The Walt Disney Company has purchased $2.6 million in carbon credits in the forests of Mondulkuri province – marking the largest carbon credit sale to date in Cambodia and breathing life into a carbon-trading program many had written off as all but dead.
In collaboration with the Cambodian government and brokered by the Wildlife Conservation Society (WCS), the US-based media giant will purchase 360,000 tonnes worth of carbon emissions in Keo Seima Wildlife Sanctuary in a bid to offset its global carbon footprint.
The funds from the sale will be earmarked to help the government protect the sanctuary from illegal logging and the encroachment of “large-scale plantation crops such as rubber”, a press release from WCS stated.
The deal comes despite the government having long been criticized for issuing economic land concessions for rubber plantations that in turn uprooted old-growth forests.
Yang Donal, a representative for WCS, confirmed that this is the largest sale so far under the UN-backed Reducing Emissions from Deforestation and Degradation program, aka REDD+.
“This purchase is a really good way to preserve the forests in our country,” he said, adding that the two-year deal would kick off in 2017.
Based on WCS estimates, Keo Seima Wildlife Sanctuary, which encompasses almost 300,000 hectares, has nearly 1 million metric tonnes of carbon credits up for grabs. Donal said that while Disney decided to purchase only a percentage of the credits available, the company could renew or expand its purchase once the initial contract ends in 2019.
The wildlife sanctuary is home to more than 60 animal and plant species that that have been placed on the global Red List, a criteria given by the World Conservation Union that cites the threat of extinction.
“If we preserve the forest and prevent it from being logged, the [forest will] be able to continue to collect carbon. If the forest is logged, it will lose everything,” said Donal, adding that the forest has long been plagued by illegal logging and deforestation activities.
Sao Sopheap, spokesman for the Ministry of Environment, said that 90 per cent of the $2.6 million would go towards “ground” activities to stop deforestation and encourage sustainable practices.
“This is a model for carbon credits and forest preservation that we hope we can replicate across Cambodia,” he said, adding that the ministry often lacked sustainable financing to preserve protected areas.
“We are hopeful that external support will allow us to mobilize our sustainable capabilities and actually lead to restoration of forests that have already been degraded,” he said.
Often touted in developing countries with tropical vegetation, carbon credits are generated through emission-reducing schemes that can be purchased to offset a company’s allowable emissions where pollution caps are applied; or when a company, like Disney, has adopted internal carbon tax policies to reduce pollution and promote sustainable investments.
Additionally, carbon credits can be purchased on a “voluntary market” fueled by companies looking to mitigate their environmental footprint.
While the carbon credit scheme has been around for more than six years, it has remained a tough sell for investors. In 2009, environmental sustainability NGO Pact Cambodia tried to enter the carbon market with a proposed purchase of $1.2 million worth of credits in the forests of Oddar Meanchey.
The project, which was meant to sell carbon credits to third-party buyers in exchange for reduced logging, was abandoned in 2013 when the agreement to stop deforestation failed to materialise and the government was unable to secure buyers, leaving the REDD+ program in doubt.
However, Ross Sinclair, country program manager for WCS, believes that Disney’s investment marks a renewed interest in the scheme.
“This is a huge deal for Cambodia. It puts this country front and centre in global efforts for REDD+,” he said adding that it shows that the Kingdom is finally ready for “performance-based” payments that will allow the country to access funding earmarked under the UN Climate Agreement, known as COP21, reached late last year.
While he admitted that REDD+ and the carbon credit market in general is currently not a viable commercial investment, companies like Disney are not looking to gain a profit. “Looking purely at revenue, in many cases, the cutting of a forest is more profitable than REDD+,” he said.
However, when all environmental concerns are taken into account, it provides the path towards mitigating future climate change.
“As the world moves towards a regulated climate deal, the value of ‘standing carbon’ in places like Seima will only grow,” he said.