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The Forest Mafia: How Scammers Steal Millions Through Carbon Markets

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Forest mafiaWhen 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.)



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