Crisis credit: How the new carbon economy could save Asia's forests
As dire climate threats loom, companies like Mitsui and Shell turn to emissions offsets
PETER GUEST, Nikkei staff writer
December 11, 2019 15:02 JST

TOKYO/PREY LANG, Cambodia -- A rough trail leads from the village of Toal, on the edge of the vast Prey Lang nature reserve in northeastern Cambodia, to the ranger station at Spong in its interior. Traversing the road -- a slalom of shifting white silt, punctuated by slippery riverbeds veined with tree roots -- takes an organ-jarring two hours on the rangers' Honda motorbikes, first through broken forest and farmland, then into denser woodland.

Torch Vichet, the head ranger, rides pillion on the lead bike with a rifle balanced on one hip. Just under halfway to the station, he calls for a halt: A few paces from the track, a dipterocarp tree, nearly a meter in diameter, has been felled. Its base is sheared cleanly, the upper reaches half-buried in the undergrowth. The midsection has been cut into rings and dragged away.

As the patrol stops to examine the scene, Torch Vichet is visibly shocked. Most of the station's rangers had been out of the forest the previous night, attending a colleague's wedding in the provincial capital of Stung Treng. In the few hours they were away, loggers had entered the protected area with chain saws and brazenly harvested the tree.
Rangers patrol Prey Lang Forest, one of Southeast Asia's last remaining evergreen woodlands. (Photo by Peter Guest)

One of Southeast Asia's last remaining evergreen woodlands, Prey Lang's 430,000 hectares sprawl across four Cambodian provinces. The ecosystem has been under threat for decades, but the country's economic lurch forward has accelerated the destruction, as roads reached deeper into the reserve and foreign markets -- mainly China and Vietnam -- opened up, hungry for cash crops and timber.

"People just think this is an economic opportunity, and if you're far from the rangers, the land is cheap," says Naven Hon, a researcher with the U.S. environment organization Conservation International who has worked for years in Prey Lang.

Huge areas of land have been illegally claimed. The rangers tasked with stopping the encroachment often lack equipment, training, transportation -- and, with wages as low as $50 per month, motivation.

But for the rangers at Spong and elsewhere in Stung Treng Province, that is finally changing. Since 2018, their wages have shot up ninefold. They have motorbikes and the fuel to power them, training, GPS devices and new outposts. They can measure the success of their efforts by the moldering piles of confiscated chain saws, snares, nets and rifles that fill the storerooms of their stations and the environment ministry. "It is happening slowly," Torch Vichet says. "But we are winning."
Charred and felled trees along the Mekong River in Cambodia: Should Prey Lang's rangers succeed in slowing its destruction, it will generate carbon credits, which Mitsui will then be able to sell on the Japanese market. (Photo by Peter Guest)

Remarkably, the rangers' equipment upgrades and their jump in pay have mostly been bankrolled by a private company, the giant Japanese trading house Mitsui & Co. The three-year project, overseen by Conservation International, is not philanthropic. It is an investment. If it succeeds in slowing the destruction of Prey Lang, it will generate carbon credits, which Mitsui will then be able to sell on the Japanese market.

Mitsui's funding is the tip of an iceberg. Billions of dollars are poised to flow into carbon offset over the next few years, as growing recognition of a global failure to rein in greenhouse gas emissions, despite the threat of catastrophic climate change, drives a renaissance in the market.

All across Southeast Asia, the Nikkei Asian Review spoke to conservation organizations that have been offered funding from companies ranging from oil majors to automakers, tech companies to theme park operators. All are looking to gain access to carbon credits, whether to meet their own climate change pledges, to absolve themselves in the eyes of their customers, or to get ahead of the emissions regulations that many believe are inevitable.

And forests are the best way to generate credits, fast. "Forest carbon is where the volume is," says Jim Procanik, co-founder of InfiniteEarth, which operates the Rimba Raya Biodiversity Reserve in Indonesia. "If market-based conservation is proven to work, the amount of money that could be unleashed into the market is huge. ... We're seeing people coming to the market looking to lock up millions and millions of tons."

'Bacchanalia'
The carbon market has had a false dawn before. In the toppy pre-financial crisis years of 2007 and 2008, markets and industry became convinced that cap-and-trade rules on carbon emissions were imminent. Analysts -- experts in a market that, until that point, had barely existed -- breathlessly predicted surging prices and hundreds of billions of dollars worth of credits changing hands. Hedge funds and other speculators bought in. Projects, some legitimate, some less so, proliferated...
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