INTERVIEW: Gabon forest minister details carbon sales strategy
Quantum Commodity Intelligence - We conducted an interview with the Gabonese water and forest minister Lee White at the COP27 conference in Sharm El Sheik, in which he defends the rigour of the methodology used to generate its 90 million sovereign credits, and talks about the country's sales strategy.
The credits will come under direct competition with offsets generated by the voluntary carbon market, prompting some to warn about an impending surplus.
Nature-based carbon prices crashed to a 14-month low as the COP opened, in stark contrast with the situation seen a year ago when prices boomed.
Gabon is known as a high forest low deforestation (HFLD) country thanks to its policies that have kept forests largely protected.
A dozen countries and nearly 40 subnational jurisdictions qualify as HFLD. They hold a quarter of the world's forests.
Lee White, who was born in the UK, shepherded Gabon's forests for decades before being nominated minister in 2019.
The full interview transcript can be found below. It was conducted in French and translated by Quantum into English.
Q: Has anyone committed to buy the carbon credits offered?
A total of 187 million tonnes have been validated on the Lima REDD+ hub in two flavours. Pure REDD+ for 90 million tonnes and high forest low deforestation (HFLD) for 97 million tonnes. They were published on the Lima hub last Friday, it's all new and the credits are not yet in our national registry. Our registry will soon contain those credits and our Sovereign Fund will then sell them.
We have several ongoing discussions with potential buyers, but the credits are not yet on sale. I can't disclose details for now. These types of credits deserve $25-30, some buyers seem interested at this price, but nothing is done. We're waiting for our first sale.
Q: Earlier this year, Gabon joined the Architecture for REDD+ Transactions (ART). How will the HFLD portion be credited?
We're using the Green Climate Fund (GCF) methodology as the UNFCCC conducted the audit and their processes are close. For this reason, we favoured it over other methods such as the Forest Carbon Partnership Facility [World Bank] or ART.
Q: Are these HFLD credits also on sale?
We should be able to sell them but are still considering our options. The issue is that the adjustment contains some assumptions which can be debated. Some of the calculations are a little arbitrary, even if we've tried our best to make them as robust as possible. We haven't created the methodology. But whether we use ART or FCPF or the GCF, we need to find a method for net sequestration. Some buyers are well informed and understand HFLD and will be ready to buy those credits. For less sophisticated buyers or companies that are very afraid of criticism on their net zero goals, you can criticise those credits more easily than the REDD+ ones.
We get a feeling that the voluntary carbon market is keen to lambast us, even before we have started issuing our credits. There's been a lot of debate about HFLD credits... but the same people that criticise us sell credits based on a crystal ball of predicted avoided deforestation trends. If Gabon compares its situation to the average deforestation rate in tropical countries (0.3-0.6% per year), we could claim a whole 1.4 billion mt instead of 90 million.
Because there are a lot of vested interests, I feel the simplest strategy is the best for now and REDD+ credits are easier to explain. Compared to a 2000-2009 baseline, we have reduced our deforestation by 90 million mt. We could go even further than that, the increased net sequestration of our forests is huge.
Q: You are being criticised for poor additionality, lack of buffers and less rigorous audits than in the VCM.
We have five decades of deforestation lower than 0.1% per year thanks to strong political action. On the contrary, we see some African countries that have become net emitters of CO2 from forests. The audit has taken three years, mobilised international experts independently chosen by the UNFCCC. It was 10 times as long as our audit under ANOR for the $150 million received from Norway [for the period 2016-2025. These volumes have been subtracted from the impending issuance]
We've developed new statistical methods, technical guidance and detailed evaluations. On the buffer argument, all our systems are national and we don't have any leakage issues. The fact we're a net absorber, we have captured 1 billion mt of net sequestration in total. For every credit, we have 10 others, this effectively acts like a 90% buffer. I don't think there's a better forest carbon credit on the market than Gabon's.
We are thinking about whether we use these HFLD credits only in Gabon, whether we sell them, or whether we decarbonise our scope 3 oil emissions. We could maybe use them to decarbonise the COP28 in Dubai and offer all delegates some tonnes next year!
Q: Is there potential for Gabon's credits to qualify for Article 6.2 of the Paris agreement?
We certainly hope so. Our intention is REDD+ until the end of 2020 and we'll see after. We still have the years 2019-2020 for which we may undergo the REDD+ audit all over again. From 2021, we'll try to go from avoided deforestation credits to net sequestration credits [which would imply much larger volumes].
Q: How will single projects in Gabon fit within this overall framework?
It's going to be possible for future emissions reductions. Our climate law will be published soon. In it, we authorise single projects to generate credits. The project sits under the national system and must actively reduce emissions or boost sequestration. It needs to be integrated in the national reporting, after which the credits can be labelled. Projects can have credits certified by an independent standard such as Verra or ART, and sell them. They will effectively start in the Gabon registry but will be able to transfer to another registry.
To get to the right scale, for the forest credit market to have a real impact on climate change, we need to go to 10-20 billion mt of emissions reductions per year. Even if the VCM has strong growth of 30% per annum, it remains a drop in the ocean. It results in some revenues for local populations, certainly a lot of consultants and some private companies earn money from it. Gabon has done more on its own than the VCM since its birth.
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