On the island nation of Vanuatu in the South Pacific, 20,000 acres of deforested land are supposedly being converted to a plantation with millions of super carbon-absorbing trees.
The company behind the scheme, Eco2 Forests, has been pitching its plan as a moneymaker for investors, with cash coming in almost immediately through the selling of carbon credits for the CO2 those trees would one day sequester. It's already claiming conspicuous success in sprouting its special "Kiri" tree in faraway places.
From November 2009 through January 2010, Eco2 — which launched last July and boasts offices in Australia and California — released a flurry of news aimed at investors: executive appointments, new headquarters in Sacramento, tree plantings and a flashy web site that contains several pages on how to invest directly with the company.
The biggest announcement, though, was a "multi-million dollar carbon credit deal" with a Colorado company, which appears from public records and interviews to be operated by executives from Eco2.
That connection raises serious questions about both firms — and more generally, of the transparency in the nascent forestry carbon market.
On Jan. 4, 2010, Eco2 announced a deal with CarbonX Trade, which it described as a subsidiary of Lakewood, Colo.-based Green Ventures Future Fund. According to the press release from Eco2, which was carried on several news sites, including CNN/Money.com, CarbonX Trade agreed to buy 375,000 carbon credits, priced at $10 each, from the yet-to-exist Vanuatu project and an Eco2 eastern Australia project.
The money would begin flowing to Eco2 as early as April 2010, the company said. It called the deal "significant."
The "announcement serves to re-affirm the support the company is receiving in working its way through delivering its Global Forestry Plan," Eco2 said.
"We feel that many of our investors have joined us because they believe in what we are doing from an economic level and an environmental level as well."
The deal grabbed attention. In a speech in January forecasting the year ahead for climate policy, Jonathan Lash, president of the World Resources Institute (WRI), mentioned the Eco2-CarbonX Trade pact. He said the world can expect to see "the rapid emergence" of such private forestry deals "as the opportunity of reforestation becomes more real."
If true, there may be cause for concern.
CarbonX Trade and Green Ventures Future Fund appear in the business division files of the Colorado Secretary of State, a SolveClimate investigation found. Both were established in April 2009. And both are in "good standing."
The listing, however, gives the business address for the twin firms as a private home in Lakewood, Colo., owned by a man named Frank Tavella who said he did the paperwork for setting up the carbon-credit buyers but was wary to reveal anything more.
The head of CarbonX Trade, he told SolveClimate, is Australian Martin Tindall, who is also the president and self-described "ecoimagineer" of Eco2, "responsible for creating the vision of the Global Forestry Plan for Eco2 Forests."
Eco2 is CarbonX Trade's only client, Tavella said.
The companies' web sites reveal more evidence of a connection.
According to Network Solutions, which lists web site registrations, the domain name carbonxtrade.us was registered on March 21, 2009, by Tindall. The dot-com, dot-net, dot-info and dot-org constructions of the name were registered on the same day by Domains by Proxy, Inc., a company that shields the identity of the real owner.
Some months later, Tindall registered the eco2forests.com domain.
Tindall declined immediate comment. After repeated attempts to speak with him, he wrote in an email that he "consulted for Green Ventures Future Fund and helped them develop their online and distribution plan as part of their setup of CarbonX Trade."
Tindall described CarbonX Trade as "the carbon credit retail and wholesale distribution agent for ECO2 Forests." In a follow-up email, he said that Tavella is the "current president" of the two carbon credit retailers but sought to keep his identity confidential until the traders made their own announcements.
Jennifer Weiss, communications director for the Climate Action Reserve, a California non-profit group that verifies and tracks carbon offset projects, said no one in her office had heard of Eco2.
When asked if a company can purchase its own offsets, Weiss responded, "I could possibly see a company developing an offset project and then using the credits generated to offset its own emissions. Although," she added, "if it took investigating to turn up this information, it doesn't sound very open."
Rolf Skar, a forest campaigner for Greenpeace, said "this is the phenomenon that people are calling the carbon cowboys."