BP exploited Mexican communities in hopes of benefiting from carbon credits: report

  • A report this month in Bloomberg Green said oil and gas company BP was buying carbon credits from Mexican villages below market value, raising questions about the viability of the carbon credit market as a tool for business transition to green practices.
  • BP purchased carbon credits from residents of 59 villages for just $4 per ton of avoided emissions. The actual market price is often more than double.
  • Groups involved in conservation efforts, such as the World Resources Institute and Pronatura, were also involved in the creation of the controversial carbon credit program.

Oil and gas giant BP has been caught up in a controversy involving low payments to Mexican villagers participating in its carbon credit program, designed to improve forest conservation while offsetting the company’s greenhouse gas emissions.

A report published this month in Bloomberg Green said BP bought carbon credits from many Mexican villages at an outrageously low price, raising questions about the viability of the carbon credit market as a tool for businesses to transition to green practices.

“BP has found a carbon bargain in some of Mexico’s poorest regions. In more than a dozen locations identified by Bloomberg Green, the oil company purchased offsets at a huge discount,” the report said, noting that many locals did not know the true market price for the credits they were selling.

A dry forest in Durango, Mexico. (Photo courtesy of Lon&Queta/Flickr)

With matching funding from USAID, BP paid $2.5 million to launch the CO₂munitario program in 2019, which eventually reached 59 rural communities and approximately 200,000 hectares (nearly 500,000 acres) of land. About 1.5 million offsets were purchased for $4 each, according to the report. The scheme was administered by Mexican NGO Pronatura, which said the figure was reached by looking at 2019 carbon tax prices.

In some communities, residents worked for years conserving existing forests and replanting them before receiving their first payment, which ended up amounting to only a week’s worth of work for other conservation programs they had to work with. participated. Some sources in the report called the deal a “tear-tear”. off”, “sham” and “carbon colonialism” that benefits poor rural communities.

Premium carbon credits — each representing one ton of conserved carbon — cost around $7, according to the report. Factoring in the extra $2.30 to support poor communities, what BP paid ended up being less than half market value.

“Four dollars a ton isn’t even enough to cover real sustainable land use change,” Charlie Donovan, a former BP executive, told Bloomberg Green. “I’ve never seen a case where $4 per ton was enough to move the needle.”

Carbon offsets are meant to incentivize local communities to maintain their forests and even reforest areas that would otherwise be devoted to agriculture and cattle ranching. If big companies can undermine the market by paying communities a “starvation,” sources in the report say, it could render many carbon offset programs useless.

A forest in Michoacán, Mexico. (Photo courtesy of Wikimedia)

Carbon credits have been widely criticized for allowing companies to continue polluting, especially when their credit programs fail to deliver results. On the other hand, they give companies a chance to reduce their emissions while figuring out how to fully transition to more sustainable practices in the long term.

“Carbon offset programs encourage land grabbing, human rights abuses, and allow polluting companies, like BP and Chevron, to continue profiting from their pollution while claiming protection of the forest,” he said. Leila Salazar-López, executive director of Amazon Watch, told Mongabay. “What we really need is a real commitment to permanently protect forests, to stop industrial and fossil fuel extraction, to respect the rights of indigenous and forest peoples.”

A BP spokesperson told Bloomberg Green that it aims to create conditions that help landowners generate income through the protection, restoration and sustainable management of forests.

The carbon credit project in Mexico is also linked to conservation groups like the World Resources Institute (WRI), which has helped guide industry standards and best practices for carbon offset programs and acted as a watchdog for climate solutions in the private sector, according to the report. .

But the organization doesn’t have much experience running its own compensation programs, and some critics in the report said it’s a conflict of interest for WRI to oversee industry standards while participating in this same industry.

“We know and recognize that it’s a low price,” Javier Warman, WRI Mexico’s forestry manager, told Bloomberg Green, adding that when the project started, “nothing was moving and there was no request, so for the communities, this decision to go with $4 was better than nothing.

In response to the Bloomberg Green report, BP reportedly agreed to raise pay in some communities. The report did not specify what the new figure will be.

Banner image: A forest in Hidalgo, Mexico. Photo courtesy of wikimedia.

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Agriculture, Agroforestry, Carbon Credits, Carbon Finance, Carbon Market, Carbon Offsets, Climate Change, Community Forestry, Conservation, Deforestation, Environment, Environmental Policy, Forest Carbon, Forests, Governance, Indigenous Peoples

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