Voluntary Carbon Agreements Not Supported by the Government

By Emmanuel Narokobi

As reported in today’s National, Dr Wari Iamo who is Acting executive director of the Office of Climate Change (OCC) and also Secretary for the Department of Environment and Conservation stated that, “…PNG is taking a leading role on reducing emissions from deforestation and degradation (REDD) as mandated under the Bali Road Map” and as part of the Coalition of Rain Forest Nations (CRFN) PNG is involved in negotiations to setup separate funding mechanisms to deal with REDD.

Dr. Iamo said that a team of professionals were working on the separate funding mechanisms which were aimed at focusing on mitigation, adaptation, technology and finance. This was expected to be completed soon for CRFN members such as PNG, United Nations, World Bank, Australia, UK, Norway, Japan and others.

Looks like the OCC is slowly getting back on track with Dr. Iamo who is an environmental scientist himself, and its absolutely important because even the Media Council President Joe Kanekane commented at a media conference that there seemed to be a perception that the OCC was a “money-making body”.

Dr. Iamo also addressed some outstanding issues in another media statement today that went as follows:

“This statement is in response to recent media reports on agreements being entered into by land owners and certain companies, with respect to rights over carbon.

The Government recently acted to suspend the Executive Director of the OCC and to have a review undertaken of the OCC operations, partly to deal with serious issues such as carbon trading agreements.

Currently PNG does not have an institutional framework that regulates carbon trading. The Government intends to wait until the global community rules for forest carbon trading under the Reduced Emissions from Deforestation and Degradation (REDD) initiative are developed before drafting policies and legislation. The United Nations Framework Convention on Climate Change meeting should determine the types of rules countries can apply for carbon trading under the REDD.

Furthermore, the Prime Minister recently released a a Media Statement that clarified the Governments position on carbon trading. The Government’s goal is to have the role of tropical rain forests formally recognized in future climate arrangements. The Prime Minister is strongly arguing that PNG should wait for the development of formal mechanisms under the Reduced Emissions for Deforestation and Degradation (REDD) initiative before entering into carbon trading initiatives.

Until such time as the Government develops a formal carbon trading framework there is no policy or legal guidance for the pursuance of carbon trading except under the Clean Development Mechanism (CDM) of the Kyoto Protocol. The CDM only allows for afforestation and reafforestation projects. The agreement reported in the media many of which cover areas logged after 1990 and intact forested lands under the Authority of the Forestry Act are not able to be registered under the CDM.

Voluntary Carbon Agreements (VCA) are not currently supported by the Government as they fall outside formal REDD arrangements and are highly unlikely to deliver high carbon prices. PNG would be selling its forests cheaply by going down the VCA path.

Finally, the Government wishes to provide clarity on the issue of agreements over areas under the authority of the Forest Act, in particular Forest Management Agreements (FMA). In the process of developing an FMA, landowners vest the right in the timber resources with the State.

Carbon trading agreements cannot be legally signed over these lands until the Government has put in place an appropriate policy and legal framework. This will not be done until after the completion of the investigation in the the OCC and following review of the outcomes of the critical global climate change meeting to be held in Copenhagen during December 2009.

In the event that disputes arise with respect to carbon trading agreements signed by landowners with carbon traders outside of areas under the Authority of the Forestry Act, the government may be unable to assist in resolving any conflicts.

The Government strongly advises landowners not to enter into any agreements with private companies relating to carbon until the rules for carbon trading have been agreed by the global community and the policy and legal framework for carbon trading has been determined”.