Carbon fraud & illicit networks: risks in REDD+

Author: Babida David Sepmat Gavara-Nanu

Gavara-Nanu, Babida David Sepmat, 2020 Carbon fraud & illicit networks: risks in REDD+, Flinders University, College of Business, Government and Law

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The complex composition of carbon fraud renders it difficult to define and, as a result, even more difficult to detect. Owing to its relative infancy, ‘carbon fraud’ is yet to be recognised worldwide as a criminal offence distinct from interrelated offences like fraud and cybercrime. However, it is acknowledged that the few reported instances of carbon fraud have mainly been committed by sophisticated organised criminal networks, which have stolen millions of dollars from ‘eco-financial’ platforms. Those platforms were formed to combat climate change through buying and trading carbon credits to facilitate the continued emissions of carbon and other greenhouse gases into the atmosphere and to mitigate those emissions. The obvious contradiction in the basis for establishing these platforms is what makes them complex to understand and poorly regulated, although this situation is slowly changing as authorities and investors demand transparency and verification in carbon trading. The complexity of understanding financial trading on these platforms, their poor or lax regulatory guidelines and laws and the relative ease of stealing enormous sums of money from them has naturally attracted organised criminal groups to exploit these carbon trading hubs.

This thesis adopts a ‘precautionary approach’ in exploring methods that might effectively combat the emerging crime. It examines the United Nations–backed scheme, Reducing Emissions from Deforestation and forest Degradation (REDD+), another eco-financial platform originally developed primarily to compensate developing countries by preserving their rainforests from logging so that developed countries can continue to operate their carbon-intensive industries. While tracing the evolution of carbon fraud from the late 1990s, an analysis of the methods employed to combat carbon fraud, especially in REDD+ schemes is also undertaken. The thesis then investigates Papua New Guinea’s (PNG’s) REDD+ scheme and determines whether the REDD+ scheme is likely to fulfil its designed purpose of alleviating the livelihood of forest-dependent communities or become entangled in carbon fraud from the exploitation of organised criminal syndicates and through the malfeasance known to plague nations in the global South that have weak governance.

At the centre of the analysis is the view that REDD+ schemes are for the ultimate benefit of the indigenous communities where the REDD+ projects are located. Examining the schemes through this lens, the thesis explores the web of indigenous cultural notions of PNG land tenure systems where the schemes are located. The thesis sets this against the backdrop of economic benefit and development to determine which groups (or group) ultimately benefit from REDD+ schemes: is it the financiers, the investors, the host nation, indigenous communities or organised criminal networks? The answer might provide a stronger platform to operate REDD+ schemes relatively free of illicit networks. In the process, the thesis contributes to the corpus of green criminology literature.

Keywords: Papua New Guinea, REDD+, carbon fraud, green criminology, organised crime, corruption

Subject: Law thesis

Thesis type: Doctor of Philosophy
Completed: 2020
School: College of Business, Government and Law
Supervisor: Professor Willem de Lint