McKinsey Advice on Rainforest Schemes Fundamentally Flawed

Basic errors in McKinsey reports influence national plans

Feature story - April 14, 2011
A new Greenpeace report Bad Influence has revealed how advice given to national governments by global consultancy firm McKinsey could lead to an increase in destructive logging practices in the DRC and other forested countries.

McKinsey's one-sided view of forests

McKinsey's take on forests is a purely financial one: they are a source of profit for industrials or a commercial interest for forested countries. No alternative development, more sustainable or faire is envisaged at all. Photo: Philip Reynaers

McKinsey is the market leader in advising national governments on Reducing Emissions from Deforestation and Degradation (REDD+)* programmes, yet its advice has played a key role in distorting this process to a point where donor money actually ends up being used to subsidise the expansion of the logging industry.

“Greenpeace’s report shows the destructive and perverse effects the McKinsey approach will have when applied to REDD+. Key problems with McKinsey’s REDD+ work included that it does not lead to a reduction in deforestation, provides an incentive for rainforest governments to over estimate future levels of deforestation, omits important costs, and barely acknowledges governance issues in rainforest countries”, said Sarah Shoraka, Greenpeace Forest Campaigner.

An example: Guyana’s plan, written with input from McKinsey, allows logging to increase to 20 times its current rate and the Democratic Republic of Congo (DRC) plan proposes the addition of at least 10 million hectares given as logging concessions.

McKinsey in the DRC: a catastrophic scenario favouring industrial interests

At the end of 2009 McKinsey was asked to produce an analysis on the potential of REDD in the Congo. A preliminary strategy plan, which relied extensivly on recommendations made in the McKinsey analysis, was then drawn up by the Minister of the Environment. The final outcome is completely at odds with protecting forests and their inhabitants:

  • it calls for the expansion of industrial activities in a further 10 million hectares of dense rainforest, including intact forest landscapes -- the most important forest areas for preserving biodiversity and the climate

  • it provides grants for industrial logging companies to limit their activities contributing to deforestation (providing around 750 million Euros to the logging industry for essentially maintain the situation as it is)

  • it provides the agro-industry (palm oil, etc.) with more than a billion Euros by 2030 as an incentive for moving their operations out of dense forest areas.

"McKinsey sees local communities as the principal drivers of deforestation in the the DRC, and inexplicably minimises the impact that industrial loggers have on deforestation and degradation in the rain forest" said René Ngongo, forest campaigner for Greenpeace Africa.

"To maintain integrity with regard to REDD, the DRC government and fund-providers must stop relying on McKinsey reports for as long as their calculations aren't transparent, and their methodologies remain questionable. REDD will not be credible in the DRC unless it really protects intact forest landscapes, and maintains the moratorium on new concessions in the forest"

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* REDD: Reducing Emissions from Deforestation and Degradation programmes – or REDD – are global schemes intended to provide tropical forest nations with financial incentives not to destroy or degrade their forests. The concept of REDD has in some forums been subsequently expanded to also allow for financial support for restoration, reforestation and afforestation activities (i.e. REDD+).