The United Arab Emirates will lease millions of hectares of land across five African nations in the world’s most ambitious carbon offset program.
Under the deal, UAE-backed companies will secure forests the size of the UK as the state looks for offsets to drive its green hydrogen transition.
As reported on Tuesday, the UAE has emerged as a regional “green power”, with the Gulf State spending more than US $160 Billion as part of its commitment to achieve net zero by 2050. Significantly, it will develop the world’s largest carbon credit exchange, with ambitions to become the global centre for carbon financing.
Wood Central understands that the UAE is looking at REDD+ projects, where developing countries receive results-based payments for emission reductions when they reduce deforestation.
Supporters of projects claim that it provides a vital tool to fund the protection of forests, particularly as other sources of climate finance have failed to scale. Opponents argue that it lacks accountability, with Wood Central reporting that some of Australia’s largest companies were tied up in the Kariba REDD+ Forest Project – Zimbabwe’s second-largest REDD+ project.
However, its ambitions have led to fears that the deregulation of the International Carbon Market – expected to occur at COP28 starting today in Dubai – could lead to “carbon colonialism.”
“Carbon colonialism” occurs when foreign entities gain control to offset the emissions from rich, polluting countries, with minimal benefit to local communities.
To achieve its carbon ambitions, a firm backed by the Emirati royal family known as Blue Carbon has been on a spending spree, with Bloomberg reporting that the state-backed company has secured the rights to 10% of Liberia’s landmass to generate carbon credits.
Set up by Sheikh Ahmed Dalmook Al Maktoum, Blue Carnon has already secured agreements with Zimbabwe, with CNN reporting that the Zimbabwean environmental minister signed away 20% of the country, Zambia and Tanzania.
Launched in October 2022, Blue Carbon “works to advance and integrate nature-based solutions into climate change mitigation initiatives to help countries fulfil their net-zero emission commitments,” a statement said.
Sheikh Ahmed, Chairman of Blue Carbon, said, “The core of our work is to enter into bilateral agreements with governments and private entities across the globe so that, together, we can boost investments in green and blue carbon projects today to meet tomorrow’s demand.”
Blue Carbon alleges it focuses “on investments in coastal ecosystems such as mangroves, which can store 3 to 5 times more carbon than terrestrial forests.”
However, forest carbon accounting and governance experts are concerned that the scramble for carbon credits could lead to “land grabs and a risk of land dispossession,” with Kate Dooley from the University of Melbourne concerned that “richer countries want to lock up land for climate mitigation.”
Responding to an email from Bloomberg, Blue Carbon said its rights would be “limited to project implementation,” and the company wouldn’t own the land. The company also said it would respect the consent of local communities and that the project land area is expected to narrow after feasibility and eligibility assessments.
However, the makeup of the new UN-operated international carbon credits market has led to discussions on what should and should not be included in the methodologies.
Yesterday, Wood Central reported that one of the significant challenges with the new International Carbon Credit Market is whether “emission avoidance” should be included in the new methodology. As a result, the decision to drill for oil or protect a forest from harvesting could be eligible for credits in the new market. Whether backers of carbon projects could have undue influence over these decisions is unknown.
According to the United Nations Development Programme, Africa holds about a sixth of the world’s forests, and more than 70% of its population relies on forests for their livelihood. The continent’s potential for abating emissions, mainly from forests, makes it an attractive target for foreign investors and entities seeking ways to compensate for their emissions.
African governments are now in a tricky position, eager to take advantage of overseas interests without sacrificing their environmental goals or short-changing local communities.
In September, Kenyan President William Ruto revealed that carbon credits would be his country’s “next significant export.” It comes as the East African nation, according to Bloomberg, is struggling to secure funds to repay $2 billion of Eurobonds.
