carbon markets

The Forest Mafia: How Scammers Steal Millions Through Carbon Markets

When the balding Australian first stepped off the riverboat and into the isolated pocket of northeastern Peru’s Amazon jungle in 2010, he had what seemed like a noble, if quixotic, business plan.

An ambitious real estate developer, David Nilsson hoped to ink joint venture agreements with the regional government of Loreto province and the leaders of the indigenous Matses community to preserve vast thickets of the tribe’s remote rainforest. Under a global carbon-trading program, he wished to sell shares of the forest’s carbon credits to businesses that hope to mitigate, or offset, their air pollution.

Located a six-day ride from the frontier city of Iquitos, the jungle’s vegetation, soils, and looming trees store an immense amount of carbon dioxide—roughly one ton, the equivalent of one UN-backed carbon credit, per tree.

In an ideal scenario, this is how it’s supposed to work: A community in a developing country works with an NGO or developer to design a plan to protect a large swathe of forest and thus prevent the release of the harmful chemical compound into the atmosphere, in accordance with the United Nations’ program called REDD (Reducing Emissions from Deforestation and forest Degradation). Then, it can get the emissions reductions certified by a third-party auditor and sell the resulting carbon credits to corporations in developed countries interested in reducing their own carbon footprints. (Deforestation accounts for roughly 17 percent of all global greenhouse gas emissions.)

Nilsson’s Hong Kong-based company, Sustainable Carbon Resources Limited, planned to help the indigenous community set up the Peruvian carbon credit project in exchange for sharing the profits once they were sold. If Nilsson’s plan worked, in theory the forest would be spared from loggers, his company would net some profit, and the indigenous community would receive millions of dollars in funding for education and medical care from investors and corporations interested in expanding sustainability and social responsibility efforts.  

Nilsson recruited Dan Pantone, an Iquitos-based American ecologist with close contacts in the Matses community, as a guide to show him around the jungle, and, more importantly, introduce him to the right decision-makers.

“[Nilsson] told me, ‘You’re going to be a millionaire in a year,’” Pantone said of his earliest phone conversation. “He said he was going to help the indigenous people.”

Early on, Nilsson didn’t seem particularly interested in hammering out the details of a potential forest project.

Read more. [Image: Rebecca Spooner/Survival International]

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Old Waco House by David Lilly
Via Flickr:
This is an old Victorian home in Waco, Texas built about the turn of the last century but being restored now. Inside are a number of period pieces of furniture sitting in rooms with 10’ high ceilings, wonderful old creaky stairs, etc. Many such houses are in various states of repair/dispair in the city of Waco. Dr Pepper is a carbonated soft drink marketed as having a unique flavor. The drink was created in the 1880s by Charles Alderton in Waco, Texas and first served around 1885. Baylor University (Source of Baylor Medical School and of Women’s Basketball Championship fame) was founded in 1845 in Waco. The home shown above might have been a professors or administrators residence at one time.

Most Expensive Gem in the World: the Pink Star Diamond

The Pink Star Diamond is a “Fancy Vivid Pink” diamond that was mined in 1999 in South Africa. Weighing in at 59.6 carats, this gem was sold by Sotheby’s for a record $83 million: more than any other diamond - or any gem - ever sold.

Composition: Carbon | Market Value: $83,187,381, or about $1,395,761 per carat