The potential perils of forest carbon contracts for developing countries: cases from Africa

Abstract

The importance of law, and investment contracts in particular, has been noted in recent discussions around ‘land grabbing’. This paper extends a legal analysis to what has been termed ‘green grabbing’ in this special issue and argues that the contracts that shape foreign investment in carbon sequestration projects can pose substantial material risks for governments, local communities and even the environment. Investment contracts also present a formidable obstacle to the implementation of initiatives aimed at recognising the rights of forest-dwelling peoples, particularly the right to participate in decision-making. The paper draws on the experience of developing countries with the negotiation of investment contracts in traditional natural resource sectors and a small number of contracts from Sub-Saharan Africa that specifically deal with carbon sequestration to illustrate the problems that may arise in this new area of foreign investment.