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AUSTRALIA could waste hundreds of millions of dollars on forest carbon schemes in Third World countries.
This would occur unless more was done to combat corruption, the nation’s peak aid agencies have warned.
A report by the Australian Council for International Development due for release today says without proper safeguards an international forest carbon scheme could worsen climate outcomes, obstruct sustainable development and further impoverish vulnerable communities.
The government has committed about $500 million to climate change adaptation and mitigation in developing countries during 2010-13.
This includes the $273m International Forest Carbon Initiative, under which Australia is funding demonstration projects in Indonesia and Papua New Guinea.
Marc Purcell, executive director of ACFID, said not enough attention had been paid to addressing local corruption, particularly in Papua New Guinea.
“The Australian government has so far been pretty vague on the governance side of things,” Mr Purcell said. “The issue is governance at a provincial level where there are significant risks of illegal logging and questions over the capacity to measure the carbon reserves and the impact on local communities.
“There are real risks for a carbon market in Australia if we don’t get the governance issues right,” Mr Purcell said.
“A worst-case scenario is that schemes become unaccountable and bring no financial benefits to poor communities, with revenues going into the pockets of dodgy companies or dubious officials.”
Mr Purcell said there was a risk that Australian companies could be fooled into thinking they were being green buying offsets on a future carbon market, when a lack of transparency and poor forest management meant that carbon emissions were really leaking from forests into the atmosphere.
“We could be putting a lot of money into measuring the baselines for carbon storage, but if the governance is not strong enough to manage in a sustainable way money will be wasted in the longer term,” Mr Purcell said.
“For rising powers such as Indonesia and Brazil it may be possible to manage at a provincial level, but there is a big question mark over Papua New Guinea,” he said.
The report’s author, Andrew McIintosh, associate director of Australian National University’s climate law and policy unit, said the carbon saving from avoided deforestation would not be 20 per cent of global emissions as had been initially forecast. The figure was more likely to be 12 per cent, due in part to the sharp decline in deforestation in Brazil and Indonesia since 2005.