by  on 18 August 2021

Key Points

  • The Malagasy government’s decision to ban the sale of carbon credits as it reworks its REDD+ strategy has left all existing REDD+ projects in a limbo.
  • The island nation only has a handful of projects, all helmed by foreign NGOs, which take advantage of the U.N.’s reducing emissions from deforestation and forest degradation (REDD+) program to raise money by selling carbon credits.
  • Madagascar’s environment minister singled out an initiative by U.K.-based nonprofit Blue Ventures, criticizing it for striking a deal promising too little: $27,000 per year for 10 villages. The NGO disputes this appraisal.
  • The government’s move to nationalize carbon ownership comes against the backdrop of familiar concerns about REDD+, in particular: how much do communities benefit from keeping forests standing?

REDD+ is an idea that has launched a thousand projects. It’s essentially a way to monetize forests’ ability to store carbon and put that money in the hands of communities who can protect them.

Blue Ventures, a U.K.-based NGO, saw the U.N.’s reducing emissions from deforestation and forest degradation (REDD+) program as an opportunity to finance conservation in Madagascar. It was an attractive proposition, tackling two of the African nation’s most debilitating problems — forest destruction and poverty — at once.

Along with a Malagasy association, the nonprofit launched the Tahiry Honko project in 2018 to sell carbon credits generated by mangroves. But three years on, the project has yet to sell a single carbon credit.

Madagascar is a potentially excellent site for REDD+, but only a handful of projects spearheaded by foreign NGOs have taken root here. The government’s recent move to centralize control over carbon credits has created confusion over the fate of these projects and the future of REDD+ in Madagascar. 

In the gray

The Malagasy government placed a moratorium on the sale of carbon credits three years ago.  Under President Andry Rajoelina, the country set out to nationalize its carbon rights. As a result, all its REDD+ initiatives, including Blue Ventures’ Tahiry Honko, were put on hold.

The country’s environment minister singled out the project for criticism for selling the Malagasy people and the government short. The 20-year project was initially supposed to pull in $27,000 a year at around $20 per credit. Half the funds were set aside for the 10 villages that are part of the program. Blue Ventures denies the promised funds are too little.

Meanwhile, the country has signed an agreement with the World Bank to sell 10 million carbon credits generated from protecting its rainforests, at $5 per credit, the standard rate for World Bank-backed programs.

But there is more than money at stake in this recasting of Madagascar’s REDD+ strategy. A draft decree, yet to become law, would give the Malagasy government exclusive rights to sign agreements with carbon credit buyers and distribute funds. The country is not alone in nationalizing its carbon rights; others, such as New Zealand, have also adopted this approach.

In pursuing nationalization, Madagascar has shut out the NGOs that dominate conservation work in the country from striking their own deals with private players.

The confusion around Madagascar’s policy arose against the backdrop of familiar questions that bedevil all REDD+ programs: Who owns the carbon sequestered by trees? What is a fair price for this carbon? And how are the benefits shared?

Blue carbon

Tahiry Honko, which means “preserving mangroves” in the local Vezo dialect, is a small but special kind of REDD+ project. Most carbon credits today are produced by preserving inland forests. When carbon storage happens in water-based ecosystems, like mangroves or salt marshes, it’s known as “blue carbon.”

Mangrove trees grow next to salt water that is inhospitable to other vegetation. Their stilt-like roots submerged in seawater create a unique underwater habitat, a nursery for fish and a shelter for other marine species like crabs.

These trees are also adept at removing carbon from the atmosphere. Mangroves can sequester four times more carbon than tropical rainforests, one estimate suggests. Carbon-rich soils are nourished by foliage that gets trapped in an underwater mesh of roots. Seawater slows their decomposition, locking in more carbon for longer periods.

Madagascar hosts 2% of the planet’s mangroves, but they’re vanishing fast. In 1995, its mangrove cover stood at 310,452 hectares (767,144 acres), but by 2018 a quarter of it had been wiped out. In the Bay of Assassins on Madagascar’s western coast, the site of the Tahiry Honko project, 10% of the water-soaked woodland disappeared between 2002 and 2014.

Homes cemented by mangroves and seashells

The ominously named Bay of Assassins is located inside the Velondriake locally managed marine area (LMMA) that Blue Ventures helped create. It is co-managed by the NGO and the Velondriake Association, a group of Vezo fisherfolk.

For the Vezo people here, mangroves are not merely carbon vaults. They use mangrove wood to make their pirogues for fishing, and build and buttress their homes with the same timber. The coastal forests supply firewood for cooking. Wood is a key source of fuel in much of Madagascar, where only one in four people is connected to the electricity grid.

These communities may have missed the boat on fossil fuel-dependent development, but through projects like Tahiry Honko they have been propelled to the forefront of the fight against climate change. Meanwhile, timber is becoming more popular in some developed countries, most notably in Europe, where proponents tout it as a cleaner energy source than fossil fuels.

In recent years, money from a swell in export-oriented trade in sea cucumbers, seaweed and octopus has raised incomes and aspirations in the Velondriake region. A home that can withstand the cyclones that menace these coastal corridors is high on the wish list.

Transporting cement from the closest big city, Toliara, is expensive, says Michel Strogoff, who hails from a village inside the LMMA. Strogoff used to work with Blue Ventures and has contributed to Mongabay’s reporting in the past. “What the people do, my family too, is use local products,” he said. The most abundant local resources in his native village are mangroves and seashells.

People use mangrove wood to fire up small kilns that reduce hundreds of shells to a lime called sokay. “If you make a good income, you want to do something good for you and your family,” Strogoff said. “If you make your house with sokay it can last 10 or 20 years.”

Communities left in the lurch

As part of the Tahiry Honko project, 10 villages were tasked with protecting about 1,200 hectares (3,000 acres) of mangroves. Blue Ventures estimated that these mangroves would soak up 1,300 tons of carbon and therefore generate 1,300 carbon credits each year.

The NGO agreed to sell the credits to an undisclosed buyer for $27,000 every year for the first three years, and now hopes to secure buyers for the remaining 17-year project term.

For some community members, not being able to cut the mangroves has meant buying fuelwood on the market, Velondriake Association president Richard Badouraly told Mongabay. Not everybody is happy, he said. Some would prefer to continue using the trees in the traditional way.

The uncertainty over funds promised by Blue Ventures under the Tahiry Honko project could explain some of the discontent Badouraly is grappling with. Leah Glass, the NGO’s technical advisor for mangroves and blue carbon, said Blue Ventures was giving the communities and association advance payments while waiting for the new policy to be finalized.

Because of the Malagasy government’s refusal to recognize the agreement with the carbon credit buyer, Badouraly says he fears there will be no money coming in the future.

A similar situation has arisen at the REDD+ project developed by the Wildlife Conservation Society in Makira National Park. That project, too, hasn’t sold any credits since 2018.

A community meeting in the Velondriake LMMA. Image courtesy of Leica/ Blue-Ventures.

A piece of the carbon pie

Even if it were possible to revive the Tahiry Honko project, the villagers would not see all of the money.

Of the $27,000, 23% is set aside for the local management association to carry out activities like replanting mangroves and conducting forest patrols that directly benefit the project. Another 5% is set aside as a reserve fund in case the protected mangroves are chopped down.

Blue Ventures, which is providing technical assistance with monitoring and auditing work, says it keeps none of the money. There is a 22% cut for the Malagasy government.

The 10 villages, home to about 3,000 people, would receive about $13,000. At current prices, this sum wouldn’t cover the cost of two months’ ration of rice, a staple of the Malagasy diet, for 3,000 adults. The money, according to Badouraly, is not earmarked for buying food, but rather for educating children in the villages, and for infrastructure work.

The devil in the details

Funding is one of the biggest hurdles to community management of conservation in Madagascar, even though empowering local bodies has been a central tenet of the country’s environmental laws for decades. Most conservation activities are supported by international funders. If selling carbon could fetch enough funds, it would be a rare independent source of revenue.

Communities don’t necessarily have to increase green cover for REDD+ projects to produce credits. In places like Madagascar, which lose forests at alarming rates, it is enough to show that the deforestation rate has slowed at the project site. It is equally important to demonstrate that safeguarding those forests has not fueled forest loss in nearby areas.

While REDD+ seems like a simple, elegant idea on paper, in practice it is not. Monitoring carbon flows, submitting cumbersome reports on avoided deforestation, and finding buyers in richer countries requires the kind of technical know-how and resources that most local associations don’t have.

There are four REDD+ projects in Madagascar centered on rainforests, all of which are supported by foreign NGOs.

The strained relationship between the Malagasy state and NGOs that co-manage most of the country’s protected forests hasn’t helped matters. At a meeting between protected area managers and ministry officials in June last year, environment minister Vahinala Baomiavotse Raharinirina criticized Blue Ventures for locking the country into a long-term commitment for small gains, according to three people who attended it. Raharinirina did not respond to Mongabay’s requests for a comment.

Despite the difficult relationship, the presence of a well-established NGO like Blue Ventures can be an asset in attracting foreign carbon credit buyers and dealing with the volatile global carbon market.

A forest fire near Masoala National Park in northeastern Madagascar. Image by Rhett A. Butler/Mongabay.

A niche market

When limits are placed on total emissions from a polluting entity like a government, an industry, or a company, a carbon market emerges. Polluters who breach those limits must buy carbon credits, a promise that someone else is reducing emissions to make up for the excess.

Some players, like governments and big industries, are bound by international agreements to reduce emissions. Others, like private companies, choose to reduce their carbon footprint. It could be a response to public pressure or a way to meet employee expectations.

The NGO-promoted REDD+ projects in Madagascar mostly sell credits on this latter voluntary market. And for the moment, blue carbon credits are only sold to voluntary buyers. In some ways the blue carbon market is not really a market but more of a funding stream, where deals are struck based on mutual agreement.

As a result prices of carbon credits traded on the involuntary market vary widely from anywhere under a dollar to $60 depending on what buyers are willing to pay.

According to a report, voluntary buyers are more likely to put their money in projects helmed by private organizations rather than in government-led programs. Cutting NGOs and local organizations off from the voluntary market could restrict access to private funding.

Blue Ventures spearheaded the search for buyers and negotiated prices for Tahiry Honko. “Blue Ventures’ purpose is to maximize revenue for the communities,” Glass told Mongabay. “We are pushing buyers really hard to get a fair price for the carbon.”

Missing the soil for the trees

Protecting mangroves is a win-win as far as climate change is concerned. They protect against climate change effects like sea level rise and store carbon, which helps curb temperature rise. However, the way they do so differs from terrestrial forests.

With 1,300 credits, Tahiry Honko is a small project. One of the reasons it is small is that mangrove trees on Madagascar’s southwest coast, a dry, arid region, are small. The trees themselves do not store a lot of carbon.

There’s more carbon stored per hectare in mangroves than in a terrestrial forest, said Scott Settelmyer, co-founder of TerraCarbon, a U.S.-based consultancy that is not involved with Tahiry Honko.  Most of this carbon is below ground in the case of mangroves. “If soil carbon was taken into account there would be more credits,” Settelmyer said of the project. “If you ignore that, that’s missing a lot.”

Glass at Blue Ventures said that the scientific research needed to include soil carbon values in Tahiry Honko is still a “work in progress.”

Invalid agreement, delayed decree

 Credits and their prices are not the only bone of contention. The mangroves are on state land, as is much of Madagascar’s forest cover. Blue Ventures negotiated an agreement with a buyer even though the Malagasy state is the legal owner of the land.

The draft rules require the government to be the signatory and to be the recipient of the funds from the sale of carbon credits. Blue Ventures’ agreement with the buyer no longer holds, which has prevented it from selling the credits.

According to Glass, the delay in installing a legal framework for REDD+ is harming Madagascar. It is an important country for blue carbon, in theory,” she said. “But this policy block is currently making it impossible for additional projects to be developed and for carbon projects to function.”

The new REDD+ decree is expected to be finalized by the end of the year.

This has not stopped the Malagasy government from signing its own agreement with the World Bank under the Forest Carbon Partnership Facility (FCPF). The country has agreed to reduce 10 million tons of carbon emissions from its rainforest-rich eastern coast. For this it will receive up to $50 million between 2020 and 2024.

For governments it makes sense to retain control over carbon rights because, as parties to the Paris Agreement, they must meet national commitments to reduce emissions. Nearly all of the carbon credits generated under the FCPF program will count toward Madagascar’s targets. However, with programs like Tahiry Honko, the credits count toward the emission reduction goals of private entities that buy those credits.

To even be able to receive funding from the FCPF, the Malagasy government needs to clarify who owns the carbon rights. “The approval of the REDD+ Decree will enable Madagascar to demonstrate its ownership over Emission Reductions and its ability to transfer them to the FCPF,” the World Bank said in a statement issued in response to Mongabay’s questions.

The reductions will then have to be verified before funds are released.

We can only afford to give 10%’

Both the environment minister and a World Bank spokesperson insist that supporting communities is key to the deal. “The ministry will ensure fairness in the redistribution of revenues and make it a tool in the fight against precariousness while reducing pressure on the island’s unique biodiversity,” Raharinirina said in February when the World Bank agreement was announced.

Badouraly at the Velondriake Association told Mongabay that letting the state keep more than 20% of the revenues was too steep a price to pay. “The Malagasy state is far from us, they are not here in the villages,” he said. “We want the money so we can use it for our development.”

“We can only afford to give 10% to the government,” he said.

Lalao Aigrette, the program manager for Blue Ventures’ blue forests initiative, agrees that neither the old REDD+ decree nor the new draft fully compensate communities. For protecting the planet from disastrous global warming and perhaps forgoing sturdier homes for their own families, they deserve more than half of the carbon money, she said.

(Banner Image of mangroves near Toliara on Madagascar’s western coast. Image by Rhett A. Butler/ Mongabay)


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