This article was originally published in Mongabay

Papua New Guinea’s government is working to create new regulations governing voluntary carbon schemes, which are arrangements negotiated directly between developers and resource owners.
While the new laws are developed, the country’s environment ministry has imposed a moratorium on new voluntary carbon deals in the country.
The moratorium, and development of a stronger legal framework, comes after “significant red flags” were raised over a proposed carbon credit deal in the country’s Oro province.

Papua New Guinea’s environment minister has imposed a moratorium on new voluntary carbon credit schemes to give the government time to create a regulatory framework for future and existing deals.

Wera Mori imposed the moratorium on voluntary carbon standards (VCS) with immediate effect on March 2, temporarily banning all new proposals. According to a ministry press statement, the moratorium “will be in place to ensure a proper stock take and audit of existing voluntary projects are accounted for.”

This moratorium comes after industry watchdog group Carbon Market Watch raised “significant red flags” about a 100-year carbon credit deal in Oro province. The group criticized the deal for “widespread absence of key details/evidence” and called on Verra, the international body regulating VCS projects, to reject the proposal.

Papua New Guinea’s environment minister, Wera Mori, imposed a moratorium on voluntary carbon standards (VCS) with immediate effect on March 2, temporarily banning all new proposals. Image via National Parliament of Papua New Guinea.

‘Voluntary’ or ‘results based’

The PNG government identifies two separate of carbon credit deals: voluntary carbon schemes and result-based carbon schemes. Voluntary schemes are negotiated directly with resource owners and developers, without any government intervention. Result-based is the PNG government’s system, which includes government authorities in the negotiations.

The moratorium only impacts voluntary schemes, while the environment ministry establishes the requisite safeguards and regulations.

“If we have those in place, [PNG] can safely say that we can go for carbon business,” Pamela Avusi, interim coordinator of the PNG Environmental Alliance, an NGO, told Mongabay. While the moratorium currently puts a blanket ban on all new and intended voluntary carbon credit programs, the ministry plans to reopen the market to these schemes once regulations have been established.

The implementation and details of these regulations are expected to be circulated to other governmental departments and stakeholders in the coming weeks before being presented in Parliament.

The governor of Oro province, Gary Juffa, who also pushed for the government to take action, called the moratorium “well overdue,” saying: “I’m going to continue to push so that the government doesn’t just pay lip service. We already have what we call ‘carbon cowboys’ in this country, these so-called brokers and experts who are running around claiming to be middlemen. But what they are essentially trying to do is collect a hefty profit and then pass on as little as they can to the custodians and stewards of the forest.

“The government has to be more responsible than to just allow this to happen and not do anything, which has been the case for far too long already,” he added.

*Logging roads in Papua New Guinea’s East New Britain Province. Image by Paul Hilton/Greenpeace.*

In April 2021, a coalition of concerned civil society groups wrote an open letter calling on the government to impose safeguards to regulate PNG’s entire carbon market. Avusi said she’s frustrated with the ministry’s delayed response. “Why are the safeguards still under development? There are already voluntary carbon projects in every part of this country!”

With no safeguards in place, such as regulations requiring free, prior and informed consent (FPIC), a commonly used legality to protect Native landowners from logging interests, the coalition was concerned the market would take advantage of these landowners.

“Carbon financiers were approaching our landowners, approaching resource owners, approaching different stakeholders to do voluntary carbon projects, which has no control over the process,” Avusi said. “The safeguards will build a good regulation for this country before we allow voluntary carbon projects, especially finances, to the carbon business in the country. At the moment, we don’t have this in place — it’s really not going well and it’s really uncontrolled at the moment.”

Carbon credit schemes were lauded at last year’s COP26 climate talks as a key mechanism to reach net-zero emissions targets. However, the market remains unregulated outside Europe; increasingly, concerns are being raised about voluntary schemes around the world. In November, Mongabay exposed how leaders in Malaysia’s state of Sabah signed onto a carbon credit deal covering 2 million hectares (4.9 million acres) without significant consultation with landowners. The scheme was investigated by the state’s attorney general only after extensive reporting done by international media.

Situated on the eastern half of the island of New Guinea, which contains the world’s third-largest tropical rainforest, PNG is immensely attractive to the carbon credit market. Juffa calls these forests, which are home to 7% of the world’s biodiversity, “the breathing apparatus of the world.” Protecting them, he said, is key to the fight against climate change.

PNG’s forests have long been threatened by loggers seeking to extract timber at the expense of both the island’s natural ecology and Native landowners. Juffa said he fears history will repeat itself with the carbon credit market, warning that already “unscrupulous characters who claim to be experts, consultants, brokers … are coming in and taking advantage of the largely illiterate population of Papua New Guinea.”

“[They’re] having them sign over their rights to these forests,” he said, “so that these insidious characters can go out there and lobby with reckless, irresponsible corporate entities who want to continue making profits and just pay as much as they can to get rid of the government oversight demanding that they improve their efforts insofar as consumption of energy, pollution and carbon dioxide is concerned.”

Planet: Critical

PNG suspends new carbon deals, scrambles to…