Will PNG Cash in on ‘Carbon Credits’?

By Paul Oates

A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or carbon dioxide equivalent (CO2). (Wikipedia definition)

The concept of Carbon Credits came out of the 1997 Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC). Under the Kyoto Protocol, those who are currently producing greenhouse gases and primarily Carbon Dioxide (CO2) a gas that is reportedly causing global warming, are allowed to offset that production of CO2 with Carbon Credits. Carbon Credits can also be traded between those who have them and those who need them in order to continue their CO2 producing activities as usual without suffering any yet to be determined penalties.

In order to understand how the Carbon Credit Trade is progressing, an organization called Probe International has compiled an ‘on line’ data base of those Credits that reveals who is cashing in on Carbon Credits.

Significantly, PNG currently only figures in 2 out of many hundreds of transactions so far. One of the major producers of greenhouse gases (China) and therefore CO2, is apparently also one of the biggest recipients of Carbon Credits.

PNG PM sees RED(D)

PM Somare has been very critical of agencies such as the UN and the World Bank who are trying to specify how Carbon Credits can actually be monitored. PNG is co-chair of the REDD (Reducing Emissions from Deforestation and Degradation) negotiations. Apparently PNG is arguing that a reduction in monitoring of the eventual process will speed up negotiations. It doesn’t take the proverbial ‘Blind Freddy’ to work out what Somare actually wants?

Sam Moko, a PNG forests campaigner, is quoted as saying. “With a reputation of corruption, complete disregard for land owner rights, free and prior informed consent and accurate estimations of likely benefits, PNG is in no fit state to be receiving REDD funding without strict conditions in place. The PNG delegation is using its position to keep green groups and indigenous people’s groups away from meetings in an attempt to keep rules on social and biodiversity safeguards out of the REDD framework.”

Carbon Sinks

Previous guarantees have been made by European countries that they would provide billions of dollars to countries who currently still have rainforests to keep their forests in the ground and thus provide a ‘Carbon Sink’. A Carbon Sink is a term that refers to a method of sustainably capturing free Carbon Dioxide and thus removing the Carbon from the Earth’s atmosphere. Forests are one method of achieving this requirement. In essence, this is what happened millions of years ago during the Carboniferous Period when the deposits of coal were formed that are now being burnt to produce electricity.

So the position of the PNG government concerning Carbon Trading may seem to be rather ambiguous. On one hand, the government has clearly sanctioned the large scale felling and extraction of PNG native forests. Yet on the hand, it is now claiming to be frustrated at delays in receiving payments from those counties that have previously agreed to provide funds to leave PNG forests alone to act as a ‘Carbon Sink’.

The Full Cost of Alternative Energy

Those who are currently proposing the use of alternative energy production should logically also be proposing a negative period from the date of the installation of the wind generator or solar panel in order to compensate for the amount of greenhouse gases produced during the manufacture of the device.

Introducing large wind and solar powered electricity generators to PNG may therefore be very disadvantagious to the future user in the short term. The long term benefits may also be questioned if these devices breakdown and have to be replaced.

PNG’s Potential Power Sources

PNG’s abundant potential for hydroelectric generation has been eyed off by the Queensland government who have recently announced a potential scheme to bring electricity from the Purari to Queensland via an under sea cable link. Yet what happens when PNG needs this power and the potential Carbon Credits that go with it, herself?

The media has recently reported that the residents of the potential hydro scheme apparently know nothing about it. The concept therefore of a vulnerable power cable being disrupted by disgruntled PNG landowners is not impossible to imagine.

A Carbon Tax and PNG

It seems an apparent travesty that a ‘Carbon Tax’ is being touted by some countries as a way of reducing CO2 emissions. Yet those who may be least able to afford this tax may have to pay this additional cost on top of the current cost of a product. Everyday items imported and used by PNG consumers may soon become more expensive if this tax is imposed by countries that produce exports to PNG.

Increasing World Energy Requirements

The problem of energy production is further complicated by an ever increasing world population that requires more and more electricity. The more energy required currently equates to more CO2 than can be captured and stored by the ever decreasing world forests. The problem for PNG is that many of the local forests have already been felled and removed in a non sustainable manner by reportedly foreign owned timber companies.

The overall dilemma is that while countries currently producing excess CO2 are allowed to trade Carbon Credits with those who have them, there will be no real change in the overall amount of CO2 being produced and therefore, no benefit in reducing global warming. Those claiming global warming is adversely affecting them already seem ponderously slow in grasping this axiomatic ‘nettle’.

What’s in it for PNG?

Can PNG effectively benefit from any effective Carbon Trading? It seems ‘the jury is still out’ on this question.

————————————————————————————–

See Also: McKinsey’s REDD plans in Papua New Guinea: Nice work if you can get it