TimberWest and nature conservancy received $10 million in carbon credits
TimberWest received $5.6 million from cash-strapped school districts, hospitals and municipal organizations under the Pacific Carbon Trust (PCT) to save old-growth timber that it had already decided not to log anyway, according to Freedom of Information (FOI) documents obtained by Business in Vancouver.
The Nature Conservancy of Canada, meanwhile, received $4.5 million in PCT carbon credits – again for preserving trees that were not likely to be logged anyway. And International Forest Products (TSX:IFP) received $613,890 for a fuel-switch project that appears to have been completed for economic, not environmental, reasons.
According to PCT critics, all of the projects fail PCT's "additionality" test, which is intended to fund only those carbon-reduction projects that would have been shelved because of financial or technical barriers.
The funds the projects received were part of $16.3 million the Pacific Carbon Trust paid out between April 2008 and December 2011 to 11 projects in carbon credits, according to information obtained by BIV through an FOI request made more than a year ago.
And according to other documents obtained by BIV, the full amount paid between 2009 and 2012 is $25 million, including $2.7 million to the Great Bear rainforest initiative.
The payments – which have not previously been disclosed – provide ammunition for critics who say the PCT is deeply flawed and ineffective in fulfilling its mandate of subsidizing projects that reduce greenhouse gas emissions.
The provincial government created the PCT in 2008 as part of its climate action policies.
Public organizations, like school districts, are forced to pay carbon offsets if they don't meet government-mandated carbon reduction targets. The money is used to buy carbon credits from companies and organizations to help fund carbon-emission reduction projects.
As of January 2012, the PCT had collected $20.8 million from government, Crown corporations, school districts, post-secondary institutions and health authorities. School districts alone paid $4.2 million.
The Surrey School Board paid roughly $1 million over two years because it was unable to meet its carbon reduction targets – something the school board found impossible to do, because it was growing at 300 students per month and placing them in energy inefficient portables.
Responding to those bad optics, the B.C. government established a plan to give back some of the money school boards paid to help them fund energy-efficiency initiatives.
"We give a Crown corporation a monopoly which ends up distorting the marketplace and works to the incredible advantage of some of these companies," said Ben Parfitt, a resource policy analyst for Canadian Centre for Policy Alternatives and strong critic of the PCT.
Parfitt and other critics like Bob Simpson, Independent MLA for Cariboo North, question the validity of some, if not all, of the projects the PCT has funded.
Documents show a number of the projects were already being considered or even in the works prior to the PCT's existence, which raises the question of how they met the additionality test.
"I would argue that every one of these entities and projects that you see public money going to was either already done, or already committed to, or business as usual," Simpson said. •
Carbon initiative delivered no net benefit, say critics
According to a 2009 annual report, TimberWest – then a publicly traded company – had reported to shareholders that it had "old growth timber that is not economic to harvest anytime over the next five years at projected prices."
The company therefore decided to apply for carbon credits for its Strathcona Ecosystem Conservation Program Project on Vancouver Island.
But Ben Parfitt, a Canadian Centre for Policy Alternative resource policy analyst, said the company did so while planning to ramp up logging elsewhere on its privately held timberlands.
"How can a forest company claim to be able to market a credit for protecting forests when its overall rates of logging are going to go up? There's absolutely no net benefit."
John Mitchell, vice-president of evaluations and alternative investments for TimberWest, said third-party validators approved the project and will ensure there is no "leakage" – when carbon reductions in one area are wiped out by increases elsewhere.
"If we generate and sell offsets throughout that 25-year period, each annual verification will test the leakage piece of the project," Mitchell said. "If all we did was conserve timber on one part of our land base and double the harvest on another part of it, it truly would have no net benefit."
Parfitt also questions the Nature Conservancy of Canada receiving $4.5 million for its Darkwoods project near Nelson.
Because land conservancy groups, by their nature, preserve forests, Parfitt questions how the conservation effort meets the PCT's additionality requirements. "This is an organization that is committed to preserving forests. There's nothing new that this conservation organization is doing other than what it's always done."