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Exclusive: Eco2 Tree-Planting Scheme Highlights Fears About Forestry Offsets

Investigation Finds 'Carbon Cowboys' from California to the South Pacific

By Stacy Feldman

Feb 1, 2010

On the island nation of Vanuatu in the South Pacific, 20,000 acres of deforested land are supposedly being converted to a plantation with millions of super carbon-absorbing trees.

The company behind the scheme, Eco2 Forests, has been pitching its plan as a moneymaker for investors, with cash coming in almost immediately through the selling of carbon credits for the CO2 those trees would one day sequester. It's already claiming conspicuous success in sprouting its special "Kiri" tree in faraway places.

From November 2009 through January 2010, Eco2 — which launched last July and boasts offices in Australia and California — released a flurry of news aimed at investors: executive appointments, new headquarters in Sacramento, tree plantings and a flashy web site that contains several pages on how to invest directly with the company.

The biggest announcement, though, was a "multi-million dollar carbon credit deal" with a Colorado company, which appears from public records and interviews to be operated by executives from Eco2.

That connection raises serious questions about both firms — and more generally, of the transparency in the nascent forestry carbon market.

Real Deal?

On Jan. 4, 2010, Eco2 announced a deal with CarbonX Trade, which it described as a subsidiary of Lakewood, Colo.-based Green Ventures Future Fund. According to the press release from Eco2, which was carried on several news sites, including CNN/Money.com, CarbonX Trade agreed to buy 375,000 carbon credits, priced at $10 each, from the yet-to-exist Vanuatu project and an Eco2 eastern Australia project.

The money would begin flowing to Eco2 as early as April 2010, the company said. It called the deal "significant."

The "announcement serves to re-affirm the support the company is receiving in working its way through delivering its Global Forestry Plan," Eco2 said.

"We feel that many of our investors have joined us because they believe in what we are doing from an economic level and an environmental level as well."

The deal grabbed attention. In a speech in January forecasting the year ahead for climate policy, Jonathan Lash, president of the World Resources Institute (WRI), mentioned the Eco2-CarbonX Trade pact. He said the world can expect to see "the rapid emergence" of such private forestry deals "as the opportunity of reforestation becomes more real."

If true, there may be cause for concern.

CarbonX Trade and Green Ventures Future Fund appear in the business division files of the Colorado Secretary of State, a SolveClimate investigation found. Both were established in April 2009. And both are in "good standing."

The listing, however, gives the business address for the twin firms as a private home in Lakewood, Colo., owned by a man named Frank Tavella who said he did the paperwork for setting up the carbon-credit buyers but was wary to reveal anything more.

The head of CarbonX Trade, he told SolveClimate, is Australian Martin Tindall, who is also the president and self-described "ecoimagineer" of Eco2, "responsible for creating the vision of the Global Forestry Plan for Eco2 Forests."

Eco2 is CarbonX Trade's only client, Tavella said.

The companies' web sites reveal more evidence of a connection.

According to Network Solutions, which lists web site registrations, the domain name carbonxtrade.us was registered on March 21, 2009, by Tindall. The dot-com, dot-net, dot-info and dot-org constructions of the name were registered on the same day by Domains by Proxy, Inc., a company that shields the identity of the real owner.

Some months later, Tindall registered the eco2forests.com domain.

Eco2 Forests Inc (Code: ECOF) & Martin Tindall

An interesting read above about Eco2 Forests Inc & Martin Tindall - you might like to investigate Mr. Tindall in Australia about his personal BANKRUPTCY. I will list those details in the near future but I can CONFIRM that Mr. Tindall is CURRENTLY a BANKRUPT having filed his own DEBTORS PETITION and because of this fact, he CANNOT be involved with a Publicly Listed Company in Australia. By that I mean he cannot be a Director, Shareholder and/or a Public Officer of a current and operational Company.

Question that needs to be addressed.. If Mr. Tindall is a BANKRUPT in Australia, how can it be that he can be a CEO and PRESIDENT of an American Company and further, how can he be involved with fund raising for ECOF (refer to US SEC filings in July/August 2010 of same)?

Eco2 Forests Inc (Code: ECOF) & Martin Tindall - BANKRUPTCY INFO

MARTIN HENRY TINDALL
MARTIN TINDALL
DATE OF AUSTRALIAN BANKRUPTCY: 26th MARCH 2009
DATE DUE FOR DISCHARGE: 27th MARCH 2012
TYPE OF ADMINISTRATION: DEBTOR'S PETITION
ESTATE NO: QLD 1617/9/9
TRUSTEE IN BANKRUPTCY: VINCENTS CHARTERED ACCOUNTANTS, BRISBANE (07) 3854.4555

USA COMPANY INVOLVED IN RAISING FUNDS: ECO2 FORESTS INC (STOCK CODE: ECOF)
http://www.eco2forests.com/

Warning from Vanuatu: ECO2 eco-forestry scam

Greetings from Port Vila, capital of Vanuatu.

As a small, developing nation with low levels of education and access to a cash economy, Vanuatu has, from the first contact with sandalwood traders, been extremely vulnerable to the predations of these sorts of individuals. But some of us are keeping a close eye on their activities. Your readers may like to know a few of the facts we have assembled about them:

  • The land in question, in Espeigle Bay, on the island of Malakula, is not "deforested" as claimed. It is a mixture of old-growth rainforest, coastal forest and old coconut plantation. There is no mention of this in their press releases, or of what they plan to do with the valuable tropical hardwoods that they will need to harvest in order to plant Paulownia.
  • For the 20,000 acres of land (4% of Malakula's total landmass), they paid the customary landholders, through their local go-betweens, a total of approx. USD20,000 and a Toyota Hilux SUV. In Vanuatu, all land belongs to the customary landowners and can only be leased out for a maximum of 75 years (but often less). There is no freehold title in Vanuatu.
  • One of their local go-betweens is a local businessman, who came to Vanuatu following a prison term in Australia for drug dealing. He left out this important detail on his application form to become a foreign investor in Vanuatu. Convicted criminals are not permitted to become investors in Vanuatu. Their other go-between was the author of the Strata Titles Act, a law pushed for by foreign investors that removes power from ni-Vanuatu (the indigenous inhabitants) over their own land by allowing the resale of land without notification to the customary owners, unlike all other forms of land exchange in Vanuatu which require notification and a royalty on the resale of land.
  • At the time that the abovementioned press releases came out, ECO2 had not made any application to any national, provincial or local government department or agency with regards to their "ecoforestry" plan, nor had they applied to become foreign investors through the Vanuatu Investment Promotion Authority, the agency that vets all foreign investment in the country.
  • After we exposed the dubious nature of ECO2's activities in one of the national newspapers, the Vanuatu Minister of Lands and Energy, Hon. Paul Telukluk, issued a warning to the company to start respecting Vanuatu's laws (http://www.solomonstarnews.com/news/regional/1500-vanautu-issues-warning...). n.b. the reference to Jatropha refers to an earlier failed scheme by one of the aforementioned go-betweens to plant Jatropha in the same location.
  • Under Vanuatu's (very weak) environmental legislation, all large developments must undertake an independent Environmental Impact Assessment (EIA). This has not happened to date.
  • Paulownia or "kiri" trees are native to temperate Japan and NE China. The species has been grown before in tropical Vanuatu and found to be unsuitable. Vanuatu is prone to highly destructive tropical hurricanes, and there is doubt that a large-scale plantation could be established because of the common occurrence of hurricanes (on average 2-3 per annum).
  • In one of their December 2009 press releases, ECO2 highlights their payment of 55 million shares to a customary landholder. They neglect to elaborate that this equates to a value on paper of merely USD2300, and that there is no electricity in this part of Malakula, let alone internet access or banks should this individual care to trade his shares or cash them in.
  • ECO2 trades their shares on a register (Pinksheets) that has only minimal due diligence requirements and that is arguably open to manipulation by the company's directors. They incorporated in Nevada, which has one of the least transparent company registries in the USA. Neither suggests transparency or credibility.
  • On their Pinksheets company info page (http://www.pinksheets.com/pink/quote/quote.jsp?symbol=ECOF), their previous business entities are listed as Monster Motors, Inc., Rockstar Industries, Inc., Berkshire International, Inc., Custom Classics Golf, Inc. We don't see a pedigree of responsible forestry management in this list.
  • Vanuatu, through the Ministry of Land and Energy, is committed to the UN's CDM. ECO2 has not approached the Vanuatu Government to gain accreditation.

Vanuatu has, since first contact with outsiders, been beset with exploitative schemes that aim to make a quick buck at the expense of the country's people and their natural resources. This means that any company that wants to set up in Vanuatu, and wants to prove their legitimacy, they have a much higher burden of proof. As shown above ECO2 fails on counts.

Lastly, there are reputable third parties that certify ecoforestry projects and carbon credit schemes. Can ECO2 offer credible independent verification of their ecoforestry and carbon offsetting credentials by a third party?

Didn't think so.

ECO2, we are watching you.

Eco2 Forests Inc (Code: ECOF) & Martin Tindall

An interesting read. Please read my commentary in regards to the subject line above.

protect forests, protect the climate

As Kate Horner rightly points out, the problems with some forms of offsets go beyond problems with methodologies. No system, no matter how rigorous, can deal with problems involving additionally and leakage in sub-national projects. The better method is to set up a system with a forest fund that protects forests at a national level. Greenpeace has such a proposal called Forests for Climate. As REDD takes shape, we need to avoid projects like the one described in this article and push for a fund that cannot be manipulated by forest carbon credit traders.

let's not learn this lesson the hard way.

I agree with Glenn in one regard: we simply cannot afford to let tropical deforestation continue – further destruction of the world’s remaining intact forests would be a tragedy for the climate, biodiversity and the livelihoods of much of the world’s poor who rely on forest resources. However, Glenn misses the crucial point that if we lose the battle on climate change, we will lose forests. Period. If greenhouse gas emissions continue to rise from industrial sources, global temperatures will surely rise more than 2 degrees above pre-industrial levels causing significant die-back in important forested regions, like the Amazon. The problem is so severe that we need deep emissions reductions from all sources, not just the forests. Unfortunately, forest carbon offsets allow polluters in the US to avoid making real emissions reductions at home by financing forest protection elsewhere.

So, if it wasn’t bad enough that the general principle is fatally flawed, it now appears that on implementation, forest carbon offsets fall well short of even these dodgy goals. Instead of financing protection of the world’s remaining intact forests, where the vast majority of carbon is stored, these so-called carbon cowboys are seeking out the highest profit by creating tree plantations, which store a fraction of the carbon, while also causing significant social and environmental harm. As Feldman notes, from Interpol to local communities in Uganda and Ecuador, forest experts are waking up to the fact that forest carbon trading is rife with problems – and the world would be better served with simpler solutions that force industrial polluters (including industrial scale loggers) to ratchet down their pollution.

Standardized methodologies for forest carbon offsets amount to tweaking on the margins of what is at its heart a flawed concept. None of the methodologies have solved the seemingly intractable problems of avoiding leakage and ensuring additionality. We've also found that existing regulatory structures are inadequate to deal with the potentially behemoth new commodities market created by cap and trade legislation and more specifically they are ill-suited to address the potential glut of what we have taken to calling "subprime carbon," or those offset projects that fail to deliver emissions reductions (for more information, see foe.org/subprimecarbon).

We need to heed the lessons learned from projects like this before we pass sweeping US climate legislation that allows polluters to buy credits from dodgy deals. We need climate policy that compels polluters in the US to reduce emissions here and drives investment in clean energy technologies that will keep our economy competitive in the long run. The US can no longer afford to be laggards in the new clean energy economy.

That's why we're working on legislation

Though I don't quite understand why it's a scandal if a company sells carbon credits to one of its owners, it's also true that we need standardized methodologies for forest carbon so everyone's working off the same sheet and it's easier to check (and cheaper to do these forest conservation and restoration projects). There are a variety of efforts afoot to do this, but the best of all would be if we pass climate legislation that includes tough ecological and social requirements on reforestation - as the House and Senate legislation do. This article ignores a very fundamental fact: we absolutely cannot afford to exclude forests from the solution to climate change. Deforestation accounts for about 17 percent of global warming pollution and reforestation has the potential to sequester dramatically more pollution than it already does. We won't be able to meet our climate targets unless we use all tools at our disposal - especially the fast and affordable tool of forest conservation and restoration.

This spoof of climate science may be of interest:

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