Carbon markets are in limbo. That doesn’t stop this company.

First, the little-known Emirati company set its sights on a forest the size of Maine. Then another that was as big as South Carolina. Then it focused on an area of ​​land the size of Puerto Rico.

As the oil-rich emirate of Dubai prepared to host this year’s United Nations-sponsored climate summit, the company, called Blue Carbon and founded by a prince, was collecting proposed deals on vast swathes of land in the developing world. It tried to position itself as a force for a so-called solution to global warming: carbon credits.

Carbon credits are potentially one of the most important – but also most controversial – tools to accelerate efforts to reduce global emissions of heat-trapping gases. The idea is simple: each credit is worth one ton of CO2 emissions captured or avoided.

In theory, carbon trading could boost the ambition of industrialized countries by letting them reduce emissions in other countries while they figure out how to do so at home. It could also send money to developing countries that desperately need it to grow their economies sustainably.

But counting greenhouse gas emissions is a complex undertaking.

Many conservationists worry that the carbon market could be abused by countries looking to reduce emissions without abandoning fossil fuels. Others hope the trade will channel money that developing countries need to keep forests afloat and build renewable energy plants.

Blue Carbon is making inroads into the sector despite unresolved issues about how best to structure the market for this type of credit.

Within a year, Blue Carbon announced agreements with countries in Africa, Asia and the Caribbean to develop massive conservation projects. Their goal was extensive, namely to prevent clearing of forested land and plant forests in already cleared areas, and then to sell credits based on the expected emissions reductions from those projects to countries looking to reduce their carbon footprint.

One ton of carbon stored in trees is equivalent to one carbon credit that can be bought and sold.

But what government officials portrayed as a unique opportunity for their country was seen by many conservationists as a precarious gamble to reduce carbon emissions with the potential to deprive dozens of local communities of their land rights.

Carbon markets are still largely unregulated. While they provide a way to raise money to protect forests, much of the concern about deals like Blue Carbon comes down to how little companies have to disclose publicly.

“We need all the funding we can get” to protect forests, said Zoe Quiroz-Cullen, director of Fauna & Flora, an international wildlife nonprofit. But she added: “I don’t see the level of detail that we would expect for this number of announcements on this kind of scale.”

Most carbon market activity to date has taken place between companies trying to meet their voluntary commitments to reduce greenhouse gas emissions.

But the transactions that Blue Carbon wants to mediate have much higher stakes. They benefit from a system created nearly a decade ago in the historic Paris climate agreement that allows countries to trade emissions reductions that would count toward the buyer’s own pledge to achieve carbon neutrality.

Although countries and companies are starting to make deals, the rules governing trade remain unwritten. Negotiators at the recently concluded COP28 summit in Dubai have once again failed to agree on a framework for regulating trade, largely over questions of how they would report emissions reductions from their projects.

“We want and need countries and their partners to be very clear and transparent about what they are doing,” said Alexia Kelly, chief negotiator for the United States on emissions trading and market provisions of the Paris Agreement. “But if there are no agreed upon rules, that may or may not happen.”

The terms of Blue Carbon’s proposed deals have not been publicly released. The draft contract with the government of Liberia, reviewed by the Times, shows that the company would not buy land but would instead secure the right to sell carbon credits from areas currently occupied by communities, private farms and reserves.

Zimbabwe’s President Emmerson Mnangagwa in September touted an agreement that could give control of almost all countries one-fifth of the country’s territory to Blue Carbon. Bee a recent ceremony he said the deal would close the country’s “financing gap to the tune of $200 million.”

Requests for information about the deals went unanswered by Blue Carbon and the office of its founder, Sheikh Ahmed Dalmook Al Maktoum, as well as by four of the five African countries with deals.

Reaching an agreement to regulate trade between countries has become increasingly urgent. About 100 such deals have been announced since 2021, according to data from MSCI, a company that researches carbon markets.

The United Arab Emirates announced nearly half a billion dollars in commitments to carbon credit deals at a recent climate summit in Kenya, and the country is banking on paying for emissions cuts in other countries to partially offset its own emissions reductions.

“The whole point was to use carbon trading, credits and markets to facilitate the energy transition, both by reducing carbon emissions and ensuring financial flows to poorer countries,” said Rachel Kyte, a veteran climate diplomat and president of a group trying to produce carbon dioxide. markets more transparent. “But that process must be honest and transparent, and that is not the case at the moment.”

When Loretta Alethea Pope Kai, president of the National Civil Society Council of Liberia, an umbrella group of advocacy groups, saw the draft contract between her government and Blue Carbon in August, she said she was committed to blocking it.

For years, Ms. Pope Kai had worked with community leaders to pass a law that protects communities’ land rights, as well as their right to be consulted on projects that affect them. “We said, ‘Stop the negotiations,’ because we need more consultation,” she recalled in an interview. “The deal was a bad deal.”

The draft document, which has not yet been signed by Liberian authorities, is dated July and states that Blue Carbon would receive 70 percent of the proceeds – tax-free for 10 years – from the sale of any carbon credits linked to the country. The government would get the remaining 30 percent, plus a 10 percent royalty on the value of each credit, half of which would go to local communities.

Environmentalists complained that local communities and the government received too little. a commonly used protocol from Plan Vivo, a non-profit organization based in Britain, says communities must generate at least 60 percent of revenue from the sale of carbon credits.

Wilson Tarpeh, the CEO of Liberia’s Environmental Protection Agency, said the deal was never intended to go ahead before regulations were put in place.

“We are also very new to this issue, so we are taking our time to ensure that the rules are implemented,” he said in an interview. “But carbon is an important asset and we want to make money from it.”

The governments of Zambia, Zimbabwe, Tanzania and Kenya, which signed memoranda of understanding to negotiate deals covering tens of thousands of square miles with Blue Carbon, did not respond to questions about the status of the deals. Kenyan President William Ruto told reporters at the Dubai climate summit that his country had not sold “an inch” of its land as part of a carbon market deal.

Neither carbon markets nor their credibility crisis are new.

The price of carbon credits on the voluntary market has repeatedly collapsed after academic and media research into large-scale projects found that they overestimated the amount of emissions they had to offset and had negative impacts on local communities.

Any abuse in carbon trading between countries would have wider consequences. The emissions reductions promised by countries form the basis of calculations about how well the world is doing in the fight against climate change, such as the recent United Nations Emissions Gap Report.

Ms Kelly, the former US negotiator, argued that while agreed rules would help protect against the risk of carbon market abuse, the Paris Agreement was intended to give countries the freedom to implement it as they saw fit. But, she said, it depends on the nations acting in good faith, which is most of them so far.

“We don’t want them to wait,” she said, referring to the rules that are still pending. “It’s a climate emergency and we need people to take action.”

Despite the frenetic deal-making in the coming months leading up to COP28, Blue Carbon had no discernible presence at the Dubai climate summit. However, as negotiators there sparred over the future of the carbon market, the company announced new agreements with Dominica and the Bahamas. No terms were made public.