Carbon offsets: Green project offends Indian farmers who lose land to windmills

A Dutch bank that bought carbon offsets to neutralize its carbon footprint was unaware that poor Indian farmers had been aggrieved by the green project.

This four-month multimedia investigation by reporters on five continents is a joint project of the Monitor and the New England Center for Investigative Reporting. It was funded, in part, by The Deer Creek Foundation.  

Like his father before him, Yashwant Malche has worked the same piece of land on this parched plateau a day's drive and decades away from Mumbai. As an adivasi, or tribesman, he and his ancestors have been relegated to desolate land like this, mostly left out of India's modernization.

But in 2007, strangers came offering $4,000 and marking off his land. They said they'd build windmills, part of a power project built and sold – in part – to create profits from carbon offsets.

"That's the livelihood of my family, so I couldn't possibly sell...." Mr. Malche says he told them. "When I refused to take the money, the people said the windmill will stand there no matter what."

It did. The Dhule wind project brought the erection of about 550 windmills on land used by 2,000 adivasi. The tussle over the land resulted in a confrontation between stone-throwing tribesmen and truncheon-wielding police, bringing tear gas and arrests. Some 12,000 trees were cut to erect the turbines.

The footprint of one windmill took less than an acre from a corner of Malche's small farm. But the loss means he no longer earns enough farming and now must spend part of the year in another state working in sugar-cane fields. He used to own three sets of clothes, he now makes do with two.

The Dhule project is an example of the dark side of a new industry that harvests profits from green energy and carbon offsets through projects in developing countries. The eco-conscious buyers of carbon offsets rarely see the consequences of the projects.

The environmental payoff has been meager in the Dhule project, which produces significantly less renewable power from the windmills than expected by investors and regulators. In part that's because of theft of windmill parts, says one company that bought into the project, Essel Mining. The overall project, developed by Suzlon Energy Ltd., has spawned legal battles, a government investigation into deals involving tribal lands, and a cloud of acrimony and accusations.

All of this was news to Rabobank, a Dutch consortium that bought 175,000 tons of carbon offsets in 2008 to help the company become carbon neutral, says Bouwe Taverne, head of sustainable development for Rabobank in the Netherlands.

"It's sad to hear. This was not what we were looking for."

In 2007, Rabobank launched an effort to negate the carbon footprint for its global operations, cutting air flights, reducing emissions, and switching to electricity created by natural gas. That achieved a savings of 40 percent, and the company asked for bids to offset its remaining emissions for 2007.

Offsets generated by Dhule windmills were assured by an independent verifier and vetted by Rabobank's financial auditors, and the bank paid about $8 a ton for them, Mr. Taverne says. "The offsets were verified. We were certain of the quality. We are a good brand worldwide. When we state we are carbon neutral, we have to prove it."

It didn't look that way in the Indian countryside, where adivasis – long promised legal paths to ownership of these lands – saw their hopes dashed by the windmill project.

"There were so many trees they took down," says Dharma Sonawane, a villager who resisted the developer's offer of money for land his family had worked for three generations. The project, he adds, "is taking land away from us and we are poor people."

Rabobank is now more wary about the unintended consequences of large offset projects in distant lands, Taverne says. To counterbalance the bank's emissions the following year, they bought other offsets in smaller projects. And the bank's goal is to use minimal offsets recommended by – and known to – Dutch nonprofit organizations. An offset gone wrong: Green windmills aggrieve Indian farmers

"We think these projects," he says, "will be even more reliable."

This article was written and reported by Doug Struck of the New England Center for Investigative Reporting, with contributions from reporters Ben Arnoldy in India, Sara Miller Llana in Panama, Ilene R. Prusher in Israel, Kathy Marks in Australia, and Katy Jordan and Tyler Maltbie in Boston.

1. INTRODUCTION: Buying carbon offsets may ease eco-guilt but not global warming

2. How the "Vatican Forest" was felled before it grew

3. An offset gone wrong: Green windmills aggrieve Indian farmers

4. Using the green cloak of "certification" to market a plantation in Panama

5. Is Dave Matthews' carbon offsets provider really carbon neutral?

6. Australia leads the pursuit of carbon offset scams