Four things 'green crypto firms' should know about a carbon offsets project in the Amazon
Human rights issues, large-scale logging and methodological flaws are the main concerns with a controversial project in Peru
The Thomson Reuters Foundation published a report last month about a Brazilian company called Moss, describing it as a ““green” crypto firm” and “major pioneer” in a “new market” for carbon credits that, instead of being bought to supposedly offset emissions, are being converted into “digital tokens” that can be traded on the “nearly trillion-dollar crypto market.” One of the carbon projects from which Moss has bought credits is the “Madre de Dios Amazon REDD+ Project”, in south-east Peru, which was listed on the company’s website until recently when I inquired about it. As part of its claim that Moss has “struggled to buy good-quality credits”, Thomson Reuters drew attention to the fact that the director of one of the companies involved with the project has been under investigation by a Peruvian anti-corruption public prosecutor, and that “a stash of suspected illegal mahogany” was found on his premises during a police and prosecutors’ raid last year.
Obviously such allegations are extremely serious, but there are far more fundamental problems with that Madre de Dios carbon project than the possible involvement of company personnel with some illicit “red gold”, as the super-valuable mahogany is sometimes known. Here are four of the most obvious:
1 In the blurb on its website Moss included some frankly weird nonsense about the project area being within the “Vilcabamba-Amboró Ecological Corridor” - which exists only in the minds of certain conservationists - described as “a national rainforest” - no such thing - stretching from the “Apurímac preservation area” - ditto - into Bolivia, but failed to acknowledge that the project area comprises, first and foremost, two industrial-scale logging concessions, as I’ve highlighted previously. Two companies known most commonly by the acronyms MADERYJA and MADERACRE have operated there for 20 years, and it’s those same two firms that run, together with a Uruguayan entity, Greenoxx, the carbon project. In other words, there is no one doing more to deforest that part of the Amazon than the very same people claiming to protect it.
When I asked Moss why they didn’t mention that the project area consists of two logging concessions they effectively ignored the question, replying instead that operations have been “certified and audited sustainable”, that “Moss is not officially responsible for the project”, and that it is “more appropriate to direct questions to the project proponents, developer, auditors and registry.”
2 Moss also failed to acknowledge on its website that a significant chunk of the project area - the western part of MADERYJA’s logging concession - falls within the territories of indigenous people living in “isolation”, as I’ve also previously highlighted. When an off-limits reserve for those people was established in 2002 that area was left out, despite indigenous federation FENAMAD’s recommendation that it should be included, but for some years now the government has been taking steps towards expanding the reserve, and both the Culture Ministry and a state-run Multi-Sector Commission have accepted that that area should be within it. In other words, the carbon project is not only two logging concessions, as if that wasn’t bad enough, but one of those concessions has been slapped on top of indigenous people’s land where operations pose a serious danger to their health and lives.
When I asked Moss why they didn’t mention this on their website either, they repeated their replies about not being responsible and directing questions at those who are, and referred to the sometimes direly misleading “project document and audited reports” which supposedly “discuss at length the project benefits and efforts to the protection of indigenous peoples living in isolation in the Madre de Dios region.”
3 Worse, MADERACRE has publicly argued against expanding the reserve for the indigenous people in “isolation.” According to the official minutes of the state’s Multi-Sector Commission meeting held in February 2017 in Madre de Dios’s biggest town, Puerto Maldonado, a MADERACRE representative said that the “current area of the Madre de Dios Territorial Reserve and surrounding ANPs [protected natural areas] are more than sufficient to support indigenous people in isolation.” In other words, one of the carbon project’s proponents has been contributing to blocking the recognition and protection of indigenous peoples’ land, while at the same time entering and logging it for valuable timber species and putting those indigenous peoples’ lives at severe risk.
When I asked Moss if they knew about this, their reply implied that they didn’t: “Please point to the representative and specific comment.”
4 Finally, the methodology for the project is, as I and other journalists have previously exposed, fundamentally flawed. In addition to the absurdly inappropriate “reference region” supposedly intended to enable measurement of the project’s success, there is the obvious, inconvenient fact that the proposed expansion of the reserve for the indigenous people in “isolation” destroys the argument that, without the project, that region would be opened up to the advancing agricultural frontier and deforested. Actually, a good chunk of it could - or rather, should - be in an off-limits area, as FENAMAD first proposed more than 20 years ago.
When I asked Moss if the criticism that the project’s methodology has received didn’t concern them, they replied “we take all criticism seriously and consider criticisms and issues such as potential methodology flaws into our diligence and purchase decision process.” They also said that the credits they bought from the project were from “2013 and 2014 vintages”, that they had sold all of them by last year and therefore don’t “currently have any inventory of Madre de Dios credits”, and that the project has been “peer reviewed” by “Verra VCS protocol, CCB for certain vintages”, and “verified and audited by international, independent companies.” As should be obvious by now to anyone interested in carbon offsets, and as this particular Madre de Dios project illustrates, such certifications, verifications and audits etc simply don’t guarantee that all is well.
Since Moss has now removed Madre de Dios from the list of projects on its website, although information about it can still be found, it seems that the company doesn’t intend to buy credits from it in the future. “At this time, Moss has no plans to purchase carbon credits from the Madre de Dios project,” a spokesperson tells me.
Every other “green crypto firm” - or indeed any kind of firm - should take note.