Land grabs meet climate policy

Very interested to see the news today that City of London police have “arrested the director of a Merseyside-based business in connection with an alleged plan to pay Liberian officials $2.5m (£1.7m) in connection with land concessions the company hoped would earn it more than $2bn”.

The thousand-fold disparity between what the British company was planning to pay and what it hoped to earn is obviously astonishing (and that’s before we take into account allegations that the Liberian government would apparently have been liable for making up any shortfall against the project’s anticipated earnings). It all brings back to mind the case of Daewoo’s disastrous attempt to lease one half of Madagascar’s arable land back in March last year – Global Dashboard coverage of that here.

This would appear to be landgrabbing at its worst: the host country gets screwed on the terms of the deal thanks to weak negotiation capacity and/or naked corruption, and poor people get few if any benefits (as well as the risk of getting turfed off community land that they may have had access to for years, but without having the formal ownership rights).

But two things are new and interesting this time round. First, the fact that this land grab is not about staple crops, nor about biofuels, but about carbon credits – specifically, forest credits for avoided deforestation, that can then be used by EU states or other Kyoto signatories to meet their emission targets.

As the FT observes this morning, the global carbon market is now worth $144 billion annually. That’s $20 billion more than total global aid flows. As the carbon market grows, we’ll see more and more problem cases like this – as David and I predicted in our scenarios (pdf) for future climate policy last year. The fact that land grabs are now taking place for carbon sequestration as well as crops and biofuels also underlines just how many different land uses are now competing for the world’s soil – expect this one to run and run.

The other novelty here is the fact that the deal led to an arrest on bribery charges. Land access deals tend to be opaque at the best of times – I’ve been looking at them as part of work I’ve been doing on resource scarcity with the World Bank, and evaluating their implications for governance, conflict risk and poverty reduction is far from easy. It’s often suspected that bribery of host country elites is part of the picture, but extremely hard to prove – and in any case, many investor countries will turn a blind eye, given their strategic interest in improving security of supply on key commodities. So more power to the City of London police’s elbow for sending a signal on this one – it’ll be interesting to see more details of the case as they emerge.

Above all, massive credit to Global Witness, long one of the most impressive NGOs on resource security issues. They’ve been saying for a very long time that the emerging global climate regime on reduced emissions from deforestation and forest degradation (REDD) needs to take far more account of governance and conflict risk issues (see their new report on this, out yesterday). That point has just been vindicated in spades. And on top of that, it was their information that led to yesterday’s arrest. Bravo.