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After it was revealed that the transnational BP (British Petroleum) paid very low wages to farmers to offset CO2 emissions, the Mexican government decided to review this financial mechanism. According to sector specialists, the lack of regulation of the carbon bond market to mitigate CO2 emissions leaves farmers unprotected against malicious companies and intermediaries.
In the small rural Mexican community of Coatlila in central Mexico, a forest conservation project funded by the British oil company BP has brought hope. In 2019, the transnational, through two environmental organizations, proposed to the 133 members of this community to plant trees and take care of them to absorb, in part, the Co2 emissions from oil exploitation.
Conceived within the framework of the Kyoto protocol to protect the climate, the voluntary carbon bond mechanism works as follows: a company obliged to reduce its emissions can offset them by financing a reforestation or agriculture project, for example, and it will absorb 1 ton of carbon. The project generates a carbon credit, that is, a certificate with which the company demonstrates its commitment to the ecological transition.
In exchange for this nature conservation work, the Mexican peasants expected to receive up to 44,000 dollars that would be distributed. But after 2 years of work, they only received 40 dollars per person, which is less than the 30% promised, according to an investigation from Bloomberg..
On the other hand, the contract did allow the oil company BP to compensate for its CO2 emissions at the very cheap price of 4 dollars per ton, instead of the 10 dollars that are usually paid in the market. Questioned about this abusive price paid to Mexican farmers, the president of Mexico, Lopez Obrador, indicated that the carbon offset system with bonds would be reviewed.
The case of BP and Coatlila shows the lack of protection of the poor peasants against the transnationals. An asymmetry that Benjamin Rontard has verified. This French economist studied several carbon offset projects in the rural states of the Mexican states of Chiapas and Oaxaca.
According to the economist, the absence of control to set prices per ton of offset carbon favors this type of abuse against peasant communities.
Mexico is not the only country where the CO2 compensation system through peasant projects has been questioned. In Colombia, the Syrian indigenous activist Mateo Estrada, environmental adviser to the Organization of Indigenous Peoples of Colombia OPIAC denounces the abusive contracts imposed on indigenous communities.
And that was precisely what happened with the Nukak indigenous community of the Colombian Amazon. A vulnerable community whose leader signed a disadvantageous carbon offset contract in their territory for 100 years with a subsidiary of a German company. In Colombia, there are around 80 carbon offset projects through reforestation, forest conservation or coffee planting. But some of the companies don’t always come with good intentions.
Mateo Estrada, who is also part of the team of the future environment minister of Gustavo Petro’s leftist government, advocates a series of reforms to be able to punish companies that propose unfair emission compensation contracts to rural communities.
In other cases, on the other hand, some well-informed communities do manage to negotiate decent remuneration when selling forestry services for CO2 compensation.
Farmers from Chiapas or Oaxaca in southern Mexico have managed to sell carbon offset credits for $9 or $14 a ton through their ICICO cooperative. Rosendo Pérez, specialist in environmental sciences and responsible for international relations of this organization.
Rosendo Pérez believes that the unfair contract signed by the BP oil company with Mexican peasants may affect the credibility of the carbon bond mechanism.
In addition to the risks of inequity to the detriment of peasants and indigenous people, environmental NGOs denounce the very system of offsetting CO2 emissions. In a detailed 48-page report published in 2021, the French anti-poverty NGO Catholic Committee Against Hunger
CCFD estimates that it is highly hypothetical to think that millions of tons of CO2 from oil companies can be offset by planting trees. They also denounce the grabbing of community lands to the detriment of food sovereignty. And remember that the cleanest energy is the one that is not produced.
Interviews:
> Benjamin Rontard, economist and doctor in environmental sciences.
> For Mateo Estrada, environmental advisor to the National Organization of the Indigenous Peoples of the Colombian Amazon (Opiac).
> Questions for Rosendo Pérez Antonio, in charge of international relations at ICICO, which develops CO2 emission compensation projects on behalf of communities in Chiapas and Oaxaca in Mexico.
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