Farm Development, Black held in the Regency Suites, Georgetown, 24- Planning) ‘Indonesia Climate Change Bush Region, p6-7, http://pdf.usaid.gov/ 26 June 2009, p3-4, www.forestpeoples. Sectoral Roadmap: Synthesis Report’ pdf_docs/PDAAA043B1.pdf org/sites/fpp/ﬁles/publication/2010/08/ March 2010 p88: ‘It is far more effective 177 Naipaul, Chamanlall (2007) $6.5M guyanareddiprightswshoprepjun09eng.pdf. to avoid deforestation than to rehabilitate needed to kick-start ethanol production See also discussion in our Guyana dossier, forestland’ – UN report, Guyana Chronicle, 1 May, section 5.b, p33-35. 206 BAPPENAS (Indonesian Ministry for www.landofsixpeoples.com/news702/ 191 See for example posting from Nelly Avila on National Development Planning) ‘Indonesia nc0705013.html REDD+ Monitor website, 30 October 2010, Climate Change Sectoral Roadmap: 178 Cited in Government of Guyana (n.d.) www.redd-monitor.org/2010/10/13/redd- Synthesis Report’ March 2010 p9-10 Investing in Guyana’s Low Carbon Future: rubber-hits-the-road-in-guyana-skid- 207 BAPPENAS (Indonesian Ministry for Agriculture, www.agriculture.gov.gy/ marks-a-plenty/ (re TAAMOG and NADF); National Development Planning) ‘Indonesia Investment%20in%20Guyana/Investing%20 Amerindian Peoples Association/Forest Climate Change Sectoral Roadmap: in%20Guyana%27s%20Low%20Carbon%20 Peoples Programme (2009) Indigenous Synthesis Report’ March 2010 p80, 85 Future.pdf peoples’ rights, REDD and the draft Low 208 United Nations Declaration for the Rights of 179 IAP Exhibit 7, p10. It is unclear what the Carbon Development Strategy (Guyana): A Indigenous Peoples, adopted by 144 states. levers included have in common, as two summary report of a workshop held in the (agricultural extension and afforestation/ Regency Suites, Georgetown, 24-26 June reforestation) might be assumed to have 2009, p5 (re National Toshaos Council (NTC); negative biodiversity impacts that needed and APA executive members and others mitigating, while the third (secondary forest (2010) Indigenous peoples demand action management) presumably would not. on land rights, consent issues, press release 180 POT paras 87-89, p40 from workshop on ‘Indigenous Peoples’ 181 For example, in the context of PNG, Keenan, Rights, Extractive Industries and National Rodney J (2009) ‘Disturbance, degradation, Development Policies in Guyana’, 9 March, and recovery: forest dynamics and climate www.forestpeoples.org/topics/extractive- change mitigation’ (XIII World Forestry industries/news/2010/08/press-release- Congress Buenos Aires, Argentina, 18 - 23 guyana-indigenous-peoples-demand- October), p6; in the context of Guyana, action-land (re NTC). On the NTC, see also Cedergren, Jonas (2009) ‘Measurement our Guyana dossier, section 5.b, p35-36. and reporting of forest carbon in Guyana: 192 Widely reported, eg Kaieteur News (2010) Preparing for REDD implementation’, UN- 38 foreign groups write Jagdeo to protect REDD, p.5, www.fao.org/climatechange/ Amerindian leader, 21 December, www. unredd/53128/en/ (ironically the one kaieteurnewsonline.com/2010/12/21/38- country surveyed where, perhaps due to foreign-groups-write-jagdeo-to-protect- the relative strength of the indigenous lobby amerindian-leader/; REDD-Monitor (2010) as well as the special nature of the approach President of the Amerindian Peoples taken to REDD+, shifting agriculture is not Association gets death threats in Guyana, proposed to be targeted in the documents 21 December, www.redd-monitor. on which McKinsey has worked, though the org/2010/12/21/president-of-the- government itself has equivocated over the amerindian-peoples-association-gets- issue – see the discussion in our dossier, death-threats-in-guyana/ section 5c, p39) 193 www.mckinsey.com/aboutus/