Climate injustice: how a biocarbon fund failed Uganda's tree planters

The area around Rwoho forest in the south of Uganda is a lush reserve spanning more than 9,000 ha, an area equivalent to around 12,600 soccer pitches (see map). In 2006 a programme was launched to pay locals to farm and reforest some of it, mainly with new timber plantations of pine and mixed native trees, after years of deforestation and soil erosion.

The plan was simple. Locals would look after trees for 22 years or until they reached a certain diameter. They would get paid for it in small increments. But what initially appeared to be a boon to the local rural economy and climate change turned out to be a complicated relationship between funders and farmers – one that ultimately failed.

What sounded so simple stopped abruptly last year. The carbon credit project was meant to be an environmental poster child for the international community to find a way to battle climate change. Instead, it led to farmers cutting down trees prematurely, out of frustration with their funders. 

New and preserved forests for carbon sequestration ought to pay for the initiative. In 2006, when the project launched, it was meant to put community farmers in charge and allow them to earn a living for a sustainable period. The scheme looked good on paper.

A summary document issued by the World Bank in 2006 calculated total revenue in 2021 for the project in Bugamba and Rwoho to be around 2,323,791,070 Ugandan Shillings (£471,208 today’s currency). 

This didn't transpire. It appears high costs werean issue from the start. Costs for only the first year were budgeted at 1,056,024,960 Ugandan Shillings or £330,078 (currency conversion for 2006).

E&T examined reasons why money never materialised at the bottom of this carbon credit scheme and didn't arrive at the point where it was earned. 

It’s a story of good intentions, but also a system riddled with bureaucratic barriers that dashed the hopes of locals, and how their frustration led to the opposite of what the carbon credit schemes aimed for.

It all started with great hope. Under the Clean Development Mechanism (CMD) local community farmers were promised payments from the carbon credit scheme as well as other perks such as new infrastructure and jobs. Undertaken by Uganda’s National Forestry Authority in association with local community organisations, the scheme was meant to reforest in the form of plantations.

Some of the challenges were known from the outset, such as the presence of delicate tree species including Terminalia laxiflora, a species that grow only in this area.

In this collaborative reporting project – E&T worked together with a Ugandan environmental journalist who is based in the country - we inquired why the money didn’t reach the pockets of local farmers.

Local sources tell us that bureaucratic hurdles are to blame. The funds were channelled from the Ugandan Ministry of Environment to the Ministry of Finance, we are told. Though not illegal per se, poor handling of funds backfired.

Payment delays frustrated farmers who waited impatiently for the funds to arrive. After some time, these farmers deemed it more beneficial to cut down trees before maturity than to wait empty-handed. Timber sales are lucrative and plot maintenance is time consuming. At least in the short run, selling wood made more sense to them. However, this is counterproductive for the sustainability of the soil and purpose-defeating for combatting carbon emissions, experts say. 

Data on other similar biocarbon projects suggest that the UG-Nile Basin Reforestation (FY06) under which the Rwoho forest reserve project was organised, was provided with skimpy resources from the start — at least compared to other land and water management projects funded by the World Bank.

It’s just one of many hundreds of projects backed by the World Bank’s BioCarbon Fund but with $357,742 it’s also one of the least funded projects in the category of land and water management projects. Whether this had something to do with its failure is unknown. It was one of the 27 land and water management projects listed in the EU’s eConservation records. All of them are now closed. A dozen of them were started in the same year as the Rwoho forestry project (2006).  

For a lot of work, farmers received tiny payments. Were payout calculations transparent enough when presented to local tree farmers at the beginning of the project? People on the ground express their doubts. 

The funds were coming from the European Union through the African Development Bank, one manager at the National Environment Management Agency for the region explains. 

The carbon credit fund was meant to make sure that whoever develops the wood lots maintains them, mends them, waters them and so on, gets paid, says Jeconious Musingwire, a manager at the Western Region National Environmental Management Authority. 

“Every year, they would be computing the contribution to carbon storage that made the trees take CO2 out of the environment,” he says. 

That computation would give these people and estate managers the value they have accrued over time. It gave the farmers a small share of funds, less than they have invested and less money than the wood itself would offer if they would cut it down and sell it for cash. 

There is an element of inconsistency, he thinks. After waiting so many years, the farmers got frustrated and opted for using the trees in different ways. Some sold the wood prematurely as timber. The impatience to receive the money was the driving force behind the failed scheme, he thinks. So many people engaged in the tree planting exercise but barriers to release the funds really made some of the farmers impatient. Many just exited from the scheme because they saw no future in it.

If you look at the rotation periods of pine trees, the minimum time to convert a pine plantation is between 15 and 25 years, he says. “If you are patient and wait for this long, you expect a lot of money in annual contribution," he adds. As the hope mounted for financial returns, so did the frustrations caused by the delays. 

Carbon projects like the one in the Rwoho forest reserve often fail because of conflict in the benefit-sharing mechanism and permanence issues, Allan Bomuhangi explains, a climate adaptation consultant at the Climate Vulnerability and Adaptation project in Uganda.

Rwoho’s local community was involved in the carbon credit project in two ways: on one hand in the form of formal participation where community associations were allocated areas by the National Forest Authority (NFA). Communities were entitled to carbon and timber revenues from the area they managed. Then there were non-participants involved through employment on the plantation. In both cases, he says, the NFA assumed the management role and oversaw payments. 

We reached out to NFA’s executive director Tom Obong Okello who didn't respond in time for publication.

Who’s to blame? 

Baguma Anaclate, the chairperson of the Rwoho town council, tells us that only a tiny portion of the natural forest managed by RECPA (a community-based organisation involved in the NFA/World Bank Nile basin restoration project) remained after being destroyed by private planters.

"The (private planters) cleared the forest. And even all the species have vanished. It's no longer a forest. It is a farm. Even the natural forest disappeared", Anaclate says. He says most private planters were politicians who expected quick returns, and when this failed, they cut down the trees. And for some private planters, "instead of planting trees on the NFA land, they resorted to planting crops and clearing the natural forest they found there," Anaclate says.

If the local community managers cut down trees, it could have to do with delayed payments of carbon revenues, which hinged on verified credits by a third party, Allan Bomuhangi says.

There could have been issues with the verification of credits that either delayed or cancelled the payment; consequently, that may have led to communities cutting down their forests, Bomuhangi says. 

Another reason could be that communities in Rwoho abused limitations on when they are allowed to perform thinning, do the harvesting and replanting of trees. It would have had implications on payments of carbon revenues, he adds.

Ben Henneke, president at the Clean Air Action Corporation and co-Founder of TIST says the case of frustrated farmers cutting down trees sounds familiar —  Henneke’s organisation is active in Africa but has nothing to do with the project in the Rwoho forest reserve. 

“With 110,000 farmers [involved with TIST], there’s hardly anything that hasn’t happened,” he says. One problem is that many [African small community farmers] didn’t pay attention when they joined that they were supposed to keep the tree groves for a minimum of 30 years.

Some tree cutting is accepted, he says: “We actually expect them and want them to harvest some of the trees because they need the firewood, they need poles, they need to build the houses. We focus on their needs.”

Their hope and financial expectations are sometimes skewed: “[Small farmers] hear about the carbon programme, and the idea that they might get some pre-payments, and that is exciting to them”. The reality is, the actual profit sharing only begins to make it really worthwhile in five to ten years after the farmers have joined, a long time that tests their patience. 

Satellite images suggest that the whole Rwoho forest reserve area lost large patches of dense tree cover over the last five years. Tree cover loss reached a peak in 2016. The forest lost 426 ha (or nearly 600 soccer fields) worth in tree cover. Some were cleared by forest fires. 

Data collected by the World Resource Institute suggests clearing occurred in areas where canopy height was 15 metres or higher - an indication that forest may have been more mature and at their peak in how much carbon it could store. Clearing could be down to thinning, too, experts say. In the north it’s seems less likely as the gradual removal of forest shows up in the images. 

The bill for the Rwoho carbon credits scheme was footed by the World Bank’s BioCarbon Fund, a tree-planting and carbon dioxide emission-reduction scheme, supporting many other similar schemes around the world. The money was supposed to be channeled to other smaller organisations such as the Rwoho Environmental Conservation and Protection Association (RECPA) which manages 17 per cent of the project area within the framework of a collaborative forest management agreement. 

Corporate giants such as Unilever, Mondelez, and Bunge were all deeply involved in the inception of the Biocarbon fund, previous reports say. How much wealthy western businesses benefited from African carbon projects like Uganda’s Rwoho reforestation project is hard to say.

Rwoho was the first African forestry venture to be registered under the Clean Development Mechanism (CDM) in August 2009. 

While its failure may hurt the global race to net zero, governments can draw on central lessons. Foremost, it seems important to organise the compensation of locals appropriately and swiftly while managing expectations better.

Henneke at TIST says issues of environmental injustice sits at the centre of the problem. Poor-country compensation schemes that fail locals sometimes take the appearance of a “rain cloud where the rain evaporates before it hit the ground". It’s what most government programmes look like that are trying to help poor people: “A lot of money comes out of the cloud, but it doesn’t get to the people who need it,” he says.

Perks including community employment, energy access, community health and education opportunities, improvement in water quality, and biodiversity conservation via restoration of degraded forest areas, are all well and good. But failing to pay people what they were expecting meant that participation faltered.

Henneke says it’s hard for farmers to do something different because they’re so scared if something goes wrong, their family doesn’t eat. “It’s just hard for the rest of us to imagine what that means”, he says.