Russian Carbon Trading Scheme Rescues Orangutans
The gas giant Gazprom and international agencies are working to save 100,000 hectares of endangered rainforest from clearance for palm oil

Russia’s state-owned energy giant has devised a carbon trading scheme that could help save orangutans in Indonesia. An agreement is close to being reached between Gazprom and a string of international agencies that would protect 100,000 hectares of rainforest on the island of Borneo. The land was close to being sold to loggers, who would have cut down the trees and cleared it for palm oil, releasing millions of tonnes of carbon dioxide into the atmosphere.

The clearance would also have destroyed the habitat of endangered species of birds and mammals — including the Bornean orangutan, whose population has declined by 95% in the past century.

Under Gazprom’s deal, the communities that own the rainforest will be paid to leave the area untouched. International agencies will award the communities of the Rimba Raya area carbon credits for maintaining the forest.

Gazprom will then sell these credits to companies round the world that want to offset their emissions of greenhouse gas.

The scheme, part-funded by the Clinton Foundation, does not meet the criteria to qualify for the United Nations carbon trading system.

Most carbon credits are issued to companies that generate green energy from wind farms or solar panels. Previous schemes that have been based on the idea of preventing pollution have come under scrutiny from campaign groups.

However, Gazprom believes that its new credits could be accepted for trading as part of the UN scheme. It plans to raise the matter later this year at the climate change summit in Cancun, Mexico.

“This is the first time that anyone has been able to agree a methodology to create carbon credits by protecting the rainforest,” said Dan Barry at Gazprom. “Indonesia’s rainforests are a tropical peat swamp. If you turn them into palm oil plantations you not only remove the trees that absorb the world’s toxic gasses but you release the carbon dioxide and methane that are stored in the peat.”

The credits generated from the project could be worth as much as £600m over 30 years, based on current carbon prices.

About 10,000 people live in the area covered by the scheme, meaning it could be worth £60,000 a head. That cash would be funnelled into education and economic development. Gazprom would make its cut by arranging the sale of the credits and creating a market to trade them.

The project has been developed in league with Infinite Earth, a green development company. It has been approved by the Rainforest Alliance and certified by Bureau Veritas, the global certification agency.

Although the credits are not eligible for formal carbon trading schemes, they will still be of value to companies that want to offset carbon emissions beyond their basic commitments. They are likely to trade at a steep discount to current carbon prices until they are deemed eligible for the UN trading scheme.

Birute Galdikas, president of Orangutan Foundation International, which has spent more than 30 years working in the area, said the project would provide “an economically sustainable solution to ongoing orangutan conservation”.

She added: “It couldn’t have come at a better time — we were running out of options.”

Written by: Iain Dey
Published: 22 August 2010