{"id":50071,"date":"2024-03-14T14:11:36","date_gmt":"2024-03-14T14:11:36","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=50071"},"modified":"2024-03-15T14:53:03","modified_gmt":"2024-03-15T14:53:03","slug":"paraguay-singapore-deal-beset-by-lobbying-and-lax-rules","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2024\/03\/14\/paraguay-singapore-deal-beset-by-lobbying-and-lax-rules\/","title":{"rendered":"Paraguay&#8217;s carbon deal with Singapore beset by lobbying, lax rules"},"content":{"rendered":"<p><strong>At the Cop28 climate summit in December, Santiago Pe\u00f1a, president of the densely forested South American nation of Paraguay, struck a <a href=\"https:\/\/www.nccs.gov.sg\/media\/press-releases\/singapore-and-paraguay-substantively-conclude-negotations-on-ia\/\">deal<\/a> with Singapore&#8217;s Senior Minister Teo Chee Hean to directly supply the Asian country with carbon offsets to help reduce its emissions.<\/strong><\/p>\n<p>Both governments announced several carbon offsetting deals at Cop28 in Dubai under the umbrella of the Paris Agreement\u2019s bilateral carbon trading principles.<\/p>\n<p>But the rules for how to implement them have yet to be agreed, as negotiations at Cop28 <a href=\"https:\/\/www.climatechangenews.com\/2023\/12\/13\/carbon-credits-talks-collapse-at-cop28-over-integrity-concerns\/\">collapsed<\/a> over discussions on how to ensure the integrity of carbon credits. Still, that hasn&#8217;t stopped deals such as Paraguay\u2019s moving forward without clear guidelines.<\/p>\n<p>Climate experts and organisations fear the lax rules approved by the Paraguayan government &#8211; as well as its proximity to industry players &#8211; risk the new UN mechanism repeating <a href=\"https:\/\/www.climatechangenews.com\/2023\/10\/05\/exposed-carbon-offsets-linked-to-high-forest-loss-still-on-sale\/\">problems<\/a> that have beset the voluntary carbon market, where companies have frequently ended up <a href=\"https:\/\/www.climatechangenews.com\/2023\/08\/25\/cookstove-offsets-carbon-emissions-credits-india-enking\/\">buying junk offsets<\/a>.<\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/03\/07\/fossil-fuel-firms-seek-un-carbon-market-cash-for-old-gas-plants\/\" target=\"_blank\" rel=\"noopener\">Fossil fuel firms seek UN carbon market cash for old gas plants<\/a><\/p><\/blockquote>\n<p>Despite such concerns, Paraguay has made carbon markets a top priority, even rushing to pass a new law in less than one month &#8211; between September and October 2023. The law created a national registry and a set of rules for every carbon project in the country.<\/p>\n<p>It \u201cwill contribute enormously to the growth and development of the country&#8221;, said Minister of Environment Rolando de Barros Barreto, in an official statement the day the law was signed by President Pe\u00f1a.<\/p>\n<p>De Barros Barreto was heavily involved in lobbying for the legislation to pass through Congress without modifications. &#8220;We are one of the few countries that have a tool like this,&#8221; he added in the statement.<\/p>\n<div id=\"attachment_50185\" style=\"width: 810px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-50185\" class=\"size-full wp-image-50185\" src=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132113\/SG-pollution.jpg\" alt=\"\" width=\"800\" height=\"502\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132113\/SG-pollution.jpg 800w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132113\/SG-pollution-268x168.jpg 268w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132113\/SG-pollution-537x337.jpg 537w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132113\/SG-pollution-768x482.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><p id=\"caption-attachment-50185\" class=\"wp-caption-text\">A man fishes near chimneys giving off emissions in an industrial area of Singapore, January 5, 2016. (Photo\/Reuters\/Tim Wimborne<\/p><\/div>\n<h3><strong>Carbon shopping<\/strong><\/h3>\n<p>Pressed by a hike in Singapore&#8217;s domestic carbon tax &#8211; which will rise from about $3 per tonne to <a href=\"https:\/\/www.nccs.gov.sg\/singapores-climate-action\/mitigation-efforts\/carbontax\/\">$18<\/a> in 2024 &#8211; its government went shopping for carbon offsets at Cop28 to offer big emitters back home. It held talks with <a href=\"https:\/\/www.straitstimes.com\/singapore\/s-pore-and-paraguay-close-to-signing-agreement-allowing-bilateral-carbon-credit-trade\">Bhutan<\/a>, <a href=\"https:\/\/www.businesstimes.com.sg\/esg\/singapore-scores-first-carbon-credit-transfer-deal-cop28\">Papua New Guinea<\/a> and Paraguay as potential suppliers.<\/p>\n<p>Paraguay &#8211; which, according to industry minister Javier Gim\u00e9nez Garc\u00eda <span class=\"x1lliihq x1plvlek xryxfnj x1n2onr6 x193iq5w xeuugli x1fj9vlw x13faqbe x1vvkbs x1s928wv xhkezso x1gmr53x x1cpjm7i x1fgarty x1943h6x x1i0vuye xvs91rp x1s688f x5n08af x10wh9bi x1wdrske x8viiok x18hxmgj\" dir=\"auto\">de Z\u00fa\u00f1iga<\/span>, was seeking to position itself as the \u201clung market\u201d of the world &#8211; landed an ideal customer.<\/p>\n<p>Both countries agreed to create a bilateral commission to pick carbon-cutting projects in Paraguay. Companies based in Singapore could purchase credits from these projects in exchange for a discount on the new carbon tax rates. No official document on the deal has yet been disclosed.<\/p>\n<p>\u201cWhat was agreed is to create a road connecting the two countries to manage the transfer of carbon credits,\u201d Gim\u00e9nez Garc\u00eda <span class=\"x1lliihq x1plvlek xryxfnj x1n2onr6 x193iq5w xeuugli x1fj9vlw x13faqbe x1vvkbs x1s928wv xhkezso x1gmr53x x1cpjm7i x1fgarty x1943h6x x1i0vuye xvs91rp x1s688f x5n08af x10wh9bi x1wdrske x8viiok x18hxmgj\" dir=\"auto\">de Z\u00fa\u00f1iga<\/span> said in a statement published jointly by the two countries to mark the deal.<\/p>\n<p>On the same day, President Pe\u00f1a also signed a memorandum of understanding with Cop28 host United Arab Emirates, which had embarked on its own <a href=\"https:\/\/www.climatechangenews.com\/2023\/11\/23\/meet-the-italian-fugitive-advising-emirati-start-up-blue-carbon\/\">controversial spending spree<\/a> for carbon offsets, mainly in the form of agreements with African countries.<\/p>\n<div id=\"attachment_50183\" style=\"width: 810px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-50183\" class=\"size-full wp-image-50183\" src=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13130921\/At-COP28-in-Dubai-Paraguays-Minister-Rolando-de-Barros-Barreto-and-the-UAEs-Mariam-Almheiri-sign-a-Memorandum-of-Understanding-on-carbon-credits.-Credit-Paraguayan-Presidency-1.jpg\" alt=\"\" width=\"800\" height=\"601\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13130921\/At-COP28-in-Dubai-Paraguays-Minister-Rolando-de-Barros-Barreto-and-the-UAEs-Mariam-Almheiri-sign-a-Memorandum-of-Understanding-on-carbon-credits.-Credit-Paraguayan-Presidency-1.jpg 800w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13130921\/At-COP28-in-Dubai-Paraguays-Minister-Rolando-de-Barros-Barreto-and-the-UAEs-Mariam-Almheiri-sign-a-Memorandum-of-Understanding-on-carbon-credits.-Credit-Paraguayan-Presidency-1-224x168.jpg 224w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13130921\/At-COP28-in-Dubai-Paraguays-Minister-Rolando-de-Barros-Barreto-and-the-UAEs-Mariam-Almheiri-sign-a-Memorandum-of-Understanding-on-carbon-credits.-Credit-Paraguayan-Presidency-1-449x337.jpg 449w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13130921\/At-COP28-in-Dubai-Paraguays-Minister-Rolando-de-Barros-Barreto-and-the-UAEs-Mariam-Almheiri-sign-a-Memorandum-of-Understanding-on-carbon-credits.-Credit-Paraguayan-Presidency-1-768x577.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><p id=\"caption-attachment-50183\" class=\"wp-caption-text\"><em>At COP28 in Dubai, Paraguay\u2019s Minister Rolando de Barros Barreto and the UAE\u2019s Mariam Almheiri sign a Memorandum of Understanding on carbon credits. (Photo: Paraguayan Presidency)<\/em><\/p><\/div>\n<h3><strong>Rushed rules<\/strong><\/h3>\n<p>In order to arrive at Cop28 as a reliable supplier of carbon offsets, the Paraguayan government rushed its law regulating carbon markets through both chambers of Congress in less than a month.<\/p>\n<p>The initiative was marketed abroad by President Pe\u00f1a as <a href=\"https:\/\/www.facebook.com\/watch\/?v=323685106810977\">\u201cone of the most advanced laws in the world\u201d<\/a> and as a way to attract foreign investment. But it also has been heavily criticised by opposition lawmakers, academics, Indigenous peoples and environmental groups.<\/p>\n<p>The new law passed without including safeguards to guarantee environmental and human rights based on <a href=\"https:\/\/redd.unfccc.int\/media\/4863_5_segundo_informe_salvaguardas_soi_redd_para_web.pdf\">an international standard<\/a> that seeks \u201cto mitigate the negative impacts of projects and, above all, to defend the rights of the people\u201d, explained Mirta Pereira, a Paraguayan lawyer and advisor for the Federation for the Self-determination of Indigenous Peoples (FAPI).<\/p>\n<p>Alberto N\u00fa\u00f1ez, an activist from the Youth Network for Climate Action Paraguay, said in a public hearing prior to the bill\u2019s approval that \u201cwithout explicit human rights safeguards, this (law) will have a climate-friendly name but will be destructive\u201d.<\/p>\n<p>Opposition senators said it had been influenced by peddling to favour law firms that advise on carbon projects.<\/p>\n<p>A proposal to create mechanisms for handling complaints, information requests and potential land conflicts was also rejected by Pe\u00f1a\u2019s ruling\u00a0bloc of lawmakers.<\/p>\n<h3>Protected forests<\/h3>\n<p>Another issue is that the new law allows for carbon projects to be set up within national parks and forest reserves, in an effort to finance the country\u2019s protected areas, experts said.<\/p>\n<p>But the forests in the concession areas would have already been protected without funding from the offsetting projects, which means their credits lack &#8220;additionality&#8221; in terms of emissions reductions, according to <a href=\"https:\/\/icvcm.org\/the-core-carbon-principles\/\">the standards recommended<\/a> by the Integrity Council for the Voluntary Carbon Market (ICVCM), an independent body that seeks to raise the quality of carbon credits for trading.<\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/01\/18\/junk-offset-sellers-push-to-enter-new-un-carbon-market\/\" target=\"_blank\" rel=\"noopener\">Junk offset sellers push to enter new UN carbon market<\/a><\/p><\/blockquote>\n<p>Inigo Wyburd, a researcher at non-profit organisation Carbon Market Watch, said \u201cadditionality is necessary&#8221; for Paraguay&#8217;s market to be credible. &#8220;It is important that it is reflected in the text of the law. Areas that are not at risk of being deforested should not be eligible to receive carbon credits,\u201d he added.<\/p>\n<p>Without such safeguards, carbon schemes &#8211; including the country\u2019s bilateral offsetting deals &#8211; risk repeating the errors of the voluntary market, according to Carbon Market Watch policy analyst Jonathan Crook.<\/p>\n<p>Forest projects whose offsets are traded in the voluntary market have been widely criticised for <a href=\"https:\/\/www.theguardian.com\/environment\/2023\/jan\/18\/revealed-forest-carbon-offsets-biggest-provider-worthless-verra-aoe\">over-crediting<\/a> emissions reductions, as well as <a href=\"https:\/\/www.climatechangenews.com\/2023\/10\/05\/exposed-carbon-offsets-linked-to-high-forest-loss-still-on-sale\/\">struggling to monitor forest loss<\/a>. In some cases, projects have also led to human rights <a href=\"https:\/\/www.elclip.org\/juez-suspende-proyecto-de-carbono-en-colombia-hecho-de-espaldas-a-la-comunidad\/\">violations<\/a>, especially against Indigenous peoples.<\/p>\n<h3><strong>Industry brokers in the room<br \/>\n<\/strong><\/h3>\n<p>In September, a few months before Singapore and Paraguay announced their deal, the two governments held a meeting in New York, attended by big carbon brokers likely to benefit from the agreement.<\/p>\n<p>They included Singaporean commodities giant Trafigura Group, which is one of the <a href=\"https:\/\/www.latimes.com\/business\/story\/2023-08-22\/carbon-trading-co2-credits\">world\u2019s largest<\/a> carbon traders and Paraguay\u2019s biggest fossil fuel supplier.<\/p>\n<p>Pe\u00f1a also met in New York with Per Olofsson, CEO of Paracel, a forestry company seeking to sell carbon credits from eucalyptus tree plantations in Paraguay, where Olofsson had <a href=\"https:\/\/www.vouga.com.py\/mercados-de-carbono-perspectivas-y-proyectos-en-paraguay-vouga-abogados-en-el-conversatorio-de-amcham\/\">joined meetings<\/a> lobbying in favour of the new carbon markets bill.<\/p>\n<div id=\"attachment_50190\" style=\"width: 760px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-50190\" class=\"size-full wp-image-50190\" src=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13134012\/Photograph-of-Paraguayan-President-Santiago-Pena-meeting-in-New-York-on-September-20-2023.-The-photograph-shows-Per-Oloffson-CEO-of-Paracel-and-Benjamin-Chia-Singapores-.png\" alt=\"\" width=\"750\" height=\"443\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13134012\/Photograph-of-Paraguayan-President-Santiago-Pena-meeting-in-New-York-on-September-20-2023.-The-photograph-shows-Per-Oloffson-CEO-of-Paracel-and-Benjamin-Chia-Singapores-.png 750w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13134012\/Photograph-of-Paraguayan-President-Santiago-Pena-meeting-in-New-York-on-September-20-2023.-The-photograph-shows-Per-Oloffson-CEO-of-Paracel-and-Benjamin-Chia-Singapores--284x168.png 284w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13134012\/Photograph-of-Paraguayan-President-Santiago-Pena-meeting-in-New-York-on-September-20-2023.-The-photograph-shows-Per-Oloffson-CEO-of-Paracel-and-Benjamin-Chia-Singapores--571x337.png 571w\" sizes=\"(max-width: 750px) 100vw, 750px\" \/><p id=\"caption-attachment-50190\" class=\"wp-caption-text\">Photograph of Paraguayan President Santiago Pe\u00f1a at a meeting in New York on September 20, 2023. The photograph shows Per Oloffson, CEO of Paracel, and Benjamin Chia, Singapore\u2019s main carbon markets negotiator (second and second to last on the right, respectively). Chia\u2019s attendance was not announced. (Photo: Paraguay Presidency)<\/p><\/div>\n<p>Both Paracel and Trafigura have faced questions over the integrity of their carbon credits and had projects suspended by carbon credit verification agency Verra.<\/p>\n<p>Trafigura faced problems in June 2023, when Verra launched an <a href=\"https:\/\/verra.org\/verra-statement-on-todays-human-rights-watch-report\/\">investigation<\/a> into its Southern Cardamom project in Cambodia, after human rights groups raised <a href=\"https:\/\/www.hrw.org\/report\/2024\/02\/28\/carbon-offsettings-casualties\/violations-chong-indigenous-peoples-rights\">concerns<\/a> about land conflicts with Indigenous people.<\/p>\n<p>Trafigura, which had already committed the credits to corporate buyers, had to <a href=\"https:\/\/www.latimes.com\/business\/story\/2023-08-22\/carbon-trading-co2-credits\">suspend<\/a> them. The results of the investigation have not yet been revealed.<\/p>\n<p>Meanwhile, Paracel was also questioned last year by Verra, which suspended one of its projects aiming to generate carbon credits from a wood-pulp mill and eucalyptus plantations in Paraguay.<\/p>\n<p>The project took a $200-million loan from the Inter-American Development Bank, which according to Verra, shows that the project had no additionality, since it would have accessed finance anyway and continued without selling carbon credits.<\/p>\n<div id=\"attachment_50187\" style=\"width: 737px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-50187\" class=\"size-full wp-image-50187\" src=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132518\/Excerpt-from-Verras-letter-denying-registration-of-Paracels-project.png\" alt=\"\" width=\"727\" height=\"502\" srcset=\"https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132518\/Excerpt-from-Verras-letter-denying-registration-of-Paracels-project.png 727w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132518\/Excerpt-from-Verras-letter-denying-registration-of-Paracels-project-243x168.png 243w, https:\/\/cdn.climatechangenews.com\/files\/2024\/03\/13132518\/Excerpt-from-Verras-letter-denying-registration-of-Paracels-project-488x337.png 488w\" sizes=\"(max-width: 727px) 100vw, 727px\" \/><p id=\"caption-attachment-50187\" class=\"wp-caption-text\"><em>Excerpt from Verra\u2019s letter denying registration of Paracel\u2019s project<\/em><\/p><\/div>\n<p>According to Verra, Paracel had until December 19, 2023, to present improvements and thus avoid a final rejection of the project. But as of March 1 this year, neither the company nor <a href=\"https:\/\/registry.verra.org\/app\/projectDetail\/CCB\/3196\">Verra had published updates regarding its status.<\/a><\/p>\n<p>Paracel is also facing a dispute with a local community called Sargento Jos\u00e9 F\u00e9lix L\u00f3pez, in Paraguay&#8217;s northwest, <a href=\"https:\/\/www.baseis.org.py\/denuncian-que-paracel-ocupa-ilegalmente-tierras-publicas\/\">which denounced <\/a>the siting of some eucalyptus plantations on public land.<\/p>\n<p>Asked about Verra&#8217;s concerns, a Paracel spokeperson said the company was gathering documentation to submit to Verra, noting that additionality was fundamental for its biggest international buyers.<\/p>\n<p>Paraguay&#8217;s new carbon market law is a positive step towards regulating the local market, the spokesperson added.<\/p>\n<p>Asked if that same law would be useful for international agreements, Rodrigo Maluff, vice minister of investment, said the door is still open to modify the legislation and adapt it to the standards <a href=\"https:\/\/www.green.earth\/news\/singapore-unveils-its-own-carbon-credit-guidelines#:~:text=The%20eligibility%20criteria%20include%20ensuring,lead%20to%20increased%20emissions%20elsewhere.\">demanded by Singapore<\/a>.<\/p>\n<p>The legal director of the Ministry of Environment, V\u00edctor Gonz\u00e1lez, said much of the work could be done through the regulatory process under the law that will begin this year.<\/p>\n<p><strong>Transparency concerns<br \/>\n<\/strong><\/p>\n<p>Experts told Climate Home that agreements like the Singapore-Paraguay deal could be negatively affected by the failure of governments at Cop28 to reach a consensus on rules for the new bilateral carbon markets being discussed under the Paris Agreement\u2019s Article 6.2.<\/p>\n<p>One key element of discord at Cop28 was how robust the process to verify the quality of the credits should be.<\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2023\/12\/13\/carbon-credits-talks-collapse-at-cop28-over-integrity-concerns\/\" target=\"_blank\" rel=\"noopener\">Carbon credits talks collapse at Cop28 over integrity concerns<\/a><\/p><\/blockquote>\n<p>\u201cMore and more countries [like Paraguay] and companies are negotiating bilateral agreements, in the absence of comprehensive regulation,\u201d said Crook from Carbon Market Watch.<\/p>\n<p>\u201cThis risks undermining transparency and may make negotiations [at Cop29] even more difficult, given the absence of clear direction,\u201d he added.<\/p>\n<p><em>A longer version of this story was first published in Spanish by <a href=\"https:\/\/elsurti.com\/reportaje\/2024\/01\/18\/paraguay-ley-carbono-paracel\/\">El Surtidor<\/a> as part of the <a href=\"https:\/\/www.elclip.org\/carbono-opaco\/\">Opaque Carbon<\/a> project led by the Latin American Centre for Investigative Journalism (CLIP) and bringing together 14 media outlets from Latin America.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"UN rules governing bilateral carbon offsetting between governments have yet to be agreed but deals are being done, raising concerns about integrity","protected":false},"author":203,"featured_media":50181,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[607,1483],"tags":[1589,4598,3970,5053],"coauthors":[5154],"class_list":["post-50071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-carbon-markets","category-un-climate-talks","tag-carbon-market","tag-carbon-offset","tag-forests","tag-south-america","type-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lobbying and lax rules hinder Paraguay-Singapore carbon deal<\/title>\n<meta name=\"description\" content=\"Concerns 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